Until a few years ago, I felt that any time or money spent on mission statements and corporate values was a monumental waste, except for the consultants getting paid to “help” you figure that stuff out. I’m a recovering management consultant, so I’m saying this with love, but every time I heard Peter Drucker’s famous “culture eats strategy for breakfast” quote, I would have an irresistible urge to roll my eyes.

I thought “values” were for big organizations that needed to fill up their corporate retreat agenda or website “About” page to compensate for a lack of purpose or progress. I was convinced that spending time or money on values had no place in a social enterprise that was well run (which by definition would be built around purpose, with a winning strategy and relentless execution).

Culture eats strategy for breakfast, technology for lunch, and products for dinner. Tweet This Quote

It turns out the consultants were right. Now, I’ve not only embraced Drucker’s mantra of culture-eats-strategy, but I’ve upgraded to Bill Aulet’s religion of “culture eats strategy for breakfast, technology for lunch, and products for dinner, and soon thereafter everything else too!”

Let’s first define culture, and let’s start by defining what it is not. Culture is not the articulation of an organization’s mission and values. It turns out that simply stating your values does nothing for your performance. A recent study of the Value of Corporate Culture among S&P 500 companies found that the existence and prominence of a defined set of corporate values made no difference to short or long-term financial performance. But, the study also found that the behavior of a company’s senior managers (and the values their behavior embodied) made a huge difference in determining performance.

Be deliberate and diligent about making sure company values are reflected in your team’s attitudes and interactions. Tweet This Quote

In other words, spending time and/or money coming up with an amazing list of your values is not enough. You need to be deliberate and diligent about making sure those values are reflected in your team’s attitudes and interactions. For the purpose of this post, let’s define culture as the combination of shared values, observed behaviors and accepted norms that drive your team members’ daily actions. Here are the top three reasons why a strong culture is your most important asset.

1. Culture can quadruple revenues and octuple job creation

Yes, it’s true. I don’t mean “true” in the sense of “if a coconut falls on my head, my head will hurt,” but more in the sense of “I can’t see or touch gravity, but it helps me explain and predict why lots of things happen.” A landmark study and resulting book called Corporate Culture and Performance found that companies with strong, performance-enhancing cultures achieve revenue growth of 4x, employment growth of almost 8x, and profit growth of over 750x versus companies that don’t have strong cultures.

Companies with strong cultures achieve profit growth of over 750x versus companies with weak cultures. Tweet This Quote

2. Culture can give you a permanent competitive advantage

Culture can provide a competitive advantage that money can’t buy, so don’t worry if you can’t afford a barista on every floor serving espressos 24/7. An awesome idea can be easily replicated, especially in the social enterprise space where most things are open source. A brilliant product or service can be copied in a flash, and a couple year advantage building a customer base or distribution channel can be shrunk down to a few months by a well-funded competitor. But a strong culture—one that propels employees to discover the next big idea, allows teams to consistently achieve outstanding results, and turns employees, customers and suppliers into loyal fans—can’t be easily replicated. As Lou Gerstner said in his book about the turnaround of IBM, Who Says Elephants Can’t Dance, “I came to see, in my time at IBM, that culture isn’t just one aspect of the game; it is the game.”

A strong culture—one that allows teams to consistently achieve outstanding results—can’t be easily replicated. Tweet This Quote

3. Culture is free

Building a strong culture is relatively “free” in terms of money, although definitely not free in terms of time and attention. By no means is it easy, though. It’s hard to find the time to invest in culture when you’re starting up, and even harder to find ways to sustain culture when you’re scaling up. But culture is your most important asset. Taking the time to define your organization’s values and making the effort to consistently model, measure and encourage the behaviors that reinforce those values are going to be the most important things you can do.

Building a strong culture isn’t easy, but it’s your most important asset. Tweet This Quote

Does your company have an awesome culture? If not, what’s keeping the organization from fixing it? And if so, what approaches have you taken to define, reinforce and sustain it?

About the author

Rajesh Anandan

Rajesh Anandan

Rajesh Anandan is SVP of UNICEF Ventures at UNICEF USA, Co-Creator of Kid Power—the world's first wearable-for-good—and Co-founder of ULTRA Testing, a high performance software testing company that employs individuals on the Autism Spectrum. @UltraRajesh

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  • Many of us don’t consistently nurture and re-enforce the culture that we want to see in our organizations. Is that because its not important, or because of a lack of time, tools or something else?

  • Rajesh,
    I think time is the greatest asset an organization can have if they are trying to develop a new cultural identity. Culture is the shared values, observed behaviors and accepted norms of an organization and culture is also everywhere. The difficulty is that we can’t separate ourselves from the existing cultural identities we occupy outside of an organization. That being said, culture is dynamic. Every time a person enters a new group setting they organize themselves around the cultural ideal of that group and the group identity arranges itself around the individual. It simply takes time for new members to become socialized and accustomed to their new cultural identities through participating in the group and receiving feedback from superiors or existing members of the culture. Willingness to conform, for lack of a better word, is what reinforces active participation, understanding and acceptance of new cultural ideals. There are a lot social tools like conditioning, social proof and even social aggression that develop with the cultural landscape. No matter how many supplemental materials or other tools you give them people will become educated through other people, which takes time.

  • I absolutely agree, I think that culture can ave serious impact on the aspects of a business. I think that as a millennial we tend to look more at the company culture and gage what it would be like to work in that company. of course a good pay check is important, but why not have both. I think it is very possible for a company to not have to spend a ton of money to make their company culture something to talk about.

  • This post makes me think of how important culture is for the success and attitude of a company. It also reminds me of the Enron scandal because the culture at Enron among top executives led to the company’s downfall. One thing I do agree with is that building a culture is not an easy task but when the culture is established it can be such an important attribute to a company’s success.

  • Thanks Charlee, agree that there doesn’t need to be a tradeoff between meaning and money! Have you experienced/come across any awesome things companies and/or teams are doing to build a strong culture that aren’t expensive to implement?

  • I think this is a really cool post because it talks about how important culture is and can be. The post defines culture as the combination of shared values, observed behaviors, and accepted norms that drive action. I think that our culture will define what our actions will be in life. And how our values and morals are going to define our action

  • Having a set values to believe in and to set as standard for the rest of your company to follow is an important step that can be taken by any business despite it’s size. I was always one to believe the same idea, that it was a waste of time to focus on things like culture that don’t actually effect the way your company does business. This article does a great job explaining why it is important to have a sense of culture in your business and to capitalize on it.

  • I enjoyed how this article pointed out the major benefits of having a positive work culture. I was unaware of how it could not only positively effect workers but substantially boost the productivity and profits of a company. I believe more companies should try to implement this idea.

  • For a such a mercurial, immeasurable trait culture is so key. I think the reasons why culture is undervalued by companies is because it’s something that is gradually apparent. Companies want hard measurable changes to drive success and culture is a slow moving transition which does not lead directly to advancement but rather build a platform to allow easy access to advancement. Even if a company manages to nurture a culture throughout its employees there is still the question of if it’s a positive culture. As someone below stated ENRON had a distinct culture and that culture led to their downfall. I feel like culture is a powerful weapon that when utilized correctly can be immensely effective however it is hard to grow and harder to ensure that its a positive one.

  • It’s amazing that people are just now realizing/talking about the value of culture in business. You hear the talk of personal culture, ethnic culture, sports culture, collegiate culture, etc., but only as of late do you hear about corporate culture. Culture is key to how a corporation’s employees interact or how they make decisions. Culture is now part of the interview process; you dress to the company’s standards and they ask, “How do you see your fit in our company’s culture?” Despite this, people still don’t see the value of it. I love how he mentioned the revenue, employment, and profit growth of a strong cultured company in comparison to companies with weak culture. I can’t wait to see culture gain more and more value as it continues to fade away.

  • I really enjoyed this article. I also think that culture can be extremely fun! We see this in companies like Google and Facebook, whose employees enjoy creatively and custom designed work spaces, creating a more fun and relaxed place to work. By creating a fun and exciting corporate culture, you are able to encourage employee creativity, innovation, and buy-in within your company.

  • Free but not routine things to build a culture: (From our culture shaping practice at http://www.senndelaney.com/company.html
    – Expect, reinforce and reward the behaviors that you want to see that build/reinforce your corporate values. (Of course, you first need to define them)
    – LEADERS MODEL those behaviors yourselves (a MUST) before expecting others to do so.
    – Make time during meetings (10 min) to talk about the expected behaviors and how they impact the topic of the meeting, the decision, etc. Tie the corp values to the results who expect.
    – Share personal stories of you, the leader, before having the awareness of the importance of culture and after and what changed. Sharing your own vulnerability about not being perfect yet realizing what was needed inspires others to do so.
    – Review your corporate systems (HR, Communications, Operations, etc) to make sure they are aligned with what your corporate values spouse.
    – Find simple gadgets/symbols/posters that easily remind people of the commitment to live the values. People can use these items in meetings, with themselves and each other in safe way. It creates trust and builds a common new language.
    – There are many, many more FREE things. They ought to be simple but NOT simplistic.
    Make these practices immediately applicable, emotionally enticing and easy to remember.
    – And of course, measure, measure, measure the progress and impact on business results!!

    Shaping a culture takes time, and a concentrated effort. It requires impact at personal, team and org. level. and yes it takes $$$. Many of the tips above are part of a reinforcement step but you first need a diagnosis and design, then host key conversations to make the business case and get people on board. A team of c-suite leaders overseeing the effort is a must as well.


  • Rajesh and McKenna – I think this is an interesting question. Besides the constraints on time and resources which (as Mckenna pointed out) are major barriers to overcome – there is something else that McKenna brought up in passing that got me thinking. “…we can’t separate ourselves from the existing cultural identities … we occupy outside of an organization”. If you think about the cultures that survive/thrive – they generally have a strong focus on social outcomes and helping members of the community. When we look at the modern corporation where we have separated ownership and control – employees are asked to focus on the welfare of outgroups like shareholders and customers – sometimes to the detriment of employees and their community, village, etc. I can imagine this would create dissonance between the social norms and values we grew up with and believe are part of our culture, and the norms and values that support a focus on shareholders and customers. So, to your question – I think part of the reason why enduring corporate cultures are difficult to develop is because they have to thread the needle between our norms and values and the modified norms and values that are needed to meet the needs of customers and shareholders that we cannot identify with. Thoughts?

  • Clearly cultural diversity is an added benefit to businesses, especially considering that this increases the level of cognitive diversity. Studies show that the more cognitively diverse your group is, or in this case your business, the more success you will have because of the varying viewpoints and perspectives that cognitively diverse people bring to the table.