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Corporate success through good culture: The two are more closely related than many executives believe
Photo: Rudzhan Nagiev / iStock / Getty Images
Companies that want to grow and prosper should above all rely on a good corporate culture.
A survey of 500 CEOs around the world, including 50 from large German companies, shows that companies whose bosses see corporate culture as the first success factor achieve twice as high growth as those who do not.
The study by Heidrick Consulting, a division of the personnel consultancy Heidrick & Struggles, surveyed CEOs of corporations with a turnover of more than 2.5 billion US dollars (a good 2.12 billion euros) from nine leading economies (USA, China, Germany, Great Britain, France, Spain, Canada, Brazil and Australia) about how they see culture and economic success connected.
Basic trust is important
»Various aspects are important in corporate culture: Is there a basic trust?
How do you deal with mistakes?
Do I know what I am contributing to?
Will my ideas be heard?
Is there a fundamental willingness to get involved, help one another and share knowledge? ”Explains study co-author Jens Vogt, partner at Heidrick Consulting.
The vast majority of the German CEOs surveyed stated that they had treated corporate culture as a key priority over the past three years. That is hardly surprising - what should you answer to such a question? »If you ask companies whether the focus is on culture, you usually get a politically correct and socially desirable answer - nobody will say that corporate culture does not play a role. But it looks different if you ask which factors are responsible for the company's success, «says Vogt. »I found it astonishing how far apart that was - most bosses think that strategy, leadership, processes and rules are crucial. Our results show that this is not the case and that the culture makes a decisive contribution to the company's success.It's amazing how many companies actually know this but make far too little of it. "
The culture, the more profit
Because the same CEOs answered the question of what the most important drivers of financial success were, mostly with "strategy" (51 percent worldwide, 48 percent in Germany), "leadership" (39 percent, in Germany 38 percent) and "process and rules" «(38 percent, in Germany 36 percent).
The corporate culture was not in the top 3 list for most of them.
The study now filtered out those companies whose leaders found: Economic success is related to investments in corporate culture.
That was 14 percent in Germany - this is the third highest rate worldwide after the USA (18 percent) and Canada (16 percent).
Measured over three years, those of the 500 companies worldwide that were run by such culturally conscious bosses achieved growth of 9.1 percent - the other companies only achieved 4.4 percent. "The more intensively CEOs consistently incorporate cultural aspects into the organization, the better their financial performance can develop," says Vogt.
He explains: »Corporate culture arises anyway - but you can actively shape it or accept that it shapes people, even negatively. Anyone who sees culture only as a project in the HR department has almost failed. That has to be hung at the top. There is the "shadow of leadership": Those who are in the limelight as top managers cast a huge shadow of effect. How top management behaves in the hallway, in meetings, in one-on-one discussions is of immense importance for the corporate culture. "
He sees several levers for how a corporate culture can be firmly anchored: »Coach managers, show which messages are actually being sent consciously or unconsciously to employees, adapt all systems from recruiting to bonus allocation.
Employees have to have the emotional experience: This is meant seriously. "
However, the company leaders see a connection between corporate culture and financial success more for the company than for the employees.
Almost a third of bosses worldwide, as in Germany, stated that the primary goal of focusing on corporate culture was to improve financial performance;
But only 20 percent (24 percent worldwide) consider it important to also financially reward culturally desirable behavior of employees.