A very interesting article in the Harvard Business Review last week discussed “What Great Companies Know about Culture”, including these key points:
“As Prof. James L. Heskett wrote in his latest book The Culture Cycleeffective culture can account for 20-30 percent of the differential in corporate performance when compared with “culturally unremarkable” competitors. …
“They [top-ranked companies] recognize that culture is critical to talent retention. When asked which elements of workplace commitment most benefit daily operations, companies ranked culture at 80 percent and recruitment/retention at 70 percent. Competitiveness, customer loyalty, innovation, and productivity — while critical to daily operations — trailed behind with each under 20 percent. In a world where competition for talent is global, star performers seek companies with values that mirror their own.”
It’s not surprising to us to see 80% citing the importance of company culture along with the high percentages investing in their employees and upgrading how they do so. As Globoforce CEO Eric Mosley and VP of Strategy & Consulting Derek Irvine wrote in their book, Winning with a Culture of Recognition, company culture is nothing less than the aggregate of tens of thousands of interactions every day. Leaders of great companies reinforce their values by rewarding and celebrating the behaviors that express those values.
Globoforce clients have time and again reported dramatic success in creating and proactively managing a culture of recognition and appreciation by taking their core values and driving them deep into the daily work of every employee. How do they do that? Simply by using those core values as the reasons for recognition and praise then encouraging employees to recognize each other any time they see a colleague demonstrating one of those behaviors in their daily work. That’s the only way to make the core values – the building blocks of your culture – real and meaningful for every employee.
The result? Symantec reports turning a “culture of cultures” that resulted from multiple acquisitions into 1 culture of appreciation in a matter of months. KPMG cites recognition as creating a culture of empowerment, helping to retain star employees whilst increasing the engagement and commitment of all employees.
More and more organizations are starting to understand the power of culture to influence the bottom line. Does your organization?