How Strong Cultures Help Companies Win Talent — and Customers, Too

Leaders tend to focus on the internal benefits of culture — the ability to retain talent and improve performance.

But the benefits of a strong culture also have huge external benefits, and are the primary driver not only in deciding with whom to do business, but also how long the relationship will last.

These are the findings of Beyond the Brand: Why Business Decision Makers Buy into Strong Cultures, by the Fortune Knowledge Group in collaboration with gyro.

Culture is a powerful differentiator

The study found a majority of executives want to do business with companies that live by their values, and they rely on intangible differentiators (such as culture or reputation) more than quantifiable differentiators as a way of judging potential business partners.

The same attributes are equally likely to make a company desirable to work for as to work with. So here’s what researchers suggest to create a successful culture.

  1. Stand for something — When choosing a corporate partner, 59 percent of executives say that knowing what values a company stands for is much more important than innovation (22 percent) or market dominance (20 percent). “Clear communication of your organization’s purpose provides a bond that increases the brand value with existing and potential customers,” says Bob Aiken, CEO of Essendant.
  2. Live by your mission and share your goals — Tying day-to-day operations back to your “why” is powerful. Some 81 percent of executives feel companies that are successful at building long-term relationships make a direct correlation between what they believe in and the way they conduct their business. And all stakeholders — both internal and external — should have the opportunity to share in its purpose.
  3. Put your culture to work — A strong sense of purpose helps a company attract better quality employees and enables employees to act more collaboratively, both internally and externally. And the benefits extend beyond the walls of the business – 89 percent of respondents agree great companies build cultures that consistently create excellent customer experiences. “If a company isn’t communicating its mission, then it will miss out on the next generation of rising stars, because the best people won’t want to work there,” says Kreg Weigand, VP of Internal Audit at Target. “People have to feel connected to the organization and feel there is a larger purpose overall.”
  4. Be different — Culture is an important factor in building successful long-term relationships, but when corporate ties fray, it won’t be because of cultural differences. Much more damaging is losing trust (72 percent) or internal policies that prevent collaboration (69 percent).

Measuring the benefits of a strong culture

Corporate culture may seem hard to quantify, but it is possible, as Harvard Business School Professor Emeritus James Heskett argues in The Culture Cycle: How to Shape the Unseen Force that Transforms Performance.

“Organizational culture is not a soft concept,” he says. “Its impact on profit can be measured and quantified. Culturally committed employees are more likely to remain in an organization, leading to lower hiring costs, higher productivity, stronger customer loyalty, and better sales.” His research shows that, overall, up to half the difference in operating profit between companies can be attributed to strong cultures.

At a time when trust and reputation are so highly valued, yet in such short supply, companies have a responsibility to consider the best ways to develop strong corporate relationships that will last.

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Leaders need to reprioritize their company’s most important assets to take full account of the human factors that are important for cementing long-term relationships with employees and customers.

The post originally appeared in a somewhat different form on

Michelle M. Smith

Named as one of the Ten Best and Brightest Women in the incentive industry and to the Employee Engagement Power 100 list, a Change Maker, Top Idea Maven, and President’s Award winner, Michelle is a highly accomplished international speaker, author, and strategist on performance improvement. A respected authority on leadership, workplace culture, talent and employee engagement, she’s a trusted advisor to many of the world’s most successful organizations and the governments of the United Kingdom and the United States.

Michelle speaks and writes about what she knows first-hand – as a former executive of a Fortune 100 global conglomerate, and as a researcher and strategist. She passionately shares new insights and tools for leaders to confidently, effectively and strategically lead their organizations to success.

Michelle is the Past President of the FORUM for People Performance at Northwestern University and President Emeritus of the Incentive Marketing Association. Michelle was the Founder and Chair of the Editorial Board of Return on Performance Magazine, and has been featured on Fox Television, the BBC, in Fortune, Business Week, Inc. and other global publications, and contributed to the books Bull Market by Seth Godin, Contented Cows Still Give Better Milk, and Social Media Isn’t Social.