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Isn’t Time To Disrupt The Workplace Too?

What is the definition of a company culture? Is it the time we put in, whether an accountant’s 40-hour workweek or the 40 hours logged by an employee at your local zoo? Is it the organizational atmosphere, be it a loud, dark, closed office plan, high-walled cubicles with bright lights, or private offices with phenomenal views? Is it the esprit de corps exhibited at birthday parties, free soft drinks and recurring, ad-hoc talks with your manager?

Rob Peters
Jul 25, 2017 · 5 min read

Do companies with lousy company cultures initiate misconduct, like the example at VW where engineers apparently sensed the freedom to equip diesel engines with the ability to deceive the pollution monitoring instruments? Or the immoral accounting dishonesty at Toshiba, where executives reportedly exaggerated profits by an amazing $2 billion over a seven year period?

How about Amazon? In which the New York Times revealed an exceptional “Darwinian” company culture, with senior managers motivating their employees to criticize one another’s concepts in meetings and people suffering from physical ailments, were hustled out the door? As opposed to VW and Toshiba, Amazon’s stock performance this year has been exceptional, with a share price that has more than doubled in the last year. Jeff Bezos, Amazon’s founder has challenged the idea that the firm’s culture is as punishing as the Times asserts.

Shiva Rajgopal, an accounting professor at Columbia Business School, states that numerous research inquiries have studies company culture, but few have endeavored to quantify how business executives view its impact on firms’ efficiency, innovation, value and rate of growth.

Previous studies don’t look at corporate culture from an accounting and statistics perspective,” he says. “They are less concerned about whether culture affects investments, earnings and management.

Rajgopal collaborated with three co-authors from Duke’s Fuqua School of Business and polled more than 1,400 North American CEOs and CFOs over a 13 month period, ending in October 2015. An overwhelming number of the executives stated that healthy corporate culture is critical for a company to prosper.

In order to generate their research results, Rajgopal and his team strived to ask questions that would quantify what he acknowledges is an obscure notion. If you query about culture, how do you recognize that all the individuals responding are focusing on the same idea?

“Culture is like a “black box,” he admits. To try to break the box open, the 17-point survey asked things like, “How closely does your current corporate culture track with your stated firm values?” and “Do you think having a poorly implemented/ineffective culture at a company increases the chances that an employee would do something unethical (or even illegal)?”

Almost all the people responding to the survey concurred that company culture, however, it is interpreted, makes a difference in companies’ performance and value. Among the discoveries:

-More than 90% said that culture was important at their firms.

-92% said they believed improving their firm’s corporate culture would improve the value of the company.

-More than 50% said corporate culture influences productivity, creativity, profitability, firm value and growth rates.

-Only 15% said their firm’s corporate culture was where it needed to be.

-Who is responsible for transforming a company’s corporate culture?

Seventy percent of the people responding agreed with the following statement: Leadership needs to spend more time to develop the culture.”

The poll also inquired that if negotiating a purchase of another firm, would company culture make a difference. 46% of respondents stated they would not go complete a deal if they discovered that an acquisition target had a company culture that was not aligned with their own organization’s culture.

While Rajgopal believes that a broken company culture was a factor in the VW and Toshiba transgressions, he stated that what may look like a bruising culture at Amazon, aligns to the firm’s strengths. His wife used to work there, he stated, and for her, as he urges for all workers, an intense, highly proactive culture exhibits the firm’s stated mission. “Amazon’s whole positioning has been that they’re a 20-year-old startup,” he said. “We have to be hungry, we have to be nimble, we have to be desperate.” Amazon does not attract the typer of individual who would apply for a job at the local zoo. “When my wife worked at Amazon, I would barely see her,” he stated. “But looking back, she would say it was the best time she had at that phase of her life.”

The study’s core discovery strengthens something that we all know today:

Conclusion

The study’s analysts are hopeful that their research will open more discussion about how to enable that right culture. That conversation should start at the top of the hierarchy. “CEOs and CFOs are very clear that getting the culture right enhances value,” states Duke’s Campbell Harvey, one of the co-authors. “But it is a puzzle that if culture is so important to value, why do we hear very few CEOs talking about it?” Let’s hope this research sparks an open dialogue and begins the next actions to disrupt old and outdated workplace cultures with shared purpose, performance, and relationship capital.

www.StandardofTrust.com

Sources:

Rob Peters

Written by

Relationship Capital | Gamification | Co-Creator of Peer SaaS Platform | HR Tech and Workplace Culture Strategist | CEO| Author of Standard of Trust Leadership

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