Culture is the new currency – why investing in your company’s culture pays dividends

It is no surprise that in the ever-evolving world of business, there is a never-ending list of topics leaders are expected to tackle: diversity and inclusion, sustainability, work/life balance, hybrid working, and digital transformation, to name a few. As business leaders, we find ourselves juggling external expectations, internal stakeholders, and day-to-day operations. We are no strangers to being asked what the right thing to focus on first should be.

Culture as a competitive advantage

A global report by Heidrick & Struggles, titled: Aligning culture with the bottom line: Putting people first, has found that culture has emerged as a top priority for an increasing number of leaders. Remarkably, in Australia, 92 per cent of chief executives are actively working on cultivating a strong culture, surpassing the global average of 83 per cent. Leaders are seeing tangible results in company performance, and 98 per cent of Australian chief executives agree that a positive company culture has significantly improved retention rates.

Is Australia falling behind?

One report reveals that while 88 per cent of Australian workers stated they feel safe at work, half of them have an eye on the exit door. What they found is that a positive work culture is critical in ensuring people feel happy in their work environment and prefer to stay.

Moreover, our research shows that despite almost all leaders globally (94 per cent) highlighting improved retention rates driven by a focus on culture, only 66 per cent of Australian chief executives believe that connecting culture directly to business strategy is essential for driving financial growth.

Culture is no longer just a buzzword but a business game changer. To shape a culture that will drive financial performance, survey results have shown that improving diversity, equity and inclusion (DEI), increasing employee engagement, and creating stronger alignment with organisational purpose within your company are all excellent starting points.

However, it is important to note that while focusing on culture can result in positive financial gains, this should not be the only driving factor for companies. In fact, the shift towards a better balance in terms of a company’s ways of working and mindsets underlie strong performance. This brings us to the next question – how should leaders elevate their culture?

Core principles of culture shaping

Chief executives seeking to reshape culture must first consider the purpose that drives their leadership and then role model that purpose in everything they do. It requires purposeful leadership – which all comes back to the chief executive or senior leader bringing themselves to the table as an authentic commander who can not only deliver a message but also lead and be a role model for a compelling purpose. Purpose is often regarded as a lofty goal but should instead be pushed out through broad employee engagement and systematic alignment across the company.

Nowadays, the younger generation gravitates towards brands that demonstrate genuine values and a strong purpose; everyone wants to see our businesses being led by genuine chief executives who bring their authentic and sometimes vulnerable selves to the table.

The best leaders acknowledge their blind spots and address them directly. To lead diverse talent, you must first embody the right mindset, and being able to implement personal change shows the true strength of a leader.

Leaders must also create an environment where employees can try, fail, and learn from their experiences. A feeling of empowerment and ownership will enable them to contribute meaningfully to the company’s success. They are then motivated to share their ideas and collaborate, further nurturing an innovative culture.

It takes two to tango

As businesses navigate a dynamic global landscape, the critical role of workplace culture in driving success and financial performance is increasingly evident. Chief executives across industries, and indeed the world, recognise the value of fostering a performance culture that fuels growth, innovation, and collaboration. Leaders must prioritise purpose, engage employees, and nurture a culture that supports their shared goals to stay resilient and thrive in this era.

Gaby Riddington is a partner and Heidrick Consulting lead at Heidrick & Struggles Australia and New Zealand.