Is your culture supporting your success?
A healthy organizational culture supports your organization’s long-term success. Culture is the set of norms and values that are widely and strongly shared throughout the organization. Culture and values contribute to everyone in the organization being held accountable and productive. Everyone is productive. Customer service is directly linked to these values as well. The climate for producing results and serving customers is better in a healthy culture. Moreover, numerous research studies show that culture and values truly matter for an organization’s success. In one study, The University of Chicago Booth School of Business examined the relationship of culture and values to performance in “The Value of Corporate Culture “by Luigi Zingales et. al. (2013).
This research showed that culture affects outcomes. A healthy culture based on core values, especially integrity, results in better overall organizational performance. The Booth researchers looked at how employees perceive their company’s values using data in the Great Place to Work® Institute database of over 1000 companies. They examined the question of whether employees thought “management’s actions match their words” and whether “management is honest and ethical in its business practices.” In a healthy culture, “keeping your word” is a key value. They found clear benefits when employees worked in a healthy culture that valued integrity, compared to companies where employees did not sense a core value of integrity. In organizations with a healthy culture, productivity and profitability were higher, industrial relations were better, prospective job applicants found the company more attractive and the percentage of workers that were unionized was lower.
Organizational values are not just something to hang on the wall or post on a website. They must be lived; they must be in the DNA. The vast majority of organizations publicly describe their culture and values. The Booth research noted that although 85% of S&P 500 companies described corporate culture or values on their websites, what they stated did not matter. There was no correlation between publicly stated values and the firm’s profitability. What really mattered was that employees perceived a healthy culture.
A healthy culture commits everyone to holding others accountable and being accountable, to adding value and taking the longer view. This culture guides hiring decisions, attracting those who share the organization’s values. It makes workers more satisfied with their jobs and it improves retention. The recruiting website Glassdoor.com conducted a survey of more than 600,000 employees at American companies. They found that employees really care that the company is “doing the right thing” — that it has integrity. They also care about having a family-like and team-oriented work environment where colleagues “have your back.” Employees are empowered to make sure customer satisfaction occurs and is not traded for immediate profit.
Does your organization’s culture affect its success? Yes it does. The Booth research described how higher rankings in employee satisfaction in surveys such as GPTW and Glassdoor.com not only resulted in higher productivity and profitability, but also resulted in measurable long-term stock price appreciation compared to companies with lower rankings. How healthy is your organization’s culture? It’s important to know and measure as it is critical to your organization’s success.
