Culture Trumps Strategy with Amazing ROI

I’ve been talking a lot recently about Zappos where the corporate culture is a central pillar that drives everything they do.  Their clear sense of purpose, shared values and strong sense of identity are credited with their success – but as a privately held company the tangible ROI is hard for outsiders to prove (could it just be that they are operationally excellent?) – I don’t believe so but a detailed evaluation of Zappos is an entirely different post.

I came across this very interesting article re-acquainting us with research from 1992 which found that a company’s Culture was a linked with a significant difference in overall financial performance.

In particular the type of culture quoted as being so effective was one that

highly values employees, customers, and owners and that those cultures encourage leadership from everyone in the firm.

This type of culture was responsible for an average net income growth of 756% versus 1% for a company without this culture.  

These values were credited with enabling the companies to respond to ever changing customer needs and therefore remain relevant in the marketplace – I suspect though and the article strongly implies that there is a deeper connection that this.

If you’re looking for some stats to justify the ROI of Culture then I highly recommend you dig out their book Corporate Culture and Performance and read the original research.  The authors remain convinced that their study was robust.

So what IS going on?  There are already studies linking CX Leaders with outperforming the S&P 500.  Do we need any more bottom line proof?  What’s holding back the CEOs now?

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