Why Investing in culture can unleash your business potential


What does organisational culture mean to you? Is it a cause for anxiety or hope? Creating a values-led culture can unleash the full potential of your business, writes business head of The House Consultancy Graham Massey.

Volkswagen was the poster child for “culture gone wrong” in 2015, and no doubt another blue chip business will be left counting the cost of cultural failure in 2016. The Libor scandal, Toshiba’s accounting woes, corruption at FIFA – the list goes on and on, all the way back to the South Sea Bubble. Despite all this, I wonder if we spend too much time thinking about company culture as a banana skin – the danger that our business might be the next Enron – and not enough time thinking about culture as a source of creativity, innovation and competitive advantage.

Don’t get me wrong: culture absolutely IS a risk factor. But I want to argue here that culture is also something far more inspiring, promising and hopeful.

Over the last ten years of working with firms to help instil values-led cultures, we’ve seen time and time again how much more a business can achieve when it gets culture right. I’m talking about firms where employees can see how their personal values align to the organisation’s values, and where those shared values are brought alive in every interaction, inside and out. We believe that there are three main benefits that flow from a healthy and aligned culture:

1 Higher productivity, higher revenues

As Richard Barrett puts it in his excellent book The Values-Driven Organisation, “culture drives performance by unleashing human potential”.

A healthy and aligned corporate culture allows employees to bring their whole self to work – boosting your bottom line in the process. There’s evidence to back this up. In The Seven Pillars of Leadership, Michael Cox and Michael Rock show that, in a job of medium complexity, highly motivated employees are 85 per cent more productive than those with average motivation. This rises to 127 per cent in jobs of high complexity. A study by the Wilson Learning Corporation also showed that 40 per cent of the variability in corporate performance could be attributed to employees’ personal satisfaction. Remember: this isn’t just about cutting down on sick days and reducing employee turnover. It’s about how much more employees bring to the table when they feel listened to, supported in their roles and aligned to the wider purpose and cultural values of the business.

2 Culture differentiates and helps you compete

Just as customers engage with your core purpose – the “why” of your business, they are also sensitive to your values and culture – the “how” of your business. In fact, it’s strong cultures that bring your purpose to life. This means that culture and values are powerful sources of competitive advantage.

Take Zappos, the online footwear retailer. It sells more or less the same shoes as every other retailer. Unlike its rivals however, it has grown to annual revenues of over $1 billion, with 75 per cent of customers being repeat customers – all despite minimal marketing spend. Why? Because CEO Tony Hsieh has made company culture the firm’s number one priority. Giving employees permission to be themselves has led to world-beating customer service, which has in turn delivered the tremendous competitive advantage of making Zappos customers evangelists for the company.

As Hsieh says, “if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own”. Employee- owned supermarket Waitrose and ethical bank Triodos are other great examples of businesses that differentiate themselves in the market through their values and culture, not just what they sell.

3 Culture makes you stronger and more agile

We live in a disruptive age. Globalisation and the digital revolution have made mincemeat of whole industries and radically reshaped the world of work. Empires vanish overnight (just ask MySpace or Blockbuster), while jobs and careers are more flexible but less secure. In short, the ability to adapt has never been more vital, both for individuals and organisations. This is where culture and values come in. When it comes to adaptability, purpose-led culture really does eat strategy before breakfast. If your decisions are guided by a strong sense of shared purpose and lived, values-led culture, your business will be in a stronger position to survive and thrive in uncertain and complex market environments – not least because your employees at the coalface will have a solid foundation from

which to respond and act with creativity and commitment. Resilient organisations and agile leadership flow from a healthy and aligned workplace culture.

Invest in Culture Now

I hope I’ve convinced you that there are positive, inspiring reasons to invest in creating a values-led culture. Don’t wait for something to go wrong: invest in your culture now and unleash the full potential of your employees and your business.

About Graham Massey

Graham Massey is co-founder of The House, a brand agency that exists to make business and brand a force for good. His passion is getting to the heart of organisations to create values-led cultures that are deeply rooted in purpose.