Dive Brief:
- CEOs are increasingly focusing on culture to achieve specific business outcomes; those who do are overwhelmingly seeing positive results, according to a Spring 2023 survey of 500 CEOs across the globe by advisory firm Heidrick & Struggles. This year, 71% of CEOs see culture as a key driver of financial performance, 44 percentage points higher than two years ago, the survey found.
- Since 2021, CEOs across all industries have shifted their view of culture and the bottom line considerably in a number of ways, the survey showed. More than half (54%) say their main reason for focusing on culture is to bolster employee engagement, compared to 26% two years ago; increasing innovation and improving diversity and inclusion are also top reasons. In addition, almost 7 in 10 CEOs (up from 37% two years ago) recognize that providing employees with direction and purpose — why people show up — is a critical element of culture for driving financial performance. CEOs also cited agility, innovation and growth mindset (57%) and positive spirit and vitality (46%) as key elements.
- Nearly all of the CEOs who responded to the survey noted that by strategically focusing on employee mindset and behavior, they significantly improved their employee retention rates or made some positive difference. “These drivers highlight a growing emphasis on employees and the way they work together — demonstrating that CEOs are taking a people-centric approach,” Heidrick stated in a July 26 media release announcing the survey results.
Dive Insight:
As a growing number of CEOs recognize the impact it has on company performance, culture has clearly become “more than a buzzword,” Heidrick emphasized in the release.
The shift is also in line with what job seekers and employees are saying they want, according to recent studies. LinkedIn data released in June showed that job posts citing flexibility, well-being and company culture get nearly three times more views and twice as many applications as they did two years ago.
In addition, with more companies mandating on-site work — potentially hurting employee retention, according to a June Conference Board report — it’s critical for HR and corporate leaders to align employee mindsets and behavior with the organization’s business goals, the Heidrick survey indicates.
Companies have to be thoughtful about why they’re asking people to return to the office and must make it a place where employees can do their best work, a Conference Board exec explained in June.
Supportive environments also benefit remote work arrangements, research by the Georgia Institute of Technology released last month showed.
Cultural aspects matter most, a researcher pointed out: The strongest remote workplaces are at companies that cater to employees’ interests, give them independence and foster collaboration, the research found.
Diversity and inclusion, one of the top three reasons CEOs told Heidrick they’re focusing on culture, is another key driver of retention, according to a survey published in January by QuestionPro and EQ Community.
Nearly 40% of the 1,000 employees surveyed nationally said they’d switch jobs for a more inclusive culture. Executives can address their concerns by preparing a strong onboarding experience, trying different initiatives tied to the organization’s goals and leading by example, the report recommended.
