How Important is Culture to your company’s bottom line?

Big, very big! Analysis shows when cultures align with the demands of their business lines they consistently outperform organizations that are not aligned. Here is what those companies surveyed reported:

• 571% gains in operating earnings
• 471% higher returns in investments
• Stock prices increased 383%
as reported in “The New Corporate Culture: Deals and Kennedy, 1999.”

According to an article published in the September 03 issue of Professional Services Journal, “Organizations with adaptive cultures increased net income 756 percent over an 11-year period compared to a one-percent increase for everybody else.”

The impact of culture on the bottom line is clear. Harvard Business School professors John Kotter and James Heskett studied over 200 companies for several years and found that culture has a significant impact on a firm’s long-term economic performance. The role of culture in determining financial performance is becoming even greater in today’s fast-changing, more competitive business environment.

Organizational culture is a powerful force. It significantly impacts profitability, sets the climate for innovative ideas, and determines an organization’s capacity to change. The power of culture is perhaps best seen when organizations are forced to adapt to change, resulting in either success or failure of initiatives. Executives know they must get their organizations to seek and embrace change, but often feel challenged with cultures that resist change, causing dependence on the leader or defensive attitudes that inhibit collaboration, threaten innovative initiatives and reduce organizational effectiveness. The greater the degree of change required, the more important it is to examine the existing culture to determine whether it will serve as a catalyst in moving forward or whether it will act as a deterrent in support of the status quo.
Organizations that have not yet successfully made the connection between strategy and culture have yet to realize the benefit, which culture plays in an organization’s growth and performance. Leadership is centric to establishing the vision and values that foster the culture within an organization. Often, in organizations where performance is declining and employee morale is low, the senior management’s view of its current organization’s culture is based more on hope than a view grounded in objective fact. It is difficult at best to be objective when you are your own sounding board.

Until recently, accurately assessing organizational culture and readiness to change has been virtually impossible. Peer Synergy Group has several tools that enable organizations to see and understand their present state of culture without biases and we provide the experience and expertise to assist in developing effective and adaptive cultures. Cultural alignment initiatives can be very concrete, with measurable goals and clear return on investment. Additionally, the ability to leverage the creative capital in an organization through continuous innovation can yield tremendous economic benefits. Aligned and dynamic organizational cultures drive effective idea exploration and the willingness to seek change. Peer Synergy Group believes an organization’s future success is dependent upon the ability to continuously innovate.
Corporate culture is often ill defined and misunderstood.

“Culture is the cornerstone of today’s corporations. More than any other force it shapes the attitude, the hopes, the creativity, and the values of the employee.

Culture bonds and motivates individual behavior, both internal and external relations; it impacts a company’s values, how it processes information, and how it functions at all levels from the subconscious to the visible. Regardless of how you view culture in your organization, it should emphasize what’s really important and directly support your vision and strategy. People and the culture within which they exist are the driving determination behind every great leader. Together they are what drive a company to greatness and they can also drive a company to failure. Leaders who make this connection understand that culture models corporate values, generates motivation, innovation, drives performance and builds company reputation. As Lou Gerstner said, “I came to see in my time at IBM that “culture” isn’t just one aspect of the game—it is the game.”

Imagine how successful you could be if your organization had a dynamic and innovative culture where employees continuously demonstrated passionate engagement amidst their work and in support of your customers. Peer Synergy Group, Inc. is passionate about helping our clients develop strategic roadmaps and processes for developing leadership relevance, vision, values, dynamic culture, and continuous innovation to build company reputation and market share. We have the tools to help you see and understand your organization’s present state of being without biases, and we provide the experience and expertise to successfully help you deliver your organization into the 21st Century global marketplace.
How important is culture to your company’s bottom line? It could make the difference between success and failure in today’s ever changing business environment.

Roger Blackstock is Founder & CEO of Peer Synergy Group (www.peersynergygroup.com), an Atlanta based organizational leadership and executive performance enhancement firm. Roger also serves as a Group Chairman for Vistage International (www.vistage.com), the world’s leading chief executive organization with more than 14,000 members in 16 countries. Blackstock is a U.S. Army Veteran, business executive, and trusted advisor to CEO’s with over thirty years experience. For more information you can reach Blackstock at roger@peersynergygroup.com or 770.530.2383.

Leadership Revevance

Properly aligned, dynamic organization cultures are a powerful force in business and are essential to elevate a company to the next level. Such cultures instill tremendous intangible qualities – employee loyalty, high morale, passionate engagement, innovation, and the willingness to seek change. All of which significantly impact tangible results – reduced operational and training costs, enhanced customer service, profitability, and revenue growth. The key ingredient here is “leadership relevance.”

What are you doing to develop relevant leaders within your organization? Today’s leaders must develop the wisdom to identify with today’s employees who span four different age generations, come from diverse and multi-cultural backgrounds, possess a wide-ranging work ethic, and varied thinking style from what most are accustom.

History reveals wisdom is the most valuable component of leadership. It is the other extreme from arrogance and autonomy. Much of wisdom stems from our desire to understand our true self, our strengths and weaknesses. This is the right first step, but leadership relevance requires that we demonstrate a continuous commitment to excellence, a caring attitude, noble character that earns the trust of others, and a calming responsive demeanor in adverse situations.

Wisdom is often viewed as the cumulative knowledge attained from a leader’s years of experience in his/her chosen field of expertise. So what is a young leader to do who doesn’t have the years of experience? Successful leaders learn what they need to know. The young leader must understand that wisdom is a character trait, which must be painstakingly developed as the leader expands his/her perspective on life. Never underestimate what you already know, or refuse to act on what you know is right. Gut instinct is critical to the success of every leader. When wisdom calls, listen. Never refuse the wise counsel of others or the opportunity to discuss elusive issues amongst your peers. These are traits that distinguish you as a relevant leader and one who is committed to your people.

When Wegman’s Food Markets of Rochester, NY, was recognized in 2005 as the number one company on FORTUNE Magazine’s list of the “100 Best Companies to Work For,” Robert Wegman received accolades for his understanding of leadership relevance and building a great organizational culture. It is noteworthy that Wegman’s motto is Our Employees Come First.

In their book, The Service Profit Chain, the authors (Heskett, Sussa, and Schlessiger) make the case that, “no matter what your business, the only way to generate enduring profits is to begin by building the kind of environment that attracts, focuses on, and keeps talented employees.” Unfortunately, during the “dot.com craze” many corporations became focused solely on the shareholders and lost focus on their employees and customers. I contend if you focus first on your employees, they will take care of your clients/customers, who in return will tell many others just how awesome your company is, and your shareholders will be most pleased with the outcome.

Data from the business schools of Emory, Stanford, and Harvard further supports this philosophy noting that for every 1% improvement you make in service climate you drive a 2% increase in revenue. Of course, it’s the leaders who must create the right emotional climate.

Your ability to demonstrate leadership relevance resonates your values and vision throughout the organization and is a driving force in building a dynamic culture, which will sustain creativity, innovation, and profitability for years to come.

Roger Blackstock is Founder & CEO of Peer Synergy Group (www.peersynergygroup.com), an Atlanta based organizational leadership and executive performance enhancement firm. Roger also serves as a Group Chairman for Vistage International (www.vistage.com), the world’s leading chief executive organization with more than 14,000 members in 16 countries. Blackstock is a U.S. Army Veteran, business executive, and trusted advisor to CEO’s with over thirty years experience. For more information you can reach Blackstock at roger@peersynergygroup.com or 770.530.2383.