1 The Benefits of a Constructive Culture Compiled by: Janet L. Szumal, Ph.D. and Cheryl A. Boglarsky, Ph.D. Copyright © 2011 by Human Synergistics International

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The Benefits of a Constructive Culture

Compiled by:

Janet L. Szumal, Ph.D. and

Cheryl A. Boglarsky, Ph.D.

Copyright © 2011 by Human Synergistics International. Research and development by R. A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D.

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Organizational Culture is an Organizational Imperative

Culture needs to be the top priority of top executives because—

regardless of whether they pay attention to it—culture exists and

affects everything that matters most to the organization and its

stakeholders.

Janet L. Szumal, Ph.D.

Human Synergistics/Center for Applied Research, Inc.



I.Better financial performance

II.Positive customer experience

III.Greater employee engagement

IV.Higher levels of productivity

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In a study of 69 companies across a variety of industries…

Profitability (Over 3 Year Period)1

Strength of Cultural Norms2

Earnings/Sales Ratio (n=69)

Earning/Sales Volatility (n=60)

Constructive + 0

Passive/Defensive 0 0

Aggressive/Defensive 0 +++/- signifies positive or negative correlation significant at p<.05.++/-- signifies positive or negative correlation significant at p<.01.0 signifies relationship is not statistically significant.

1Financial data for the three-year period provided by Towers Perrin for 69 companies in various industries. Ratios are averages for the three-year period; volatility scores are standard deviations. 2Organizational culture data provided by Human Synergistics, based on factor scores.

Research conducted by Robert A. Cooke, Ph.D. Copyright © 2003 by Human Synergistics International.

…there were positive correlations between Constructive cultures and profitability and Aggressive/Defensive cultures and sales volatility.

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In a study of 79 newspapers…

Strength of Cultural Norms1 Profit2

Constructive +

Passive/Defensive 0

Aggressive/Defensive 0

N=79 newspapers; one-tailed correlations with list-wise deletion.

+ signifies positive correlation significant at p<.05.0 signifies relationship is not statistically significant.

1Organizational culture measured by Organizational Culture Inventory®, based on factor scores.

2Regression residual of profit not explained by revenue and circulation strata.

Analyses by Robert A. Cooke, Ph.D. Copyright © 2003 by Human Synergistics International.

…there was a positive correlation between Constructive cultures and profitability.

From Martin I. Klein, Corporate culture and store performance: Differences among high and low performance stores, Ph.D. Dissertation. Philadelphia: Temple University.

High Sales Growth No Sales Growth

Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2011 by Human Synergistics International. All Rights Reserved. 7

Constructive cultures are stronger in stores with high sales growth than those with no growth

Constructive cultures matter

Improved culture and financial performance at Ohio State Medical Center

Culture in 2000 Culture in 2003“I have worked with the Organizational

Culture Inventory® from Human

Synergistics for many years and have

found it to be an extremely effective

tool for measuring, monitoring, and

changing culture.”

Fred Sanfilippo, MD, Ph.D. Senior Vice President and Executive Dean for Health Sciences Dean, College of Medicine CEO, The Ohio State University Medical Center

From Optimizing Human Performance in the Health Care Industry. www.humansynergistics.com. Copyright © Human Synergistics International.

Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2011 by Human Synergistics International. All Rights Reserved.


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Improved culture and financial performance at Lion Nathan

1998 2000 20021996 2004

Net Profit After Taxes in Millions of Australian $

70

90

110

130

150

170

190

210

230

1996 1997 1998 1999 2000 2001 2002 2003 2004

From Q. Jones et al. (2006). In great company. Human Synergistics New Zealand.



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Constructive Cultures Matter

Better Financial Performance

Does your organization have a Constructive Culture?





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In a study of over 280 units from a variety of organizations and industries…

Product/Service Quality1


Department Quality (n=321)

Organizational Quality (n=287)

Constructive ++ ++

Passive/Defensive -- --

Aggressive/Defensive -- -Zero-order correlations conducted at unit-level.

+/- signifies significant correlation at p<05.

++/-- signifies significant correlation at p<.001.

1Data on quality based on Human Synergistics’ Organizational Effectiveness Inventory®. 2Organizational culture data provided by Human Synergistics, based on factor scores.

From Janet L. Szumal, Reliability and validity of the OEI. Copyright © 2001 by Human Synergistics International...

…there was a positive correlation between Constructive cultures and service quality and negative correlations between both Passive/Defensive and Aggressive/Defensive cultures and customer satisfaction.

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Constructive cultures translate into constructive customer service styles…

…which have a positive impact on customer satisfaction, loyalty, and advocacy.Customer data on service styles and satisfaction, loyalty, and advocacy from Customer ServiceStyles™ Feedback Report.


Constructive styles matter

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In a study of 79 newspapers…

Strength of Cultural Norms1 Readership2

Customer Satisfaction2

Constructive + 0

Passive/Defensive 0 0

Aggressive/Defensive 0 --N=79 newspapers; one-tailed correlations with list-wise deletion.

+/- signifies positive or negative correlation significant at p<.05.++/--signifies positive or negative correlations significant at p<.01.0 signifies relationship is not statistically significant.

1Organizational culture measured by Organizational Culture Inventory®, based on factor scores.

2Based on surveys of newspaper readers carried out by the Readership Institute (Northwestern University).

Analyses by Robert A. Cooke, Ph.D. Copyright © 2003 by Human Synergistics International.

…there was a positive correlation between Constructive cultures and readership and a negative correlation between Aggressive/Defensive cultures and customer satisfaction.

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BetterFinancial Performance


Positive Customer Experience






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In a study of over 290 units from a variety of organizations and industries…

Commonly Used Indicators of Engagement1


Employee Satisfaction

(n=291)

Employee Motivation

(n=320)

Intention to Stay

(n=463)

Constructive + + +

Passive/Defensive - - -

Aggressive/Defensive - - -Zero-order correlations conducted at unit-level. All correlations significant at p<.001.

1Data on employee engagement based on Organizational Effectiveness Inventory®..2Data on culture based on Organizational Culture Inventory®.

From Janet L. Szumal, Reliability and validity of the OEI. Copyright © 2001 by Human Synergistics International.

…there was a positive correlation between Constructive cultures and commonly used employee engagement indicators.

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One health care organization found that Constructive teams had high levels of employee satisfaction

High Satisfaction Teams Low Satisfaction Teams


After this measurement, the low satisfaction teams

embarked on a culture change journey. Recent

measurements show these teams moving

toward achieving high employee satisfaction.


Companies selected from Canada’s “Top 100 Employers,” “50 Best Managed Companies,” and Hewitt Associates “Top 50”Research conducted and published by First Light PMV. Report available at: http://www.hscanada.com/FirstLightstudyonBestCompaniesinCanada.pdf


The “Best of the Best” companies in Canada have Constructive cultures

Current Culture Profile (Composite)n=882 members from 43 of Canada’s

“Best” OrganizationsConstructive

cultures matter

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Better Financial Performance



GreaterEmployee Engagement






IV.Higher levels of productivity

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Constructive cultures are stronger in the Department of Defense’s top performing units than its average units

Top PerformersAverage Performers

Culture profiles of units within the U.S. Department of Defense during Operation Desert Shield.From Janet. L Szumal, Organizational Culture Inventory Interpretation and Development Guide.

Copyright © 2003 by Human Synergistics International.


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The most effective and successful leaders drive Constructive cultures

Impact of the Most Effective and Successful Leaders*

Impact of the Least Effective and Successful Leaders*



*Top 10% versus bottom 10% of leaders within major corporation. Leaders’ impact on culture measured using Leadership/Impact®; effectiveness based on ratings by superiors, peers and direct reports; and success based on performance-based salary increases over time.

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BetterFinancial Performance



GreaterEmployee Engagement

HigherProductivity


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What is a Constructive Culture?


Constructive Cultural Norms

Achievement (11:00)

Self-Actualizing (12:00)

Humanistic-Encouraging (1:00)

Affiliative (2:00)


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Culture happens. Leaders and managers can let it happen or they can manage what happens. It is a choice.


Documents

1 The Benefits of a Constructive Culture Compiled by: Janet L. Szumal, Ph.D. and Cheryl A. Boglarsky, Ph.D. Copyright © 2011 by Human Synergistics International