Company Culture Consultant Research Findings
41% higher revenue growth, 14% higher revenue per employee and 10% lower staff churn
- Survey respondents that cited corporate culture as a growth strategy achieved an average of 41% higher revenue growth than those who did not. Similarly, respondents that advised it was more important than their business strategy achieved an average of 44% higher revenue growth than those who did not. The highest growth companies demonstrated a direct relationship between company culture and company growth.
- The survey data found that companies with high performance growth cultures realized 14% higher revenue per employee.
- The survey data found that companies with high performance growth cultures realized a 10% lower employee churn.
Corporate Culture Consultant Research Findings
There are a lot of things the company can do to drive revenue growth. But one that will affect all others is building an intentional corporate culture. It's a precursor and top contributing factor to anything and everything that requires employee effort.
But what's the measurable impact?
Consultant research performed for the Business Growth Report sought to find out.
The survey posed questions to measure how company culture correlates to company growth. Three of the results are shared below.
A Growth Strategy for the Highest Growth Companies
We posed two questions to understand the strategic importance of the company ethos. They are shown below and delineated by performance archetype.
Respondents that cited corporate culture as an integrated component of their growth strategy achieved an average of 41 percent higher revenue growth than those who did not.
Respondents that advised it was more important than business strategy achieved an average of 44 percent higher revenue growth than those who did not.
The highest revenue growth companies demonstrate that their corporate ethos is a company differentiator and business growth accelerator.
Executives are sometimes unclear how company culture and business strategy are separate but symbiotic. The business strategy plots the roadmap to move the company from vision to action. The company culture delivers the informal ethos and norms to move the organization from the status quo to something greater.
While strategy is periodically measured, the company ethos is pervasive and perpetual. It is routinely demonstrated in the shared values, unspoken behaviors and social norms that recognize what is encouraged, discouraged, rewarded and penalized.
The business strategy and corporate ethos are separate but synergistic. The highest growth companies that advised culture is more powerful than strategy reflect the infamous words of Peter Drucker, "Culture eats strategy for breakfast."
But the two are not isolated. The corporate ethos leads productivity and profits, making it an onramp to business outcomes and financial performance. High performance cultures and high business performance are inextricably linked.
A Growth Culture Increases Revenue Per Employee
We asked participants to calculate their Revenue Per Employee (RPE) for the prior fiscal year. We grouped and analyzed the data by performance archetype. We then compared the data by respondents that advised culture was an integral component of their growth strategy.
As shown above RPE was 7 percent higher for the Best-in-Class cohort compared to the average of Medians and Laggards.
RPE was 14 percent higher for respondents that advised culture was an active and integral component of their growth strategy.
The company ethos directly influences the volume of employee energy, effort, productivity, teamwork and customer engagement.
It's developed over time, either by design or happenstance, and guides employee behaviors and actions that determine staff productivity and other performance measures.
There is a wide body of research that shows a company ethos builds teams that excel in communication and collaboration. They consistently outperform higher skilled and more experienced teams that don't possess comparable norms and behaviors. Ordinary people can accomplish extraordinary things when inspired by a purpose bigger than themselves and their jobs.
A Growth Culture Decreases Employee Turnover
We wanted to understand how the corporate ethos correlated with employee turnover. So, we asked survey participants, "What was the company's employee churn for the prior fiscal year?"
The data surfaced a significant difference when we delineated employee churn among respondents where corporate culture was an integral component of their growth strategy and where it wasn't.
Respondents with growth cultures realized 10 percent lower employee churn.
From our culture consultant experience we know that a company ethos is democratized and empowering. Every person can make it what they want. Unlike business strategy which comes from the top, an ethos can be defined at the coffee machine, in the company snack room or wherever staff congregate and view the behaviors of others. Everybody contributes.
You can physically see a shift toward a growth culture. The workplace changes from an ill-defined company purpose which inherently promotes behaviors such as power, politics or fear, to a consciously defined working environment that creates a safe, inspirational and empowered workplace. Staff are motivated to apply discretionary energy to customers and company objectives, and anybody who contributes can succeed and thrive.