Donald Sull, Charlie Sull and Andrew Chamberlain* say a vibrant workplace culture can help people thrive professionally, enjoy their job, and find meaning in their work.
Workplace culture matters more now than ever.
The average employee spends 40 per cent of their waking hours at work.
A toxic corporate culture can be not only soul destroying, but it can sink an organisation.
On the other hand, a vibrant culture can help people thrive professionally, enjoy their job, and find meaning in their work.
A growing body of research has shown that a good organisational culture can lead to better financial performance, more innovation, and greater customer satisfaction.
A recent survey of CEOs and CFOs found organisations listed among the best places to work based on their corporate culture delivered nearly 20 per cent higher returns to shareholders than comparable organisations over a five-year period.
And, according to Glassdoor data, workplace culture is among the top factors that job seekers consider as part of their job search.
But what exactly is “culture”?
Culture has often been an arbitrary term measured on a binary good or bad scale, with no clear guidelines on what makes a culture “good” and “healthy” or “bad” and “toxic”.
A few years ago, we set out to change this.
We wanted to create a more precise definition of culture, quantify its effect on bottom-line performance, and compare the corporate cultures of more than 500 organisations.
(The result is an interactive tool, the Culture 500, in partnership with Glassdoor and MIT Sloan Management Review.)
First, to create a more precise definition of corporate culture, we were guided by the definition put forth by Charles O’Reilly and Jennifer Chatman, who define organisational culture as “a set of norms and values that are widely shared and strongly held throughout the organisation”.
We then mined the official statements from large employers in which they list specific values of their corporate culture, such as integrity, customer-centricity, or respect, that together defined the culture the organisation aspired to achieve.
In this exercise, we identified more than 60 distinct values that organisations listed in their corporate values statements and narrowed down the values to the nine that were cited most frequently.
These values, which we call the Big Nine, are as follows:
- Agility: Employees can respond quickly and effectively to changes in the marketplace and nimble seize new opportunities.
- Collaboration: Employees work well together within their team and across different parts of the organisation.
- Customer-centric: Employees put customers at the centre of everything they do, listening to them and prioritising their needs.
- Diversity: The organisation promotes a diverse and inclusive workplace where no one is disadvantaged because of their gender, race, ethnicity, sexual orientation, religion, or nationality.
- Execution: Employees are empowered to act, have the resources they need, adhere to process discipline, and are held accountable for results.
- Innovation: The organisation pioneers novel products, services, technologies, or ways of working.
- Integrity: Employees consistently act in an honest and ethical manner.
- Performance: The organisation rewards results through compensation, informal recognition, and promotions, and deals effectively with underperforming employees.
- Respect: Employees demonstrate consideration and courtesy for others, and treat each other with dignity.
* Donald Sull is a senior lecturer at the MIT Sloan School of Management and co-founder of CultureX. Charles Sull is a co-founder of CultureX. Andrew Chamberlain is Chief Economist at Glassdoor.
This article first appeared at mitsloanexperts.mit.edu.
