GLOBAL KNOWLEDGE CENTER

EIGHT CRITICAL CULTURE FACTORS OF THE HUMAN EXPERIENCEby Evelyn Lee Regional Workplace Manager Workplace Strategy and Human Experience Global Strategy

with research update

by Dr. Melony Bethala Senior Research Analyst Global Knowledge Center

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Those outcomes require sometimes-fundamental shifts in culture, changes to business and operational processes and the development of an environment that fosters happy, engaged and productive employees. In short, organizations must focus as much on the holistic workplace - The Human Experience - as they do the physical workspace.

The Human Experience is about creating a culture that exists both inside and outside the architecture or place inhabited by the organization. It focuses on providing an environment that motivates employees, makes them want to come to work, increases productive time vs. idle time and promotes a cohesive workforce who understand how their role impacts the future of the organization and contributes to their happiness and job satisfaction. This pursuit of employee happiness may seem a bit esoteric, but it’s actually very pragmatic in today’s competitive employment market, which places a premium on attracting and retaining top talent.

An individual working a typical 8-5 business day spends 35 percent of his or her life in a corporate office setting, a setting that encompasses everything from the practical (the personal and office technology they interact with on a daily basis) to the aspirational (their prospects for growth and professional development) to the mundane (the quality of the snacks available in the employee break room). What we’ve always understood as the workplace now extends far beyond the context of physical space and beyond the sole purview of the real estate and facilities teams – it’s a whole-office engagement, from IT to Operations and HR.

The Human Experience Culture process evaluates workplace characteristics, technology and culture based on eight critical factors:

• Diversity and Inclusion: demographic diversity as well as diversity in skills and aspirations of individuals that contribute to the culture’s identity

• Sustainability and Longevity: the self-sufficiency and sustainability of a culture’s operations

• Employee Health & Wellness: The level of cultural support and development with an organization in terms of physical, psychological, emotional, and social health.

• Social Cohesion: the various degrees to which a culture inhabits a place both as seen through the experiences of the individual or the whole company.

• Decision Making: the processes and influences that drive a culture’s decision-making process, i.e. how it uses data, the input of the individual voice vs the collective, the influence research and/or external factors contribute, etc…

• Risk and Change: how a culture views, handles and allows or restricts certain practices relative to risk and change

• Management Practices: how an organization’s management approach is reflected in the culture

• Technology Adeptness: how proficient and adaptable is a culture’s approach to technology

It’s very inclusive and transparent, this Human Experience process, representing a true paradigm shift in how organizations approach workplace strategy. It’s equal parts sociology, psychology, organizational behavior and architecture – the intersection of workstyle and lifestyle - requiring a high-level understanding of, and a high degree of sensitivity toward the workforce, knowing what is and what isn’t working for them.

Steven Covey, renowned motivational speaker and best-selling author, said, ‘Always treat your employees exactly as you want them to treat your best customers.’ The Human Experience is the process through which that ideal can become reality by enabling organizations to tailor workplace environments that make employees want to come to work, be active participants, and perform at an optimal level.

EIGHT CRITICAL CULTURE FACTORS OF THE HUMAN EXPERIENCE

BY EVELYN LEERegional Workplace Manager Workplace Strategy and Human Experience, Global Strategy

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The culture of a company takes into consideration the human experience as well as “the values, beliefs, behaviors, artifacts, and rewards systems that influence people’s behavior on a day-to-day basis.” Research show that the culture of an office has a significant impact on an organization’s revenue and productivity.

In the 1992 book Corporate Culture and Performance, James Heskett and John Kotter found that strong corporate cultures are closely associated with positive financial results. Organizations that develop a distinct brand identity and “highly value employees, customers, and owners”1 experience increased revenue, employment growth, and higher net income for the organization.

The book highlights the difference in financial results in an eleven-year period between twelve companies that had performance-enhancing cultures and twenty companies that did not have these cultures. Heskett and Kotter’s data is summarized in the chart below:

Exhibit 1: Heskett and Kotter’s comparison of companies with and without performance-enhancing cultures over a twelve-year period in the 2012 book Corporate Culture and Performance.

Skills

Average Increase of Twelve Firms with

Performance-Enhancing Culture

Average Increase for Twenty Firms without

Performance-Enhancing Cultures

Revenue Growth 682% 166%

Employment Growth 282% 36%

Stock Price Growth 901% 74%

Net Income Growth 756% 1%

Source: Kotter, J. (2011). Does corporate culture drive financial performance? Forbes. February 10, 2011.

RESEARCH UPDATE

BY DR. MELONY BETHALASenior Research Analyst, Global Knowledge Center

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The results from their study are staggering. Organizations with performance-enhancing cultures experienced a revenue growth that was four times higher than companies that did not encourage all-inclusive participation and performance. These companies also experienced employment growth that was almost 8 times higher, stock prices that were twelve times higher, and net income growth that was 756 times higher than the average annual increase of companies without performance-enhancing cultures.2

Ultimately, shifts in culture and organizational performance start from the ground up. Heskett and Kotter found that “if a customer needs change, a firm’s culture almost forces people to change their practices to meet the new needs. And anyone, not just a few people, is empowered” to make that change.3 The findings of their study still hold true today.

Companies with performance-enhancing cultures build a distinct brand identity. According to Kotter, Zappos is a great example of this type of high-performance culture that empowers employees and drives business. Zappos’ website highlights the importance of culture in stating, “We know that companies with a strong culture and a higher purpose perform better in the long run.” The company’s values include a range of cultural aspects focused on positive change and individual empowerment. Some core values include embracing and driving change; being adventurous, creative and open-minded; building a positive team and family spirit; being passionate and determined; and pursuing growth and learning.4

“If a customer needs change, a firm’s culture almost forces people to change their practices to meet the new needs. And anyone, not just a few people, is empowered”

“We know that companies with a strong culture and a higher purpose perform better in the long run.”

Zappos’ website integrates a positive work culture with shoe retail by publishing articles on the culture of the company, a lifestyle blog, and documenting their philanthropy program. Performance-enhancing cultures like the one Zappos celebrates encourage employees to develop leadership qualities that will help them grow in their roles and as part of a team. The following statistics, compiled by Culture IQ, demonstrate how important it is to have a corporate culture that supports the human experience:

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Over a period of seven years, companies with more engaged workers grew revenue 2.5x as much as companies with less engaged workers.7

Additionally, a Gallup 2017 report on the “State of the American Workplace” found that only 33% of U.S. employees are engaged in their work. Only 22% of employees strongly agree that their leadership has a clear direction of the organization that will drive a positive work culture.8 The human experience is an essential part of a company’s culture that will impact success, revenue and productivity. It is important for leadership to look more closely at the human experience and organizational culture to design and deliver a compelling message that will encourage employees to perform at their best.

94% of executive and 88% of employees believe a distinct workplace culture is important to business success.5

86% of employees at organizations with strong cultures believe their senior leadership listens to employees, compared with 70% of employees at non-winning cultures.6

Exhibit 2: Entrepreneur and Culture IQ’s 2017 report which polled 28,371 employees from hun-dreds of companies across industries determined that following aspects as key to high-perfor-mance cultures.

Source: Culture IQ (2017). 2017 TCC Report: Building a High-Performance Culture: Key Lessons from Top Cultures

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BIBLIOGRAPHY

1. Deloitte Shape Culture - https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2016/impact-of-culture-on-business-strategy.html?id=us:2el:3dc:dup3020:awa:cons:hct16

2. Kotter, J. (2011). Does corporate culture drive financial performance? Forbes. February 10, 2011. Available at: https://www.forbes.com/sites/johnkotter/2011/02/10/does-corporate-culture-drive-financial-performance/#5acb545a7e9e. [Accessed November 19, 2018].

3. Kotter, J. (2011). Does corporate culture drive financial performance? Forbes. February 10, 2011. Available at: https://www.forbes.com/sites/johnkotter/2011/02/10/does-corporate-culture-drive-financial-performance/#2893e7c67e9e [Accessed November 19, 2018]

4. Zappos. Our Purpose. Undated. Available at: https://www.zappos.com/about/purpose. [Accessed November 29, 2018].

5. Deloitte (2012). Core beliefs and culture: Chairman’s survey findings. Deloitte. Available at: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-core-beliefs-and-culture.pdf. [Accessed November 19, 2018].

6. Culture IQ (2017). 2017 TCC Report: Building a High-Performance Culture: Key Lessons from Top Cultures. Available at: https://go.pardot.com/l/455712/2017-11-23/d2qyhn. [Accessed November 19, 2018].

7. Azzarello, D., Debruyne, F., and Mottura, L. (2012). The Chemistry of Enthusiasm. Bain and Company, May 4, 2012. Available at: https://www.bain.com/insights/the-chemistry-of-enthusiasm. [Accessed November 20, 2018].

8. Gallup (2017). State of the American Workforce 2017 Report. Available at: https://news.gallup.com/reports/178514/state-american-workplace.aspx?g_source=link_NEWSV9&g_medium=TOPIC&g_campaign=item_&g_content=State%2520of%2520the%2520American%2520Workplace. [Accessed November 20, 2018].

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