Why High-Growth Companies Invest In Culture
A leader with vision pays close attention to the quality of their company culture, and they view their company culture as an investment, not an expense. And focusing on company culture has proven to generate a massive return on investment.
A ten-year study by Harvard professor John Kotter compared public companies with a strong focus on corporate culture to companies without.
- Firms that had a strong focus on corporate culture increased their revenue by 682 percent, compared to just 166 percent for non-culture focused firms.
- Their stock price increased by 901 percent, versus 74 percent.
- They saw a huge gain in net income: 756 percent, versus 1 percent.
- Their job growth increased 282 percent, versus 36 percent.
These results are staggering. To consider that the difference between a nine hundred percent and a seventy-five percent appreciation in equity value is attributable to the strength of a company’s corporate culture highlights the significance of this often-overlooked issue.
Strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results. Creating a strong corporate culture requires the CEO to act as a chief energizing officer. They set the frame for the company’s culture, they develop the big vision, and they align everyone to it.
These ‘Chief Energizing Officers’ highly value employees, customers, and owners and encourage leadership from everyone in the firm. So if customer needs change, a firm’s culture almost forces people to change their practices to meet the new needs. And everyone, not just a few people, are empowered to do just that.
While many organizations are wired for mediocrity, destined to shrink and disappear in the long term, those with a visionary CEO and strong corporate culture are able to remain excellent for decades.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make BIG Happen. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest-growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 67.8% during their time as a client, nearly four times the U.S. average and a revenue CAGR of 25.5%, more than twice the U.S. average.