Recently we had the opportunity to discuss the importance of company culture as part of a valued client’s new employee orientation. Our client has a large contract with a multi-national corporation and wanted to be sure their new employees not only understood the culture of their own company but also the culture of their biggest client in order to provide the best customer service.
As part of our presentation preparation we did our research on company culture and learned how important culture is to the bottom line. But first, what do we mean by company culture? Peter Ashworth has said, “A company’s culture is its only truly unique identifier. It is like a fingerprint, it may be similar to others, but it is uniquely distinct to your business. Everything else can be replicated, the only truly unique identifiers are the values and norms of the organization, its personality or culture.”
Now that we’ve defined culture, let’s discuss why it is so important. Researchers from Duke and Columbia business schools surveyed over 1400 CEOs and CFOs and found:
• “A healthy corporate culture is essential for a company to thrive.”
• More than 90% said that culture was important at their firms.
• 92% said they believed improving their firm’s corporate culture would improve the value of the company.
• More than 50% said corporate culture influences productivity, creativity, profitability, firm value and growth rates.
A strong company culture is a business imperative. Peter Drucker, who has been described as the “founder of modern management” said,” Organizational culture eats strategy for breakfast, lunch and dinner!”
Why? Because the impact of culture on performance can be measured and is significant. Many global studies have proven the culture and performance link. While doing research for their book, Corporate Culture and Performance, Harvard business professors John Kotter and John Heskett found that firms with a strong culture built on a foundation of shared values outperformed other firms by a large margin on several key indicators, including revenue growth, employment growth, stock price growth, and jobs growth.
The researchers from Duke and Columbia also concluded: “Corporate culture is an essential element of success.”
It is important to note: no culture, however strong, can overcome poor choices when it comes to corporate strategy. The impact of culture on a company’s success is only as good as its strategy is sound.
How is your company culture? How sound is your strategy? If you need some help with the answers to these questions, contact Constructing Opportunity to learn how we can help.