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Why Culture is Important to Profits and Productivity
Many organizations know intuitively that corporate culture drives employee behavior and company outcomes. As the oft-cited strategy guru Peter Drucker has said, “Culture eats strategy for breakfast.” Researchers such as Professor James Heskett from Harvard Business School have quantified the benefits of effective corporate cultures by measuring its impact on operating profit due to lower employee turnover, which reduces costs in connection with recruiting, hiring, and training, and also improves operational continuity, thus benefiting customer relationships, customer loyalty, enhanced sales and lower marketing costs.
With today’s employee engagement rates hovering around 30% since 2011, according to Gallup research, investing in aligning a company’s mission and values with employee behavior is a timely investment (See our Corporate Culture page for additional details on the theory and practice).
Why Ethical Systems
The Ethical Systems culture measurement tools are a unique online resource specifically vetted through academic channels, including the peer review journal process (for survey questions) and a working group of leading practitioners and academics that Ethical Systems convened to assess the highest quality measures. We are the only collaboration of leading social and behavioral scientists who are among the top experts in the world on designing ethical organizations. By making people and companies aware of mechanisms that impact ethical culture, and how to properly design systems that reinforce positive behavior, Ethical Systems is at once an advocate, partner and facilitator in the success and resiliency of business.
The Ethical Culture Survey module incorporates questions that have been vetted by a working group of academics and practitioners, and pinpoints the most relevant components for concise and constructive feedback to improve the systems that comprise a truly ethical culture in organizations. Further, by comparing results from both executive and management teams, alongside other levels and roles within the company, we can better determine any discrepancies between hierarchical levels and target groups, sections and teams that require additional resources to course correct.
In the coming months we'll be releasing several additional modules, although for now we offer the Ethical Culture module as the solely available tool.
For a company to align its mission and values with employee behavior, it must first begin with an assessment of its culture to identify strengths and areas in need of improvement.
An effective approach must be both inclusive of employees, soliciting their input and participation, and also comprehensive of all formal and informal systems in the organization, write Professors Linda Trevino and Katherine Nelson. For executives can most effectively ensure that their culture is aligned with their company’s values by conducting regular and systemic audits of their organization’s culture. The Ethical Systems survey is one method to assess a firm’s culture
Culture in the News
Corporate culture is increasingly seen by both companies and media as a pivotal area that impacts professional and personal success. Below, we present a selection of recent pieces that emphasize the importance of culture as a lever for improving ethics, reputation and profits:
- The Culture Ate Our Corporate Reputation, Wall Street Journal, October 2016.
- Cultures of Compliance, American Criminal Law Review, September 2016.
- ETSY: A positive culture of negative confessions [Ethical Systems blog]
- The Power of Culture As a Competitive Advantage, Forbes, September 2015.
- The Building Blocks of Business Ethics (includes a ethics checklist for companies to evaluate their culture), Dividend, the magazine of University of Michigan, Ross School of Business, Fall 2015.
- Inside Amazon: Wrestling Big Ideas in a Bruising Workplace, The New York Times, August 15, 2015.
- The value of emotional culture at work [Ethical Systems blog]
- Regulators’ Emphasis on ‘Culture’ Spurs Hunt To Measure It. Wall Street Journal, February 2016.
For more information and to schedule a call to discuss the survey and your company, please email Azish Filabi, Ethical Systems CEO.