A new study from human capital research firm i4cp reinforces the critical connection between organizational culture and business performance and demonstrates how companies that embody specific cultural elements are better positioned to outperform competitors in increasingly unpredictable conditions.
Titled The Future-Ready Culture, i4cp’s latest study focuses on the practices of high-performance organizations (as measured by current financial metrics such as revenue growth, market share, and profitability) and documents the traits which healthy cultures enjoy versus organizations with unhealthy cultures. Based on a global survey of organizations across 32 countries, this work builds on the best-selling book Culture Renovation®, by i4cp CEO Kevin Oakes – which Brene Brown calls “the best playbook I’ve seen when it comes to creating organizational cultures.”
“As organizations revise return-to-office policies to improve productivity, engagement, innovation, collaboration, or the countless other reasons I’ve seen used as a justification to end remote working, it’s obvious that companies should first focus on one surefire remedy: improve the health of the organizational culture,” said Oakes. “Our new study shows that high-performance organizations are five times more likely to report having very healthy cultures compared to those from low-performance organizations, which is a datapoint every organization needs to embrace. More importantly, in unpredictable times it’s the change-ready workforces that will win. The explosion of GenAI is a good example; it’s clear that companies which embrace change and quickly take advantage of industry shifts will usually outperform their competitors as a result.”
In addition to superior business performance, healthy cultures also realize numerous benefits over their toxic culture counterparts, including:
- Increases in employee productivity (5x)
- Increases in employee engagement scores (4x)
- Improved employee experience (5x)
- Improved ability to attract and retain top talent (4.5x)
- Improved employee wellbeing (4x)
- Improved innovation (3.5x)
- Improved diversity of the employee population (2x)
While many companies recognize the importance of culture, the pandemic changed some of the dynamics. The explosion of hybrid and distributed teams has created work environments that are much less dependent on physical location or formal structure. Culture has increasingly become difficult to control, and organizations with weaker cultures—and disappointing financial results—have suffered. In fact, 52% of survey respondents from low-performance organizations said their cultures have become somewhat-to-much worse over the last two years.
In order to provide remedies to improve culture health, it’s important to first accurately diagnose the issues. The Future-Ready Culture explores this through case studies and data, and documents methods for companies to measure the health of their culture. The study introduces ways to gather culture metrics, as well as ways to report culture health through indexes and dashboards.
This is important because, increasingly, boards of directors are asking about company culture and demanding data on culture health in recognition of the short- and long-term implications for business performance. As the report details, very healthy cultures were 2.6x more likely than toxic cultures to have defined sets of culture metrics they share regularly with their boards.
To Learn More
As the leading research firm dedicated to discovery and advancement of next practices in human capital, i4cp research is available to its global community of HR and business leaders. In addition to access to the full study, members may join an exclusive webinar with the research authors to be held on October 29 at 10am-PT/1pm-ET.
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