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The kHUB Curator Team members have each been assigned a BoK section to own. This includes seeking, editing and sharing content related to that section. The curators are also sharing their perspective of various sub-sections of their chapter and contributing personal examples, experience, or related articles corresponding to the subject matter.
The BoK section on Culture, Teams and Leadership leads off with “While strategies, processes, and tools are important for product innovation success, ultimately it is people that really matter.” People are the ones who innovate, they are the ones that make things happen, they are the ones that develop and produce new products. How well this works often starts with the corporate culture.
Culture is the common set of shared beliefs, core values, behaviors, and expectations of the people within an organization. In most companies the culture has evolved over time. Often you will hear employees say, “that is how things are done around here.” Organizations with strong corporate cultures perform better, are more innovative and have more satisfied employees. Most companies define the values that would like to have their employees follow. But do they?
A study (the Culture 500 project) was done by MIT Sloan, CultureX and Glassdoor (https://sloanreview.mit.edu/culture500). They conducted a large-scale research project to try to measure corporate culture. They used a data set of 1.2 million employee reviews from Glassdoor. (You might expect some bias in some reviews on Glassdoor. However, when looked at in aggregate, you can get a view of what your employees think about the company.) Combining AI and human expertise, the Culture 500 project tries to provide a picture of corporate culture in the world’s top organizations from the view of the employees.
The Culture 500 project cited 9 Cultural Values as important. These are cited the most by leading companies and have the greatest impact on results:
Other values may be important to your company.
Why worry about culture? According to a survey by CFO magazine, Fuqua's Center on Leadership and Ethics (COLE), and Columbia Business School External Relations (1):
- 85% of CEOs and CFOs believe that an unhealthy corporate culture leads to unethical behavior.
- Over half of senior executives believe that corporate culture is a top-three driver of firm value.
- So, culture can affect the bottom line. Public companies caught committing corporate fraud lose, on average, 25% to 44% of the value of their equity. (2) Also, many talented employees leave due to a toxic culture.
It is important that culture is described and explained so employees know the culture. However, it is just as important that culture is perceived by employees, seen in the actions of people in the company and shared especially with new employees.
To see how your culture stacks up you might want to survey your employees and then to benchmark your company against the top companies in your industry and in other industries. How do you compare? What changes can you make to have a stronger culture?
1J.R. Graham, C.R. Harvey, J. Popadek, et al., “Corporate Culture: Evidence From the Field,” working paper 23255, National Bureau of Economic Research, Cambridge, Massachusetts, March 2017. 2A. Dyck, A. Morse, and L. Zingales, “How Pervasive Is Corporate Fraud?” working paper, April 2017.
About the Author
Rose Klimovich is Visiting Professor of Marketing and Management at Manhattan College in New York. She is also a Digital Marketing and Strategy consultant to small businesses and entrepreneurs.
Formerly, as the Vice President – Product Management and Product Marketing for Telx, Rose Klimovich created the Telx business strategy and developed the investment plan for new products and services in areas including colocation, cloud, Ethernet, and video conferencing. Rose’s team supported vertical markets including Financial Services, Media and Service Providers.
Prior to this, Rose was the Vice President of Business Strategy for AT&T, responsible for strategy development and investment decisions in new markets and technologies. Rose has more than 20 years of experience and achievement in designing, scaling and managing Internet, VPN and data businesses. Rose led AT&T to the #1 share position in VPN and to a leadership position in Internet Services.
Rose has an MBA and a BS in Math/Economics from Carnegie-Mellon University. Rose is Joint Chairperson of the Board of Directors of the Women’s Venture Fund.