Research has shown that an organization’s culture is linked
to its performance. James Heskett and John Kotter, in their
book, Corporate Culture and Performance, make a compelling
case. They demonstrate that organizational cultures
that facilitate adaptation to a changing, disruptive world are associated
with stronger financial performance than those that don’t.
For example, over an 11-year period, the average increase in revenue
growth for 12 firms they studied with performance enhancing
cultures was a startling 622 per cent versus only 166 per cent for
20 firms without performance enhancing cultures.
Interestingly, “performance enhancing” cultures involved elements
such as distributed leadership and valuing employees, while
maintaining a strong customer-focused orientation. With these
core foundational building blocks, leaders and key contributors
were better able to shift their thinking and behaviours as needed
to meet the evolving needs of their customers, as well as adapt to
changes within their market environments.
Yet, 2018 research by Gartner has found that “only three in 10
HR leaders are confident that their organizations have the culture
they need to drive future business performance.”
So, what is the critical link between culture, performance and
growth? The fact of the matter is that while culture is important,
mindsets matter more; particularly when it comes to the ability
to continuously adapt and grow through change and disruption.
Organizations need to increase their ability to shift organizational
mindsets to position their organizations for future success.
As such, the objective ought to be for leaders to transform their
organization’s culture into a mindset that drives improved business
performance. A 2018 article published in Business Wire seems
to agree with this perspective:
LINKING CULTURE TO TANGIBLE ORGANIZATIONAL GROWTH
By Brett Richards, PhD
HRPROFESSIONALNOW.CA ❚ APRIL 2019 ❚ 45