February 16, 2023

Culture Fitness: Healthy Habits of High-Performance Organizations

The Next Practices Weekly call series has become a well-attended and wide-ranging discussion for HR leaders each Thursday at 11am ET / 8am PT. On this week's call, i4cp' s CEO and Co-Founder, Kevin Oakes, and i4cp Senior Research Analyst, Katheryn Brekken, presented findings from, and facilitated a discussion about, i4cp's latest major study, Culture Fitness. Here are some highlights from the call:

  • The Fitter the Culture, the Better the Performance. The headline finding is that high-performance organizations are nearly 6x more likely to have fit cultures compared to low-performance organizations.
  • Fit Culture Defined. A culture that employees rated as very healthy (compared to somewhat healthy, somewhat toxic, or very toxic), and one which they commonly described using these six traits: Employee-Focused, Inclusive, Quality, Learning, Innovative, Collaborative.
  • Culture Impacts Productivity. Culture fitness explained nearly 20% of the variation among organizations’ employee productivity over the past two years (controlling for size and market performance.)
  • The Unfortunate Reality. More than a third of large organizations surveyed (34%) report becoming more toxic in the past two years.
  • Toxic Cultures During the Pandemic. During the pandemic, organizations with toxic cultures were far more likely to struggle with...
    • Disrespectful behavior
    • Senior leaders who don’t trust employees
    • Employees who don’t trust senior leaders
    • Leaders favoring on-site vs. remote employees
    • Unsafe environments for expressing opinions/concerns
    • Bullying
    • Pay inequity
    • Lack of recognition
    • Lack of inclusiveness
  • More Data on Toxic Cultures.
    • Those who described their organizations’ cultures as toxic were 16x more likely to indicate "lack of trust in senior leaders" as an issue that needs to be addressed.
    • They were also 10x more likely to indicate an "unsafe environment for expressing opinions or concerns" as a top issue in their organizations.
    • Poor behavior is often overlooked during talent decisions. Leaders in organizations with toxic  cultures were 4 to 5x more likely to be described as disregarding poor behavior when making decisions about advancement, compensation, succession planning, performance rating, awards and recognition, and high-potential employee designations.
  • Not All Cultures Suffered During the Pandemic. 43% of companies reported their culture became healthier during the pandemic.
  • The Seven Habits of Very Healthy Cultures. These are:
    • More flexible work arrangements
    • A learning mindset
    • Boards care about culture
    • Leaders lead by example
    • Leaders held accountable for employee outcomes
    • Leaders regularly communicate values
    • Poor behavior is addressed immediately
  • During the call we asked the following participant poll: "What Culture Type is your organization?" (Select all that apply)
    • 54% Customer-focused
    • 48% Purpose/Mission
    • 38% Collaborative
    • 34% Performance
    • 21% Learning
    • 19% Inclusive
    • 18% Innovative
    • 16% Safety
    • 16% Agile
    • 16% Quality
  • Maximal Flexibility. Organizations that have workforces that are currently mostly remote are more likely to report having:
    • A healthier culture
    • Culture improvement in the past two years
    • Increased employee well-being in the past two years
  • Cultures of Learning are Healthy Cultures. These are common traits of strong learning cultures:
    • Knowledge sharing is common amongst workforce
    • Senior leaders & front-line leaders are trained on the desired behaviors
    • Internal mobility is formalized
    • A talent marketplace is in place
  • Leaders are the Lynchpin. Very healthy cultures have leaders who:
    • Lead by example
    • Are held accountable for employee outcomes
    • Regularly communicate values
    • Address poor behavior immediately
  • Fit Cultures Constantly Monitor Progress. Organizations that use these methods to measure tend to have healthier cultures:
    • Culture Audits
    • Stay Interviews
    • Customer Feedback
    • Listening Sessions

Links to resources shared on the call: