The Hidden Link Between Company Culture and Stock Performance
A Simple Way to Profit From Intangible Assets
I would argue that investors are overly obsessed with easily quantifiable metrics. In turn, this causes them to undervalue critical intangible assets simply because they are more challenging to quantify. One of these overlooked intangibles is culture.
A company’s organizational culture is its unique personality. It can be viewed as a system of shared assumptions, values, and beliefs that govern how people behave within organizations. All organizations develop a unique culture that serves as a guideline for its members and cannot be imitated. Indeed, culture may be the ultimate intangible, loved by all but valued by none. Today we will find out if there’s a connection between organizational culture and stock performance.
Culture and employees
“Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing.”
Brian Chesky, CEO of Airbnb
Strong culture has the advantage of reducing the need for explicitly defined rules and corporate bloat. Culture is the “first principle” that guides decision-making…
