While 100% of executives recognize the impact of culture, there is still a disconnect between priorities and practicesNew research from Eagle Hill Consulting looks at how culture Impacts financial performance, and the role of management in building a strong corporate identity. Read the full report here.
Arlington, Va., December 5, 2019 – A new survey finds that while 100 percent of executives agree that organizational culture impacts financial performance, less than half (48 percent) say they monitor culture to mitigate risk.
Moreover, many (41 percent) are failing to hold leadership accountable for creating strong cultures, and only 46 percent say that they hold employees accountable for their organization’s culture. These findings are contained in a new research report from Eagle Hill Consulting, Corporate Culture and the C-Suite Agenda, available here.
“The good news is that executives understand that their culture drives performance and the ability to recruit talent,” said Melissa Jezior, CEO of Eagle Hill Consulting. “This research validates what we hear frequently from executives — culture often is on auto-pilot and not strategically managed.”
“Executives tell us that they see culture as a vague, nebulous and confusing concept, and they struggle to build an infrastructure that drives a strong culture. But, there are ways to provide clarity around culture and hold employees at all levels accountable for living and driving culture. Organizations that are deliberate about their culture will have a competitive advantage because culture is a major factor in aligning a workforce to achieve results,”Jezior explained.
The research includes the following key findings:
- All executives polled agreed that culture directly impacts financial performance.
- Less than half (48 percent) agree that their organization monitors its culture to mitigate risk.
- 75 percent of executives in the survey said that culture is one of the top reasons employees joined the organization.
- 40 percent say that their organizational policies and procedures are not aligned to the culture.
- Just more than half (56 percent) agree that their organization clearly articulates the key attributes of its culture.
- Less than two out of three executives surveyed cited improving culture as a top strategic priority.
- Only 46 percent agree that they hold employees accountable for the organization’s culture.
Excerpts From Corporate Culture and the C-Suite Agenda
C-Suite Wants A Strong Culture, But Accountability Is Lacking
For most organizations, their culture journeys just do not seem to shift into gear. And that is a problem—especially if their best employees decide to bail out and hitch a ride elsewhere. Seventy-Five percent of executives in our survey say they agree that their corporate culture is one of the top reasons why people join their company. These leaders make the connection between being a great place to work and attracting top talent, especially as workforce demographics change.
As Alan Kohll explains in his October 2018 Forbes article, “Why Millennials Are Good for Employee Well-Being”: “Millennials have helped to advance the concept of an ‘ideal’ work environment to an expectation of an excellent workplace culture.” Leadership seems to be getting that message.
At the same time, only 46 percent of executives agree that they hold their employees accountable for company culture once they come on board. Likewise, nearly three-quarters (72 percent) of executives in our survey agreed or strongly agreed that company culture directly impacts their organization’s financial performance. In fact, not one executive disagreed with that sentiment. Yet far fewer (59 percent) of the executives agreed or strongly agreed that their company holds the leadership team (those directly on the line for financial performance) accountable for company culture.
Organizational Cultures Largely Run On auto-pilot
Our survey signals a lack of deliberate investment in key areas that would strengthen both culture’s prominence and impact within organizations. A full third of the executives we surveyed (67 percent) either disagreed or were neutral about improving corporate culture being a top priority within their organizations. Again, this finding hints at a common tendency among organizational leadership to partition corporate culture into discrete initiatives, rather than integrating it into every aspect of the organization and rooting strategic business decisions in it.
Less than half of the executives we surveyed (48 percent) agree or strongly agree that their organization monitors cultural norms for changes that could increase risk to their business. Given the universal agreement among our executives that company culture impacts financial performance to some degree, the fact that it is not monitored as a potential risk is surprising. Corporate culture’s impact on financial performance ideally is positive, but it can easily turn negative. The risk, in fact, is real—and a string of recent, high-profile scandals rooted in organizational culture problems (at Wells Fargo and Uber, for two examples), means leaders should sit up and take note of this result. A diseased company culture is like rust on the undercarriage. It might not be readily apparent to a casual observer, but it can drop the bottom out from an organization in no time at all.
Read the full report, Corporate Culture and the C-Suite Agenda, here.
The research was conducted as an online survey by Eagle Hill Consulting and Entromy between March and June 2019 and included 56 C-suite respondents from a select sample of executives across the United States. The survey polled respondents on aspects of organizational culture including culture priorities, challenges, metrics, and successful practices.
Eagle Hill Consulting LLC is a woman-owned business that provides unconventional management consulting services in the areas of Strategy & Performance, Talent, and Change. The company’s expertise in delivering innovative solutions to unique challenges spans across the private, public, and nonprofit sectors, from financial services to healthcare to media & entertainment. Eagle Hill has offices in the Washington, D.C. metropolitan area, Boston, MA and Seattle, WA. More information is available at www.eaglehillconsulting.com.