New CEO Study Describes "Culture" as Fundamental to Success
This new unpublished study provides insights into organizational success.
Posted November 2, 2019 | Reviewed by Lybi Ma
Jason Korman is the CEO of Gapingvoid, an innovative Culture Design firm that works with organizations like the United States Airforce, Microsoft, large universities including Yale, and others.
They have very unique perspectives and methodologies to design and shape organizational culture. From their perspective, culture is the "operating system" upon which everything else can function.
Korman recently conducted a study among CEO's of large corporations, trying to find more answers about what leads to organizational outcomes. That study remains unpublished. However, I was able to read it and found it to be intriguing.
In this short article, I'm going to explain a core concept for creating what Korman calls a High-Purpose Culture. This is key for leading people and getting them to go in the same direction.
"Purpose" Is Key To Culture
“Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders. Purpose is not the sole pursuit of profits but the animating force for achieving them.”–Larry Fink
A core finding of Korman's study was that High-Purpose Cultures are at once employee- and customer-focused. They’re well defined and make clear exactly what the organization stands for. Organizations that engage employees consciously through a High-Purpose Culture system realize:
- Higher financial returns
- Better customer satisfaction scores
- Increased employee retention
- Greater innovation
- Greater competitive advantage
Moreover, CEOs of High-Purpose Culture companies personally achieve:
- Higher compensation
- Greater number of positive media mentions
- Increased respect in their industry, communities and by employees as indicated by their presence atop “Most Admired CEOs” lists
Purpose is the goal to which the organization is trying to accomplish. The goal shapes the identity of the organization. That identity is manifested through culture. It is the culture of the organization that moves the organization in the direction of the goal.
Without a clear purpose, there cannot be a designed culture. Sure, a culture of some sort will begin forming. But it will not likely be an effective culture.
According to Korman, culture is a set of beliefs, attitudes, behaviors, and norms which create outcomes. CEO's who understand culture use their influence to create a purpose-driven culture wherein the identities of employees and clients are aligned with the purpose of the organization as a whole.
That's what transformational leadership is all about, really, getting the individuals and group as a whole to commit to a higher vision and shared purpose.
Without purpose, you cannot have a clear culture. Without a clear culture, you cannot create the results you're looking for. Instead, as an organization and individuals within, you'll have identity confusion.
Louis Gerstner, the former Chairman and CEO of IBM responsible for its legendary turnaround, wrote the following in his book Who Says Elephants Can’t Dance:
“Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization's makeup and success —along with vision, strategy, marketing, financials, and the like. I came to see, in my time at IBM, that culture isn't just one aspect of the game; it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”
The data from Korman's shows that a company’s culture is its competitive differentiator. Culture is not just the brand but is the ultimate differentiator from your competitive set. Culture drives operations, profitability, awareness, and influence that is acknowledged in and outside of the business. As Zappos CEO Tony Hsieh said:
“At Zappos, we really view culture as our number one priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.”
Motivation Demands Purpose
Without a clear purpose, you're not going to be able to create a High-Purpose Culture™. Without a purposeful and purpose-driven culture, your employees (and fans) will not be able to clearly identify, and orient their identity toward, your vision.
Vision is essential.
Vision shapes the process, systems, norms, and even the specific "values" agreed-upon of an organization.
There's another reason "vision" or "purpose" is fundamental to leading and getting the most out of your employees, and it's motivation. According to Expectancy Theory, in order to be motivated a person needs three things:
- A compelling and clear outcome
- A path, plan, and or strategy for getting that outcome
- Confidence in their own capability to do what it takes
Put simply, without a clear goal to aspire toward, and knowledge about how to get that goal, a person won't be very motivated. They also won't feel very confident.
Transformational leadership is about helping people see and embrace a specific vision. Then, helping each individual understand how their particular role is fundamental in the creation of that vision. Leadership is about removing complexity and ambiguity. So a good leader will encourage their employees to take ownership and develop the skills and know-how to execute on their responsibilities relevant to the micro and the macro of the vision.
The more clear someone can see the vision, and their personal path, as well as the organization's path as a whole, to getting there, the more motivated and confident they will feel.
There is much more to Korman's unpublished study and CEO report that is interesting and illuminating.
For now, it's safe to say that "culture" should be high-purpose, intentional, and designed. Culture is fundamental to organizational success. Purpose is the driver of culture, and culture is the driver of organizational outcomes, including the long-term success of the CEO.
Bryant, Adam”On a Scale of 1 to10, How Weird Are You?” New York Times. January 9, 2010. 31 Retrieved at https://www.nytimes.com/2010/01/10/business/10corner.html
Fink, Larry. “Larry Fink’s 2019 Letter to CEOs. Purpose & Profit.” Retrieved from https:// 3 www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter
Gerstner, Louis V. Jr. “Who Says Elephants Can’t Dance?” 2002. Harper Business.
Heneman, H. G., & Schwab, D. P. (1972). Evaluation of research on expectancy theory predictions of employee performance. Psychological Bulletin, 78(1), 1.