Increasingly in the New Economy, the most important differentiator is proving to be corporate culture.
Research by Kotter and Heskett of Harvard Business School found that organizations with strong cultures had significantly higher performance than firms with rigid or weak cultures. The organizations with the strongest “adaptive” cultures saw their revenue grow four times faster, experienced job creation seven times faster, enjoyed stock prices that increased twelve times faster, and had 750% higher profit performance. Values guru Richard Barrett found that the return on assets and return on equity in companies with the best cultures was higher than the S&P 500 from 1991 through 1997. Malcolm Baldridge research on the comparative performance of winners against benchmark industry performance over a five-year period showed a statistically significant level of out-performance by as much as 34%.5 Denison Consultants found a similar relationship of outperformance in companies with strong cultures vs. companies with weak cultures over a 30 year period. And in our own research, the hypothetical "Superperformance Fund" outperformed the S&P 500 by a margin of five to one over a 20 year period, from 1985 to 2005.
Passion is always associated with Superperformance. This is the energy that not only produces great returns, but sustains them!
Organizations who want to be super must learn how to attract and energize hearts and minds.
People look for organizations who share their values, and organizations that align their values with those of their people are going to win the emerging culture wars.
