The Relationship between Corporate Culture and Growth

The Relationship between Corporate Culture and Growth
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Corporate Culture Affects Revenue Growth
If you want to create year over year revenue growth, be sure you understand the relationship between corporate culture and growth.  Smart leaders know growth strategies must go through culture to produce results.  How the company culturally views areas like decisions, customers, markets, quality, and risk tolerance plays a key role in go-to-market strategy execution.

What Corporate Culture Is
We think of corporate culture as how things actually get done in an organization.  It is the way employees think, behave, and work.  It includes the values and beliefs that drive business behaviors and practices.  It is guided especially by leaders in who they hire, fire, and promote and how they themselves behave.

What the Corporate Culture Research Says
Harvard Business School recently reported that an effective workplace culture can account for up to half of the differential in performance between organizations in the same industry.  Our own organizational alignment research found that cultural factors accounts for 40% of the difference between high and low performing companies in terms of:

  • Revenue growth
  • Profitability
  • Customer satisfaction
  • Leadership effectiveness
  • Employee engagement

Needless to say, organizational culture does indeed play a powerful role in a company’s growth strategy.

A Bad Relationship between Corporate Culture and Growth
An example of a bad relationship between corporate culture and growth would be Wells Fargo.  The toxic sales culture at Wells Fargo essentially caused the company’s 2016 debacle and continues to cause serious problems.  It was recently revealed that Wells Fargo may have charged half a million of its clients for unwanted auto insurance.  And this after the scandal that broke over the revelation that the millions of unauthorized accounts were opened as a result of a push for revenue growth.

Where were their corporate values about serving their customers with integrity?  The organization became a target of congressional hearings, their stock suffered huge losses, and there was a leadership shakeup. Not the year-over-year growth they were looking for.

A Good Relationship between Corporate Culture and Growth
We consider Zappos an example of a good relationship between corporate culture and growth.  Zappos touts its Culture of Wow whereby each employee is empowered to live the company’s commitment to deliver out-of-this-world customer service.  The company claims that their “Core Values are more than just words; they’re a way of life.”

They believe as we do that “companies with a strong culture and a higher purpose perform better in the long run.”  Their belief led to their phenomenal success reaching $1 billion in sales in less than ten years.

The Bottom Line
Pay close attention to the relationship between corporate culture and growth.  Your growth strategy must go through your culture and your people to be successfully implemented.  Accordingly, your culture can make or break your go-to-market plans for high growth.

To learn more about the relationship between corporate culture and growth, download The 3 Levels of a High Performance Culture

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