Culture Has Become a Key Differentiator in How Organisations Perform
Aligning a company’s workforce with the desired culture can improve performance against revenue goals by 9 percent, according to Gartner, Inc. However, only 31 percent of HR leaders believe their organizations have the necessary culture to drive performance.
“While many leaders may view culture as a ‘soft’ topic, it has become a key differentiator for how and why organizations outperform,” said Brian Kropp, group vice president of Gartner’s HR practice. “Workplace culture can impact a company’s access to talent as job seekers increasingly consider the culture of prospective employers — and investors as well. Our research found that culture is the most discussed talent issue on earnings calls and mentions have grown 12 percent annually since 2010.”
There is no “right” culture — Gartner research shows no cultural type is a consistent predictor of organizational performance. Rather than focusing on what type of culture a company should have, business leaders should turn their attention to getting their culture to perform. To do this, employees must be aligned to the organization’s culture across three areas:
- Knowledge: Know what the culture is
- Mindset: Believe in the culture
- Behavior: Behave in a way that supports the culture
Failure to achieve workforce-cultural alignment can cause employee performance to decline by as much as 12 percent.
To realize the business benefits of a culture that performs, leaders can’t just role model the culture — they must embed the culture and their company’s priorities into systems and processes, and provide business-unit leaders with support and resources to do the same. Efforts to operationalize the culture must be meaningful to the entire organization and permeate every facet of the business, from budgets to processes to workflows.
“Leaders should role model the behaviors and decisions they want from employees, but creating a culture that drives performance requires leaders to go beyond that,” said Mr. Kropp. “The best leaders help employees understand how the organization’s culture translates into their day-to-day work.”
Read our latest edition of Executive Guidance: Culture in Action: The Role of Leaders in Making Culture Perform to find out how to build a culture strategy that drives performance in your function and across your business.