Does Organizational Culture Really Impact Results?

Organizational culture has become a buzzworthy subject in recent years — but its rise to prominence has been accompanied by a growing misconception of just what, exactly, it consists of. 

Many people equate perks like casual Fridays and flexible work hours with organizational culture. Skeptics may argue that these policies make employees feel good and even have a marginal effect on productivity, but ultimately come at the expense of revenue and company goals.

However, this interpretation arises from a fundamental misunderstanding: organizational culture is not about team happy hours or vacation policy. Rather, culture relates to the ways in which employees approach their day-to-day work while fostering a sense of personal accountability for larger organizational goals. 

Make no mistake: there is a clear, causal relationship between organizational culture and a company’s Key Results. In fact, in our research 96% of respondents cited culture as more important than strategy in impacting business results.

The Counterproductivity of Toxic Organizational Culture

You’ll likely encounter plenty of people throughout your professional life who are skeptical of the power of positive organizational culture. But ask these same people whether a toxic work culture can yield good results, and you’ll find unanimous agreement: of course it can’t! 

It’s well understood that one’s work environment has a tremendous influence productivity. Our research confirms there is a statistically significant relationship between employee engagement and taking effective action: as engagement increases, taking effective action rises as well; and higher engagement also leads to higher achievement. 

As professionals increasingly move between multiple companies during their careers rather than remaining at one company for the long haul, building a positive work culture can have major implications for employee retention. As former Citicorp CEO Walter Wriston once said, “Intellectual capital goes where it is wanted, and stays where it is well-treated.” Not only as workers, but as humans, we are more motivated to do good work when that work is clearly valued by peers and superiors. 

When leadership doesn’t seem to be invested in employees’ work, those employees won’t be invested in their work either. Only 30-40% of workers in the US are engaged at work, and this figure is even lower globally, where only 17% of employees report that they are engaged at work. These dissatisfied professionals are more likely to pursue career opportunities with other companies — but if the economy or job market is lagging in a particular industry, employees may decide to bide their time with their current employer. While this may stave off an immediate loss of human capital, it has similarly disastrous effects on productivity.

Creating an Organizational Culture of Accountability

A positive organizational culture encourages employees to invest in a company’s success. In a positive work environment, all employees have a clear understanding of their organization’s most important objectives and their role in reaching them. That’s why the first step in fostering a culture of accountability is creating Key Results that every employee understands and feels accountable for achieving.

Note that Key Results won’t be effective in creating accountability in the workplace if employees aren’t 100% clear on what they mean, how they will be measured, and what exactly they must do to help the company reach them. A culture of accountability is one in which every employee feels responsible for the company’s overall success, not just the duties allocated by their job description.

Consider this analogy: when a football is fumbled, who should try to recover it? The answer, of course, is every player; whether on offense or defense, players jump on the loose ball. Everyone takes ownership in recovery of the ball, because they are motivated by the overarching goal of generating a win rather than a loss.

This principle, which is accepted as a given in the world of sports, should also be considered the gold standard for your employees. Only in a positive organizational culture — where every employee takes accountability for Key Results — can important benchmarks be achieved.

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