Culture Affects Performance: Evidence and what you can do to create a culture that promotes performance.

The heart of every organisation is its culture – a complex network of values, beliefs, and behaviours that influence how work gets done. More than just a passive backdrop, culture stands as the driving force behind performance, shaping outcomes and dictating the pace of growth.

There are numerous studies that cite the link between culture and performance. For example, companies with a positive and inclusive culture are 33% more likely to experience higher-than-average profitability (Hickman & Robison, J, 2020), or companies on their “Best Places to Work” list (which heavily factors in company culture) consistently outperformed the general stock market by nearly 116% from 2009 to 2019 (Chamberlain & Munyikwa, 2020).

What can you do, as a leader, to practically influence culture and therefore performance?

Ownership

One factor to focus on can be your employee’s feeling of ownership. Providing employees with a sense of autonomy (choice, control and freedom), combined with a supportive and safe working environment, not only promotes empowered employees but also instils a sense of ownership over roles and tasks. This deeper sense of responsibility and engagement can lead directly to enhanced individual and organisational performance (Jogannsen & Zak, 2020).

Climate

Another is to focus on crafting the right ‘Climate’ within teams to create the conditions for high performance to occur. Climate is distinct from culture and reflects the ‘mood’ or atmosphere at an individual team level.  It is heavily influenced by the leader of a team and can differ significantly throughout an organisation.

Using the ‘Performance Climate System’ model, the factors driving Climate can be grouped into two categories, Transactional and Transformational. Transactional conditions include goals, roles and processes and transformational conditions include resilience, connection and adaptability. Transactional conditions are the foundations your employees need to function, and transformational conditions are what is needed to thrive.

A team’s performance is flexible and often influenced by the conditions in which they work. As a leader, you can play a crucial role in shaping a team’s performance by crafting an environment with both the right transactional and transformational conditions.

When you combine a sense of ownership with the right conditions for high performance, alongside having the right people in your business, you maximise the potential for performance.

As a leader, do you know if you have the right conditions in your workplace to enable success and high performance?

At Tribus People, we utilise proven diagnostic tools and data that can help you understand where your Climate is today, where you need to be and the specific actions you can take to create high performance and success.

Speak with us today to find out more.

Reference List

Chamberlain, A. and Munyikwa, Z., 2020. What’s Culture Worth?

Hickman, A. and Robison, J., 2020. Is working remotely effective? Gallup research says yes. Gallup Research.

Jogannsen, R. and Zak, P., 2020. Autonomy Raises Productivity: An Experiment Measuring Neurophysiology.