Culture Really Does Matter

Culture is the game changer, especially for businesses in today’s roller coaster economy. But what is culture?

Is it giving everyone free coffee and dictating a casual dress code? Or, is it something much more?

The best way to describe culture is that it’s what everyone does when no one is watching.

Culture is the way of life for an organization and its people. It’s the pervasive set of clear values that drives the thinking, actions, attitudes and guidelines of an organization and its people day in and day out. Companies have unique cultures as do families, sports teams, schools, and so on.

Get the culture right and your organization will thrive. Miss the mark, and without change, your company will slide. That sounds harsh, but it’s reality.

When a culture is based on strong positive values, when leadership models the behavior, when that behavior pervades every interaction by the company and its people, the organization can sustain its success and grow over the long haul.

Do you ever wonder why companies like Cisco, Google, and SAS thrive year after year? Or why retailers like, Costco, and Nordstrom get such great press? They are intentional and pervasive about their cultures. Their leaders define their values—the foundation for their culture—from the beginning. The companies differentiate by creating extraordinary and memorable experiences for their employees, customers, and partners. Nordstrom’s and Zappo’s customer service are legendary, so is Costco’s return policy.

Cashing In on Culture

A strong positive culture reflects in bottom lines, too. Companies with positive values-based cultures–as measured by the publicly listed companies on the CNN Money/Fortune Best Companies to Work For annual list–tend to outperform the U.S. stock market, according to analysis from Russell Investments ( Russell annually tracks the performance of this “Best” list against that of the Russell 3000 Index and the Standard & Poor’s (S&P) 500 Index.

During the period, 1998 to 2014, companies on the “Best” list saw a more than 664 percent increase in their cumulative stock performance compared with a 204 percent increase for Russell 3000 companies and only 190.7 for the S&P 500.

Beyond the numbers, overwhelmingly company leaders know that culture matters. That’s according to a Bain & Company survey of more than 350 companies in Europe, Asian, and North America ( Nonetheless, the same survey shows that very few of those leaders do what’s necessary to create a winning culture. Let’s look at some numbers from that Bain survey of company leaders:

  • 68 percent believe their culture is a competitive advantage.
  • 76 percent believe a culture can be changed.
  • 65 percent know they need to change their company’s culture.
  • 81 percent say an organization without a high-performance culture is doomed to mediocrity.
  • Less than 10 percent succeed in building a high performance culture.

Why is it so hard to get culture right? It’s because we’re all human, and with that comes individual experiences, prejudices, varying degrees of trust, and personal agendas. We too often think of the me instead of the we.

Companies and their leadership also often think of culture as the soft stuff versus the real and hard stuff that impacts the bottom line. The reality, as I mentioned above, reflects the fallacy of that.

So often, too, companies and their leaders balk at changing a company’s culture. They say, it’s too big and too expensive to even think about it. But it doesn’t have to be either.

Creating a positive culture starts with integrity and values, and then learning how to live those values on the inside and out. Living and acting with integrity doesn’t take extra cash. Neither does working within your stated values or volunteering in the community.  All are elements of a positive culture and all are up to leaders to model and team members to follow. A company’s success, in turn, follows.

When Ben Cohen and Jerry Greenfield opened an ice cream shop in Burlington, Vermont, in 1978, they wanted to make a good product, provide great service, and live their values. That was more than three decades ago, and zillions of scoops of Ben and Jerry’s ice cream later. Today their company—which they sold in 2000 to Unilever—still stands for those same values. Those values, Ben and Jerry told me several years ago, meant being socially responsible and giving back to the community. Looking back, the duo said, they now recognize the real impact their approach to culture had on their business and its long-term success.

If you’re still not convinced of the value of culture, next time you at a business or in a store, especially one you like dealing with, talk to the employees. Ask them about their jobs, whether they enjoy them, and why or why not. Do they like working for the company?

Their answers may surprise you. The best businesses have the happiest and most helpful employees, and it’s that way because of the best cultures.

To learn more about culture and its importance to your organization, check out my new book, It Takes More than Casual Fridays and Free Coffee: Building a Business Culture that Works for Everyone, available from Amazon or your favorite bookseller. You can also visit my website,, for more information.