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.