Tony Hsieh, the founder of Zappos.com, famously said, "Even if you're a superstar at your job, if you're bad for culture, we'll fire you."
Zappos is a pioneer in online sales and is also well known for its formidable culture. Hsieh says, "Our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own."
Your organization has a culture whether you like it or not. The culture is a mood, feeling, and attitude. In our practice we describe culture as the sum total of conversations that happen in your organization and amongst its stakeholders. It is not genetically encoded; your culture can be shaped, evolved, and enhanced.
The question is: Can your corporate culture make you money?
Harvard Business School's famous study (Kotter and Heskett, 2011) showed that companies that managed their culture well had five times the revenue growth and 750 times the profit growth of companies who did not.
In one Canadian study, the 10 Most Admired Corporate Cultures of 2011 outpaced the S&P / TSX indexes by 1300 per cent in asset growth and 600 per cent in revenue growth. This was further reinforced by a recent Northwestern University study (The Value of Corporate Culture, September 2013). Taking data from the Great Place to Work Institute, there was a positive correlation between integrity in the workplace and financial performance as well as attractiveness of job offerings.
What about Zappos? In 2009, Zappos was acquired by Amazon.com for about $1 billion. In a commodity business where you are selling the same product as your competition, culture is a key point of differentiation. Ask Tony Hsieh. Culture matters -- if you like financial performance, that is.
Powerful cultures impact all parts of a company's operations. Elements such as rewards and incentives; performance reviews; training programs; brand differentiation; communication; customer service; supplier relations; customer loyalty; and employee attraction, selection and retention are some examples of the importance of corporate culture.
If compensation is known as the key factor in employee recruitment, it is a company's corporate culture that is the key factor in employee retention.
Some leaders do not like to spend money on intangibles like employee programs, team building sessions, parties, and training. They are seen as nice to have, yet somehow always end up on the budget chopping block. More often than not, the rationale is "our culture is fine." If you live with the impression that culture is cost centre, you subscribe to this attitude.
Your corporate culture should be seen as a profit centre. It makes you money. It keeps your customers happy. And it helps you deliver financial performance in very competitive industries.Suggest a correction