Healthy Culture Delivers Better Business Performance

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Business performance and culture have always been linked, although its tended to be anecdotal evidence rather than hard statistics. I myself as part of our High Growth Programme spend some time on the importance of understanding your culture and analysing if it is suitable and desirable for your business going forward. I wrote about these issues on using culture as a support to high growth and culture as a weapon for competitive advantage. Whilst there is little doubt the having the right culture is an important factor in improving your business performance it remains an area that most smaller business owners tend to avoid. It is fair to say that much of this is because business advice and support tends to look at the process driven solutions for business rather than addressing the more difficult area of people, their values and motivations.


It has always been my contention that getting your organisational culture right will improve your competitive performance and support a company’s high growth aspirations because they empower people to be courageous and offer sultions and challenge norms without fear of reprisals or blame.




Up until now there has not been any hard numbers to support this view.

However last June an article was published in McKinseys Quarterly which had actually put numbers to the importance of culture in business performance. As can be seen in the diagram above business performance addressing change plus a healthy culture outperformed poor cultures by as much as 2.2x. This is I expect the first of many such studies as the recognition thart culture plays an important part in supporting a companys success becomes a topic at the centre of a CEO’s radar.

3 COMMENTS

  1. Laurence, this is very interesting!

    Can you share a link to the source document for that chart?

    I’m curious how McKinsey defined a “top culture.”

    Bob

  2. Hi Bob,

    Sure although it is an indirect route. Following a discussion on linked in I was given this link below which is an article/ebook from Senn Delaney and they referred to the McKinsey article by Kellner & Price. I have tried to search Mckinsey on this but as I only have a free membership I could not get it. I have no doubt about the Senn Delaney article so I was happy to use it.

    http://www.linkedin.com/news?viewArticle=&articleID=31&gid=4385887&type=member&item=107831715&articleURL=http%3A%2F%2Fknowledge%2Esenndelaney%2Ecom%2Fdocs%2F%2Farticles%2Fpdf%2FHRroundtable2012%2Epdf&urlhash=ebmy&trk=group_most_recent_rich-0-b-shrttl

    Organizational health: The ultimate competitive advantage Kellner & Price June 2011 McKinsey Quarterly

    Hope this helps

    Rgds

    Laurence

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