How Culture Impacts Business Performance · 2020-03-23 · 3 How Culture Impacts Business Performance Your brand is a collection of shared beliefs based on the value you create for

How Culture Impacts Business PerformanceBusiness Case to Procure Leadership Commitment

© 2020 Culture Design, LLC

2How Culture Impacts Business Performance

“Each company’s prospects for growth are inextricable from its

ability to operate sustainably and serve its full set of stakeholders. The importance of embracing

purpose is becoming increasingly central to the way that companies understand their role in society.

A company cannot achieve long-term profits without embracing purpose and considering the

needs of a broad range of stakeholders. A strong sense of purpose and a commitment to stakeholders helps a company

connect more deeply to its customers and adjust to the

changing demands of society.

Ultimately, purpose is the engine of long-term profitability.”

Larry Fink, Chairman and Chief Executive Officer, BlackRock


Your brand is a collection of shared beliefs based on the value you create for society.

And, it is inspired by relationships and experiences.

84% of company value is in intangible assets, with over 25% attributed to brand value.

Ocean Tomo Intangible Asset Market Value Study



Your value is not in your rate, but in the

experience you create.

Only salient experiences that enable customers’ self-affirmation, helping

them feel confident about their purchase decision and the value

they derive from it, can help build lasting customer loyalty.

Creating a High Impact Customer Experience Strategy, Gartner, Inc.


Customer needs and expectations are constantly evolving based on the sum total of their experiences.

Customer experience drives over two-thirds of customer loyalty, outperforming brand and price combined. Creating a High Impact Customer Experience Strategy, Gartner, Inc.


And so are employees’.

Organizations with the highest levels of employee engagement saw the following results: The Construct, Measurement, and Impact of Employee Engagement Study

90% better growth rates than competitors87% showed a predicted increase in revenue 86% reported an increase in market share57% reported lower employee turnover90% reported higher stock prices


Engaged employees engage your customers.

Companies in the top quartile of engagement have a 50% higher

shareholder return and 10% higher customer ratings.

There is no correlation between engagement and pay level.

Gallup

Employee engagement explains 2/3 of their client experience scores. Increasing client satisfaction by 5 points on an account leads to an

extra 20% in revenue, on average.IBM / HBR Study


Healthy, thriving cultures are built on

passion and purpose.

Engaged employees are 87% less likely to leave an organization.

Corporate Leadership Council

Engaged employees have 18% higher productivity and 60% higher quality than disengaged employees.

Insync Surveys


Workers with high purpose and well-being are 20 times more likely to be engaged at work than those who are not.

80% of college graduates “affirm importance of finding purpose in their work”, but less than half succeed.

Graduates with a purpose in work are nearly 10 times more likely to have high overall well-being.

People who can align their work with their interests, values, and strengths are about 3 times more likely to experience high purpose.

Gallup’s Forging Pathways to Purposeful Work Study

Purpose is not a new buzzword. It is a new norm.


Purpose is the seed of inspiration and your culture is the water that makes it grow.

40% of team project success is attributed to employee motivation.

The Effects of Incentives on Workplace Performance


Increasing employees’ confidence and ability to think and behave in desired ways are 2.4 times more likely to see change success.

When influential leaders are engaged in helping motivate employees to change, efforts are 3.8 times more likely to succeed.

Beyond Performance 2.0

Culture is the manifestation of collective consciousness and behavior.


With each new strategy, your first question should be,

“Is our culture capable of…?”

87% of employees worldwide (70% in U.S.) are not engaged at work – “they’re just there.” Gallup’s State of the American Workplace


Employee turnover cost companies $223B over

the past five years.

62% of American workers are not very satisfied with their current job.

48% have thought about leaving their current organization.

20% have left a job due to workplace culture.

25% dread going to work, don’t feel safe voicing opinion, and don’t feel respected and valued at work.

Society for Human Resources Management


You cannot manage people like pawns

and expect them to perform like queens.

58% of those who left claim People Managers are the main reason for leaving.

76% say their manager sets the culture of their workplace.

36% say their manager doesn’t know how to lead a team.

60% say their manager fails to frequently engage in honest conversations about work.

Society for Human Resources Management


Mid-level people managers can be your greatest resisters or your most influential agents of change.

SeniorLeadership

MiddleManagement

EmployeeAdoption

ChangeResisters

Cross-FunctionalIntegration

*

LIKELIHOOD OF SUCCESS

20% 60% 80% 90% 100%

*A new idea can represent an actual idea implemented, or any new strategy, tactic, capability, initiative, or behavior that is intended to be adopted by the organization.



Change requires the will of the people.

70% of all change initiatives fail due to employee resistance.John Kotter, Leading Change, HBR

“What changes? More things for me to do? How can they expect me to take on

more things? Ugh! Wishful thinking!”

“Why do I need to change? Are they saying what I am currently doing is

wrong? I’m not the problem! They are

the problem!

“When will this transformation

be over? I didn’t realize it would take so much time, money,

and resources.”

“Where do they think they are? We have a very different way of

doing things here than they do over there.”

“How do they want me to do this now? Never mind, I’ll do it the way

I’ve always done it. If it’s not broken, then don’t fix it.”


Culture is shaped by the ideas we share, stories we tell, and

behaviors we observe.

Most leaders are unaware of 40% of the key influencers within their organization.

When asked what they would have done differently, 44% of

change leaders indicated they’d move faster to neutralize

people resistant to change. Beyond Performance 2.0


Leaders must be the change and

lead by example.

Transformations are 5.3 times more likely to succeed when

leaders model the behavior they want employees to adopt.

Nearly 50% of employees cite the CEO’s visible engagement and

commitment to transformation as the most effective action for

engaging frontline employees.

Transformations are 2.6 times more likely to succeed if there is strong involvement from the

top of the organization. McKinsey & Company


Culture creates the conditions that make

change possible.

By putting equal emphasis on both business performance and organizational health, change programs improve

their odds from 30% to 79%, and on average deliver 1.8

times more impact than if the focus is put disproportionately

on one or the other. Beyond Performance 2.0


Authentic connections with co-workers improve

performance and recognition.

Psychological safety is the #1 variable in high performance teams and successful companies.Google Study


Diversity and inclusion delivers

business outcomes.

Inclusive leadership improves team performance

by 17%, decision making quality by 20%, and team

collaboration by 29%.

Deloitte

Companies in the top quartile for racial and ethnic diversity are 35% more likely

to have financial returns above their respective

national industry medians.

McKinsey & Company


Pride and commitment unlock exceptional

performance.

Employee satisfaction increases employee’s identification which

has a positive impact on employee performance and their commitment to the organization.

The Construct, Measurement, and Impact of Employee Engagement Study


RELATIONSHIPS(how you connect)

Culture is a system of relationships that influence

brand perception.

Employees are 3 times more likely to stay in a purpose-driven organization.

Nearly 90% of customers believe purpose-driven companies produce

the highest quality products.

Purpose-led companies outperformed the S&P by 10 times from 1998 to 2014.

Kumanu



Change programs that focus on effective prioritization and planning of implementation from top down are 1.7 times more likely to succeed.


Vision without execution is just a dream.


What you measure determines where you focus and what you are motivated to improve.

By clearly defining and setting aspirations and performance targets for your organization, change programs are 3 times

more likely to succeed.

Change programs that track progress and impact through clear metrics and milestones are 7.3 times more likely to succeed.




Change programs that allocate sufficient personnel to support initiatives are 3.6

times more likely to succeed.

Programs are 5.5 times more likely to succeed when

everyone understands how their work relates to the

overall change aspiration.


Change is complex because people

are complex.


Successful strategy execution depends on purposeful stakeholder engagement.

Change programs that deploy their best talent to carry out a change plan report 5.5 times

higher success rates.Beyond Performance 2.0


High performing teams are built on diversity,

inclusion, empowerment and collaboration.

Diverse co-creation can improve decision-making quality by more than 50%.

Allowing staff to contribute to planning change initiatives will increase

likelihood of success by 3.4 times.


Change programs who establish their vision and purpose for change by an organization-wide collaborative effort are 1.6 times more likely to succeed.


Cross-functional alignment and change management processes are needed to drive collective action.

Companies with broken practices in any one of personal ownership, role

clarity, strategic clarity, and competitive insights have a near-zero

chance of attaining top-quartile health.

Change programs with a governance structure that provides

clarity in roles and responsibilities are 6.4 times more likely to succeed.


On average, only 2% of employees can list the company’s top three priorities.

Inc. Magazine


Change programs that make the organization feel engaged and energized through communications and involvement are 4 times more likely to succeed.


From moments to momentum.


A growth mindset is in a constant

state of change.

Companies that build the capacity for continuous learning

are 2.6 times more likely to sustain change success.

Change programs that implement a systemic knowledge

sharing platform are 4.2 times more likely to sustain success.



Our world has changed.Our needs have not.

Programs that communicate and embed an emotionally compelling narrative about the desired change

are 3.8 times more likely to succeed.

The #1 thing change leaders would have done differently is spending

more time developing and communicating the change story.


Together we will create a better tomorrow.

The emotional journey drives brand

love and loyalty.


Purpose-centered culture design has a significant return on investment.

Design-focused and purpose-driven organizations outperform S&P 500 companies by over 3.5 times.

Fostering purpose with consistent intentions: +20%

Connecting monthly with stakeholder ecosystem: +25%

Saving time for problem solving and refinement: +25%

Collaborating daily with teams across functions: +38%

Exploring and testing 5+ ideas in parallel: +50%

Providing autonomy and clarity of the process: +69%

IDEO’s Creative Difference Survey

PURPOSE-CENTERED DESIGN



“Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

Business Roundtable, Principles of Corporate Governance

181 Top CEOs Have Realized Companies Need a Purpose Beyond Profit

Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.

35How Culture Impacts Business Performance All rights reserved © 2020 Culture Design, LLC

About Culture Design, LLC

Culture Design, LLC leverages evolutionary science, applied anthropology, and systems design to helporganizations meet the evolving needs and expectations of society, maintain their relevancy and desirabilityin the market, and maximize the full potential of their organization to improve business performance. We area global network of purpose-driven consultants, designers, and researchers, consisting of communicationstrategists, brand developers, experience designers, anthropologists, social scientists, leadership advisors,executive facilitators, and transformation architects. Our decentralized model allows us to be agile andadaptive to both your specific needs, as well as to the needs of our rapidly changing world.

Culture Design, LLC(917) 686-4816 | HelpMe @CultureDesign.com

Evolve with purpose.

CONSULTING/SERVICES COMPANIES - 2020

TOP 10ORGANIZATIONALDEVELOPMENT

We help organizations develop sustainable cultures to manage change efficiently, ensure strategy realization, deliver brand promises, and achieve operational excellence.

http://culturedesign.com

Documents

How Culture Impacts Business Performance · 2020-03-23 · 3 How Culture Impacts Business Performance Your brand is a collection of shared beliefs based on the value you create for