A high-performing culture doesn’t just happen. It can’t be forced into being through willpower. But it can become an inevitability if you create the right environment to foster it. We have found that to move to a positive, performance-enhancing culture, leaders simply need to model the values and behaviors they want to see in employees and create systems to reinforce those behaviors. Yes, it is simple conceptually. You can change culture by design if you remember that you can influence how your employees think.
Your corporate culture can actually elicit cooperation and commitment from employees, almost without their awareness, if your values are clear and your systems are properly designed to reinforce them.
And, perhaps surprisingly, a strong corporate culture can have a huge and direct impact on performance.
In the course of my work, I have become convinced that positive, people-centered corporate values lead to higher performance. Perhaps you have noticed that in the thirty-five years of its values-rich existence, Southwest Airlines is the only airline that has been profitable during every one of those years. Research similarly supports these findings. For example, Harvard professor Rosabeth Moss Kanter studied large market leaders worldwide that she calls “vanguard companies.” She has found that these companies have been able to nimbly deal with challenges and transform themselves when necessary because they are “fundamentally driven by a core set of values.”
A 2008 American Management Association study found that a “positive corporate culture” is associated with higher performance. And as far back as 1999, Ronald Burt suggested that a good culture was a “competitive asset associated with economic performance.” Burt, a professor of Sociology and Strategy at the University of Chicago Booth School of Business, found that almost 25 percent of the return in his sample companies was accounted for by the relative strength of their corporate culture. More recently, a study of thirty large corporations over the past five years by consulting firm Senn Delany in Los Angeles showed that …
Culture change ”led from the top and encompassing every part of the organization can deliver huge cost savings, improve performance, and boost profitability.”
Too many leaders, though, feel that corporate culture is a low priority, especially when compared to running the business day-to-day. My colleagues in culture-rich companies would respectfully disagree. “The best companies-those with clearly articulated values and a sense of direction-have a constant sense of urgency but they’re not frantic and under enormous stress,” noted Joel Peterson, chairman of the board of JetBlue and former CEO, Trammell Crow. Is your company like an emergency room, he asks, a survival culture that’s just trying to keep the company alive or maximize sales or new product development? That works great for a while, but your best people will burn out eventually. Remember, the best employees-your A Players-have options, no matter what the economy is like. In the war for talent, as in the war for profit, culture does make a difference.