In his book, The Culture Cycle, James L. Heskett wrote that effective culture can account for 20-30% of the differential in performance when compared to “culturally unremarkable” competitors.
Culture has a significant impact on the bottom line.
Burson-Marsteller and the Great Place to Work Institute asked senior executives from 20 of the top 25 “best multinational companies” for 2011 about the value of a positive work environment. Deidre Campbell highlighted the findings in this article on the HBR Blog Network:
- They invest more in their employees: 30% are investing more in work-life programs such as flex-time and health benefit while the other 70% are holding steady. None is cutting back.
- They provide stability: 75% of respondents valued most those programs that communicate brand mission and provide career development opportunities, compared to 15% who valued traditional benefits like health insurance and family leave and 5% who valued onsite benefits such as cafeterias and childcare.
- They value culture: “When asked which elements of workplace commitment most benefit daily operations, companies ranked culture at 80% and recruitment/retention at 70%,” writes Campbell. Competitiveness, customer loyalty, innovation, and productivity each garnered less than 20%.
- They share their story: 70% of respondents said customers are the most important external audience for understanding the company’s commitment to being a great workplace. Investors came in second at 35%. The “great workplace” story is part of these companies’ brands, how they do business, and that’s a story they want to share.
As Campbell concludes, “Being a great workplace is the result of a long-term investment in their employees. As the top-ranked companies demonstrate, this kind of investment will increase productivity, improve recruitment and retention, and save costs—all positively impacting the bottom line.”
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