Investing In Culture: Does It Deliver Value?

The concept of “corporate culture” has often been a paradoxical experience for me. On the one hand, it has always interested me, and I have spent many an hour researching how it can enhance organizational effectiveness. On the other hand, it has been the most difficult concept to discuss with clients heading important functions such as operations or supply chain, because many believe that it is an important “HR” function driven by leadership.

However, as per the Innovation 1000 Study conducted by Booz & Company in 2011, the success of a company (or a function within a company) is not a matter of how much these companies spend on research and development, but rather how they spend it. This study took into consideration two particular qualities:

• Strategic alignment and
• a culture that supports innovation that truly innovative companies have put in place that allow them to outperform the competition.

As per this study, culture is key to innovation success, and its impact on performance is measurable. Specifically, the 44 percent of companies who reported that their innovation strategies are clearly aligned with their business goals (and that their cultures strongly support those innovation goals) delivered 33 percent higher enterprise value growth and 17 percent higher profit growth on five-year measures than those lacking such tight alignment.

This report is a must-read for business leaders across industries. For more information, read the report in its entirety here. 

-Anjali Pais