Close this search box.

Corporate culture and performance: What’s the link?

Corporate culture sounds like a dull topic, but it’s critical to business success. It’s not just about the standard format for an in-house spreadsheet or the correct usage of fonts. ‘Corporate culture’ is just a sanitized term for something much bigger. It’s about the Epic Meaning that drives everything the employees do.

Think of any big multinational brand. You probably have a good idea about what they do, why they do it and what they stand for.

No-one likes a faceless organisation. Companies are made up of real people sharing goals and ideas and the corporate culture stems from their input.

In a 1992 research project, James Heskett and John Kotter looked at the corporate cultures of 200 companies and the long-term effect on economic performance. They found that companies with strong organizational cultures grew their net income by 756%, compared to 1% for the companies lacking in culture!

But how could corporate culture and performance possibly be so entwined?

Share the leader’s vision

Successful entrepreneurs are passionate about what they do. As they build the business, they have strong ideas about what the company stands for, their goals and the direction the company needs to move in.

As the business grows and takes on more people, it’s harder to get to know everyone on a personal level. But if they manage to inspire a strong corporate culture based around their vision, then every employee will know exactly what they should be working towards! In this way, the culture helps drive the company forwards without forcing the leadership to micro-manage everyone individually.

With a strong company culture, the meaning behind the business is immediately clear. This helps attract people who share the same outlook and are likely to fit within that culture. By sharing the vision of the leaders, there is also less tendency to adopt an ‘us vs them’ mentality. The culture helps humanise not just the company, but those in charge. This means that the employees can still relate to the top dogs even if they don’t have much direct contact with them.

Super Teamwork IllustrationLet employees connect with the company

On a similar note, employees find it much easier to relate to the company as a whole if it has strong culture and values. It’s not just a building they march to every day, but rather the culture brings it to life!

They really see themselves as part of a team, which will doesn’t just boost their productivity but it makes them more committed to the company. This keeps attrition rates nice and low, as staff are reluctant to leave a company they truly love. From a purely financial standpoint, low attrition rates are enough on their own to justify the importance of a strong corporate culture.

Again, this strong corporate culture will also help bring the right people on board. Job applicants will probably be aware of the culture and values from their research. This attracts people who really resonate with them and will put in 110% should they get the chance to work for you!

Rewarding great behaviour

By developing a strong corporate culture, you can encourage the right kind of employee behavior. For example, when it comes to running the business efficiently, collaboration is essential. If you reward people for great displays of teamwork, this sends out a signal to the rest of your workforce. They see that collaboration is viewed as a positive thing and they’ll be more likely to work together as well!

If you need ways to communicate your corporate culture and emphasise the values and principles of your business, the answer might just lie in your learning management system. Gamification elements let you remind employees of each of the values which define the company and reward them for demonstrating them.

corporate culture and performance

You can even tie this into reviews by setting a target number of badges to earn within a set period. So, for example, you can task employees with earning three of each type of badge over the course of the year. This is sure to get everyone living and breathing your values and principles, which in turn will make them more productive!

Corporate culture is an easy thing to overlook, but it is the fuel that keeps your employees engaged and spurs your business on to success. With a more engaged workforce, nothing will stand between you and your goals. Although it’s important, corporate culture isn’t the only ingredient in a winning engagement solution. To find out what else you need, download our Engagement Engine Workbook!

Like What You're Reading? Join the Growth Squad!

Subscribe now to receive exclusive access to our weekly newsletter. It’s packed full of the best L&D research, analysis and downloadable resources.

Table of Contents

Share Post

Read More About Updates

Like What You're Reading? Join the Growth Squad!

Subscribe now to receive exclusive access to our weekly newsletter. It’s packed full of the best L&D research, analysis and downloadable resources.


Unlock The World’s Most Impactful L&D Resources!

Our unrivalled treasure trove of white papers, research, tip sheets, infographics and more gives you all the L&D knowledge you need to start making an impact today. Happy exploring!

We are always working to improve your experience on our website. Part of this involves using cookies to collect data for statistics and personalization. Further information can be found in our Privacy Policy and Cookies Policy.