Company Health Goes Beyond EBITA

July 29, 2022
Back to Blog
Featured image for “Company Health Goes Beyond EBITA”

Company Health Goes Beyond EBITA

EBITA, (earnings before interest, taxes, and amortization) is the primary measurement of business health. If a company isn’t profitable, management cannot reinvest in future growth, innovation, reward shareholders, nor retain quality employees. One secret to EBITA growth lies in Culture Management.

EBITA isn’t the only measurement of company health. Company health is also measured by the Cultural Assessment Index. That is, we measure employee, management, customer, and supplier perception. The perception of these group is the operating reality of the organization.

Consider this. EBITA is a result of goal achievement. Cultural health is a contributing source of goal achievement.

Positive cultural health is a combined result of quality leadership, culture management, and strategy. Cultural health reflects the financial capacity of the organization. While EBITA values change by quarter, cultural health is long term source of enterprise capacity.

Typical symptoms of a toxic culture generally include failure to achieve strategies and objectives, excessive employee attrition, customer attrition, inconsistent product, and service quality.

Yes, some companies deliver acceptable EBITA values to shareholders despite their warts. They still produce satisfactory EBITA amid a toxic culture. They churn employees, customers, and management constantly. They make money in spite of themselves. The question is always, how much EBITA value did these companies lose over poor business practices?

Positive cultural perception contributes to superior customer relationships, innovation success, and gross margins. Improving your EBITA begins with improving your Cultural Index.

360 Cultural Assessment Index

We have found almost universally employees, management, customers, and suppliers establish company perception based on the effectiveness of leadership, culture, strategy, and communication.

  • Without leadership the company lacks boundaries and a true course.
  • Without culture, teams fail to consistently achieve objectives.
  • Without strategy, there is no plan and the company wanders.
  • Without communication, people are not heard.

The Cultural Assessment Index measures ten (10) areas of perception. It establishes a direct line of communication from employees, management, customers, and suppliers to senior management. It identifies quantitatively why EBITA is challenged, and how to improve EBITA results.

 360 Cultural Assessments- Identifying Trigger Points

Every company is different. Each have varying levels of leadership, cultural governance, and strategy. We identify the trigger points that are most impactful and actionable to our clients. While some enterprises may struggle with sales, others are struggling in service, logistics, or supply chain.

360 Cultural Assessments remove subjective interpretation by management. The facts are the facts. Sometimes management has an illusionary view of environment. And sometimes employees when asked about conditions by management will not truthfully communicate their perception

Final Thoughts

The Tacticware 360° Cultural Assessment identifies the cultural health of the business. The assessment is conducted on-line, and benchmarks employee perception. It assesses ten areas of greatest cultural concern.

Some challenges may be solved internally – with focus groups or by management actions. The other approach recommends bringing in an unbiased, outside source for leadership development, culture management, or strategy management. Both have their merits.

What We’ve Learned

Cultural health is not merely based on wages. Effective leadership, culture management, strategy, and communication are the greatest contributors to growing EBITA. Without quality leadership, culture stagnates, customer value erodes, and attrition invades. The greater the Cultural Assessment Index ranking, the easier EBITA achievement becomes.

Support

We work closely with our clients to not only to assess perception, but to develop management skills. Our education courses and consulting guidance help clients gain competitive advantage.

Read a Helpful Business Book- “Anonymous Cultures, The Silent Majority”

Learn more about culture management, and leadership by reading “Anonymous Cultures, The Silent Majority,” by Paul R. Fournier. It’s available from Amazon in Kindle, paperback, hardback, and Audible. https://www.amazon.com/Cultures-Silent-Majority-Strategies-Management/dp/B08XZDTCQM

Article Author

Paul R. Fournier is President of Tacticware Resource Group. Tacticware is a management consultancy firm offering guidance in growing business enterprises. Our focus is on leadership, cultural management systems, and strategic planning.

Our expert resources include management development courses, executive coaching, and 360 Cultural Assessments. We provide guidance to clients globally. Learn more about transforming your business by contacting us.

Equal Opportunity

Quality people do not have a color, gender, or age. We are committed to diversity, inclusion, and equal opportunity. We do not discriminate against racial, ethnic, and/or religious groups, older workers, women, veterans, and people with disabilities. As a matter of policy, we remain apolitical, religion neutral, and respectful of local customs.

Contact Tacticware Resource Group, LLC

Share: