Employers that link strategy, culture see higher financial growth, survey says

Dive Brief:

Culture has emerged as a priority for many employers in the past year, but those with leaders who link culture to strategy generated more than double the financial performance of their peers over a three-year period, according to a recent survey by executive search firm Heidrick & Struggles.
The firm said 82% of the 500 global CEOs it surveyed said they focused on culture as a "key priority" over the past three years. One group of leaders at high-growth firms — termed "culture accelerators" by Heidrick & Struggles — were more likely to connect financial aspects of culture with people. They also were more likely than others to put diversity, equity and inclusion efforts "front and center," the firm said.
Within the "culture accelerators" group, the survey also identified a subgroup of "culture connectors," a group of 30 CEOs who were "mostly or entirely" engaged in applying company culture in their day-to-day work. Connectors engaged their workforces by including employees at all levels, and they were more likely than other CEOs to say that holding employees accountable for living out organizational culture was important for ensuring a thriving culture.

Dive Insight:

Cultural enhancement and improvement has long been a task for HR teams, but the turbulence of the past year may have put culture at the forefront for organizations.

For example, a recent Eagle Hill Consulting survey found that 64% of U.S. workers said their employee experience impacted their ability to serve customers, with dissatisfied employees more than 2.5 times likely to say they did not provide excellent customer service.

Likewise, a report published earlier this month by the Josh Bersin Company found organizations with positive employee experiences cultivated trust between employees and the organization, while also focusing their efforts on other cultural elements such as embedding mission and purpose as part of work activities.

Amid the pandemic, some employers also have acted to increase transparency. An HR executive at retailer True Religion recently told HR Dive about the brand’s decision to explain to employees the details of its recovery from bankruptcy, as well as its decision to give employees time off to celebrate Juneteenth.

The rise of flexibility has created its own set of cultural concerns, with executives anxious about the potential impact that a distributed team may have on existing company norms.

However, Heidrick & Struggles said in its analysis of survey data that off-site work did not necessarily mean CEOs were concerned about its impact on culture. The firm found 77% of CEOs of mostly in-person workforces said their workforces were "mostly or entirely engaged" in applying cultural values during their day-to-day work, compared to 73% of CEOs operating a hybrid working model.