A question this week comes from Scot Whiskeyman of Harrisburg, Pennsylvania. Scot asked Work Wisdom whether or not a company's culture impacts their financial bottom line.
Thanks for asking!
Harvard Business School Professor James Heskett and renowned culture guru John Kotter completed an extensive research of the corporate cultures of 200 companies and how each company’s culture affected its long-term economic performance. They published a book, Corporate Culture and Performance, arguing that strong corporate cultures are associated with strong financial results. Strong cultures highly value employees, customers, and owners and encourage leadership from everyone in the organization.
To answer your question, Scot, their research highlights the difference in financial results over an eleven year period between twelve companies that did and twenty companies that did not have this sort of culture.
Below are the average Increases for Twelve Firms with Performance-Enhancing Cultures and the Average Increase for Twenty Firms without Performance-Enhancing Cultures
It's not common for business leaders to discuss that the difference between a nine-hundred percent and a seventy-five percent appreciation in stock price is attributable to the strength of a company’s corporate culture. The ROI on culture shaping is significant and notable.
Corporate culture can contribute meaningfully to financial results, and many people do not give this fact enough attention.
Thank you for asking, Scot! Write again soon!
Your friends at Work Wisdom