Better Cultures Produce Better Results
The most comprehensive and compelling research on this topic was done by
two Harvard Business School professors, John Kotter and James Heskett.
They conducted four years of research, in which they looked at 11 years
of business results across more than 200 companies spanning 22 different
industries. They reported their learnings in their seminal book, Corporate
Culture and Performance. What they found was that companies with better
cultures dramatically outperformed the rest:
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11 Year Analysis |
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Worse Cultures |
Better Cultures |
|
Revenue Growth |
166% |
682% |
|
Profit Growth |
1% |
756% |
|
Workforce Growth |
36% |
282% |
|
Stock Price Growth |
74% |
901% |
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|
|
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Leading Business School Professors from The University of Minnesota, the
London Business School, University of Cambridge, and the University of Southern
California collaborated in research to identify the key drivers of successful
innovation in successful companies. They looked at 759 businesses across 17
countries and found that company culture is the single biggest factor in the
success of innovation companies.
The American Marketing Association - Journal of Marketing
Vol. 73 (January 2009), 3–23
Gallup conducted what is now regarded as a landmark 1997 study of almost 3
million employees across 300,000 work units in corporations. Their findings
about the employee population:
- 29% Engaged - employees work with passion and feel a profound
connection to their company. They drive innovation and move the
organization forward.
- 54% Not-engaged &em; employees are essentially "checked out." They're
sleepwalking through their workday, putting in time-but not energy or
passion-for their work.
- 17% Actively disengaged - employees aren't just unhappy at work; they're
busy acting out their unhappiness. Every day, these workers undermine what
their engaged coworkers accomplish.
The Gallup Organization
World famous author Marcus Buckingham reports on the correlation between
company cultural aspects and bottom line performance: the top quartile
outperforms the bottom quartile by 44% when it comes to hitting profit
objectives. And the top quartile achieves 12% better retention and turnover
results than the bottom. The study looked at 37,000 employees across 300
retail stores.
First Break All the Rules, Marcus Buckingham & Curt Coffman