On average, over 50% of a company’s market value is now derived from intangible assets, and for some industries that value can be as high as 80%.1 Culture, defined simply as the behavioral patterns of the people of a company, is now measured, managed, and reported on by most leading companies around the world. If culture is behavioral, we can measure and deliberately shift it.
As ongoing crises both necessitate and allow for behaviors to change quickly, culture has become the critical variable in separating good from great companies. In short, when times get tough you either prove what you’re made of and evolve, or you don’t. And today, customers, shareholders, institutional investors and current and prospective employees are all watching more closely.
Most companies have made quick shifts to new ways of working in response to crises, including the COVID-19 pandemic and social movements (most notably, anti-racism). But, many are also at risk of regressing to old ways because today we don’t get to model behaviors and evolve culture as organically as before. It doesn’t happen as naturally; we’re trying to figure out how to lead a distributed culture. Shifting and sustaining changed behaviors takes more deliberate design, practice and measurement when we are not physically together, and technology is mediating our relationships.
Culture can no longer be considered fulfilled by simply stating values and doing an employee engagement survey. Trent Henry, EY Global Vice Chair, Talent states “As the global workforce becomes more distributed post-pandemic, the need for organizations to keep their people and culture both front and center has never been more important."
The challenge with culture has not been one of appreciation that it matters, but one of understanding what it takes to change behavioral patterns and resourcing the shift properly.