at your best newsletter

The Culture Cycle: How to shape the unseen force that transforms performance

Senn Delaney is pleased to provide an exclusive chapter excerpt from James Heskett's new book

Today's leaders are under intense pressure to maximize performance and demonstrate success in quantifiable, measurable and sustainable ways. From more than 30 years of research and working with organizations around the globe, Senn Delaney has proven that creating thriving, high-performance cultures is not merely a soft people strategy, but one of the most critical drivers of performance in the most successful companies.

Many studies demonstrate this link between culture and performance, but now, there is even more definitive proof from one of the most renowned researchers, authors and thought leaders on organizational management and culture. “In many organizations, culture is the most potent and hard-to-replicate source of competitive advantage, states James L. Heskett in his new book, The Culture Cycle: How to shape the unseen force that transforms performance.

Heskett demonstrates that developing an effective culture can account for up to half of the difference in operating income between two organizations in the same business. "Organization culture is not a soft concept. Its impact on profit is significant and can be measured and quantified,” he writes.

Senn Delaney is pleased to share an exclusive chapter excerpt from the book, Chapter 6: Measuring Effectiveness.
Download excerpt

Heskett provides a compelling case for the economic value of an effective organizational culture that he bases on four important sources of cultural competitive advantage — the “Four Rs” — of referrals and retention of employees, returns to labor, and relationships with customers that foster customer referrals and retention.

He finds that as much as half of the difference in operating profit between organizations can be attributed to effective cultures. Why? "We know, for example, that engaged managers and employees are much more likely to remain in an organization, leading directly to fewer hires from outside the organization," Heskett writes in the book. "This, in turn, results in lower wage costs for talent; lower recruiting, hiring, and training costs; and higher productivity (fewer lost sales and higher sales per employee). Higher employee continuity leads to better customer relationships that contribute to greater customer loyalty, lower marketing costs, and enhanced sales."

We highly recommend this book as reading for any leaders considering leading a culture transformation in their organizations.
Purchase the book at Amazon.com

Manage the culture cycle

We are also pleased to share an article by Heskett, Manage the Culture Cycle, that was published in The World Financial Review September/October 2011 edition. It distills a number of key points Heskett makes in his book, spelling out the economic advantages of an effective culture.

He notes that culture is shaped and tracked by numbers — just not the financial numbers, but that running an organization on financial numbers alone is like driving while looking in the rearview mirror. Heskett warns that organizations that wait for a significant downturn in their financial measures, such as growth and profit, to signal the need for change are doomed to fail because the Four Rs of competitive advantage in organizational cultures — retention, referrals, returns to labor and relations with customers — will have declined long before financial results begin to show it.

Download article

View article online