How to Build Work Cultures That Drive Business Success

Dr. Jessica Kriegel knows work culture. After all, she is the Chief Scientist of Workplace Culture for Culture Partners, leading research and strategy in best practices for driving results through culture. Jessica and her research have frequently been featured on CNN, CNBC, and The Wall Street Journal.

Jessica’s journey into the world of workplace culture began with her personal experience as a millennial in the tech industry. A pivotal moment in her career occurred when she received vague and demoralizing feedback from her boss. That interaction sparked her determination to understand and challenge generational workplace dynamics. Her research-driven approach led her to dismantle these stereotypes and opened the door to her career as a thought leader. And now, she has a lot to say about building work cultures that drive real business results.

Many CEOs believe that organizations must pick between prioritizing profitability and prioritizing their people. It’s seen as an inherent tradeoff: invest in customers OR employees, but not both. However, Jessica has proven that doing both simultaneously is possible. Because, in her words, “When people care, people succeed.” When organizations have people invested in the mission and purpose behind the organization, they will go above and beyond to help that business succeed.

What is “Good Work Culture”?

There are a wide variety of definitions of what “good work culture” entails. Culture is often described as “the way we do things around here.” But according to Jessica, the truth is that “the way we do things” doesn’t even come close to encapsulating a good workplace culture. A myth persists that culture is synonymous with “perks,” such as nap pods, kombucha on tap, or unlimited snacks.  This is incorrect, in her view.

“Good” culture is something more profound and comes from when people genuinely care about their work. It’s a culture where individuals are deeply invested in their roles, driven by a sense of purpose and a desire to contribute. But how does one operationalize, measure, and scale this set of desired behaviors?

Well, an equation exists that, when applied intentionally, can build a culture that recruits, retains, inspires employees, and drives profitability. Jessica calls this “The Culture Equation.”

The Culture Equation

The Culture Equation is Organizational Purpose + Strategy, powered by Culture. Purpose represents the “why,” Strategy represents the “how,” and Culture equals “the results/outcomes” in this equation.

Today, a disconnect exists between where leaders generally invest their time and the areas that they believe truly impact business results. A recent Culture Partners study found that when 30,000 leaders were asked to identify where they dedicate the majority of their efforts to improve business outcomes, 74% of leaders said they tended to focus on strategy, with only 26% acknowledged the importance of work culture. However, when the same leaders were questioned about what holds the most impact on business results, the leading answer was culture. In fact, 96% of leaders recognized the importance of culture on business results. 

This contradiction between where leaders invest most of their time and what they actually perceive as moving the needle on business results sheds light on a harsh reality: even the most brilliant strategy remains nothing more than ink on paper without a thriving culture to breathe life into it. Additionally, many leaders are unsure if their employees are even aware of the company’s strategy. This poses a significant challenge.

In a study conducted by Stanford University, 243 companies spanning diverse sizes and industries were analyzed. The research delved into their financial records, culture, strategic plans, and mission statements. With a specific focus on a three-year period covering the onset of the COVID-19 pandemic and subsequent years, the research sought to uncover which factors had the most significant impact on revenue growth.

The most compelling insight to emerge from the Stanford research is the power of organizational alignment. Companies that successfully align their purpose, strategy, and culture are the ones that experience the most substantial revenue growth. This leads to Jessica Kriegel’s Culture Equation.

Purpose + strategy, powered by culture = results.

The three elements that play a role in The Culture Equation (purpose, strategy, and culture) are all equally vital. In the same Stanford research study mentioned above, it was found that companies lacking alignment in these three critical areas saw their revenue increase by only 10.7% over the duration of the study. Compare this growth to that of organizations that managed to align their purpose, strategy, and culture. During the same time period, the revenue of these organizations grew by a staggering 44.5% – a 4x increase. 

So how can organizations actually use TheCulture Equation to power their businesses and drive profitability? To find this, let’s take a look at each part of the equation.

Purpose

Purpose is a word often thrown around in the world of business. But do we truly understand its significance within work culture?

An organizational purpose guides a company’s journey, providing direction to its mission. Furthermore, a well-defined purpose resonates with both customers and employees, fostering trust and loyalty while setting the stage for long-term success.

Purpose alignment between employees and the organization is even more potent than “culture alignment.” Culture alignment can sometimes devolve into a quest for fitting in, while purpose alignment unites individuals through a shared passion to create a meaningful impact.

Strategy

In the realm of business, the term “strategy” often takes center stage. Too often, even in larger companies, the strategic plan exists primarily in the minds of executives and is not shared across the organization. This lack of a written-down strategy can lead to confusion and misalignment among team members. The Culture Equation Model, designed to provide clarity to organizational strategy, can help rectify this.

To start codifying an organizational strategy, organizations must consider the following questions:

• Why does your organization exist?
• Where is your organization going?
• What are your long-term priorities?
• How will you measure success?
• What shifts are needed for your success?

Once an organization determines what shifts are needed to ensure future success, they have arrived at its strategic anchors. Strategic anchors are the strategic bets that an organization’s leadership team believes will lead to success in achieving the organizational vision. To drive the most impact, these strategic anchors must be aligned with the company’s purpose.

Once set, strategic anchors must be assigned measurable results. These are the indicators that determine whether your strategic anchors are on course to reach your long-term goals. Clarity is crucial here—your key results must be meaningful, measurable, and memorable.

Lastly, what ultimately ties an organization’s strategy together are cultural beliefs—the “how” behind the company’s purpose and strategy. These beliefs define the behaviors, norms, and the way things happen within an organization. Is it a cutthroat, hyper-competitive environment, or is it one characterized by collaboration, empathy, and mutual support? Cultural beliefs not only shape the company’s internal dynamics but also influence how it drives the organization’s overall success.

Results

Culture amplifies an organization’s purpose and strategy. But it’s important to remember that results are the ultimate objective of the Culture Equation. C-Suite and leaders constantly strive for results, whether that means boosting customer satisfaction, retaining top talent, increasing revenue, or achieving competitive differentiation. But while actions like restructuring, strategic planning, and hiring are important, they’re only part of the equation. To truly transform culture, an organization must also focus on influencing the way people think. 

The Results Pyramid

To support this, Jessica recommends adopting a model called the “Results Pyramid” that simplifies the complex process of influencing how people think and act within an organization to achieve transformative results.

The Results Pyramid represents the interplay between results, actions, beliefs, and experiences that shape our behavior.

Peak of the Pyramid: Results

At the top of the Results Pyramid stand “results.” In the context of business, results are the ultimate purpose, whether it’s achieving a financial target or realizing a strategic goal. However, many organizations fall into the “action trap,” where they solely focus on actions to achieve desired results.

The Action Trap

The action trap is a cycle of relentless actions followed by result evaluation, leading to a never-ending loop of trying to do more to achieve better outcomes. This approach often leads to micromanagement and burnout, with employees feeling disconnected from their work.

The Power of Beliefs

To break free from the action trap, organizations must delve deeper into the pyramid to understand the driving force behind actions: beliefs. A person’s beliefs about work, colleagues, and themselves influence their actions.

But where do beliefs come from? Well, beliefs are shaped by experiences. A person’s experiences, especially during formative years, shape their beliefs about the world. This is why it is essential that employers craft intentional experiences for employees that influence positive beliefs. Three examples of how employers can influence positive beliefs include:

1. Storytelling: Stories have the power to change beliefs. By sharing narratives that connect actions to results and beliefs, organizations can inspire employees to care deeply about their work.
2. Feedback: Providing feedback that links actions to beliefs and desired results creates a culture of continuous improvement. Specific, meaningful, and timely feedback is the key to nurturing positive beliefs.
3. Recognition: Recognition is an effective way for employers to reinforce positive beliefs and behaviors. It involves acknowledging employee actions that align with desired results and cultural values.

Building Work Culture That Supports Company Strategy

When the entire organization understands the company strategy and works within a culture that empowers them to perform, it creates alignment. When team members feel both aligned and empowered, they do more than just show up – they perform at peak levels. Doing purpose-driven work and excelling at that work generates joy, fulfillment, pride and a sense of belonging that positively impacts employee retention. It also makes recruiting easier. After all, who wouldn’t want to work at a company full of passionate rockstars? Companies who master these steps find themselves performing better than their peers. In fact, the data shows that companies who master The Culture Equation drive 5x profitability compared to those who don’t.

So why isn’t every company following this equation, if the reward is so great? Well, changing an organization’s purpose is relatively easy. Even changing the strategy is straightforward. But changing the very culture of an organization? Fighting against entrenched ideas of “this is how we’ve always done things”? Well, that’s the hard part.

Learn more

Interested in more of Dr. Jessica Kriegel’s philosophy? Watch the on-demand Work Culture Webinar with Jessica, where she presents the research, dives into the equation, and provides more real-world examples.