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Cultures of success

Clocktower.

Brendan GrayProfessor Brendan Gray
His research shows successful organisations are committed to staff engagement, customer satisfaction, teamwork, quality and innovation.

For about 10 years Professor Brendan Gray has been studying what makes successful organisational or corporate cultures.

This long-term longitudinal study has produced some interesting conclusions, says Gray, who holds the Dunedin City Chair in Entrepreneurship at the University's School of Business. During the study, it became apparent that there were wider organisational values and practices underlying many strategies and activities of successful firms.

"So that made us look more broadly at organisational culture, to see if we could identify common ingredients that made up what we termed 'cultures of success'," says Gray.

About 40 firms in the professional and business services sectors – engineering, accounting and finance, law, information technology, communications and distribution – were involved in the study and a number of themes emerged that were common to successful corporate cultures. Often they focused on their communities, engendering a strong sense of customer trust: for example, by being good corporate citizens (socially and environmentally responsible).

Most successful organisations had clearly defined their missions, visions and specific goals, and encouraged a high degree of staff buy-in to the overarching strategies and practices to enable effective implementation. This was achieved in a number of ways, such as involving staff at various levels in developing strategies, rather than imposing them, and educating staff and managers to appreciate the importance of being market-oriented, creative and focused on finding new ways of solving existing customer or business management problems.

One of the most important values was a strong focus on customer satisfaction and research to check that the firm was delivering customers' required benefits; that this raised levels of customer satisfaction and loyalty, and ensured that feedback was acted on in a timely manner. Gray says another key aspect of successful firms was that they tried to "stretch" their employees, giving them challenges to improve their practices and their relations with customers, suppliers, distributors and their wider communities.

This kind of challenge motivated people to do things in innovative, creative and more effective ways.

And there was a strong emphasis on teamwork, often through assembling cross-functional teams from different parts of the organisation to solve problems.

Other key characteristics of successful cultures included an emphasis on quality, ensuring this through practices such as regular staff and customer audits and quality controls, and having supportive atmospheres that encouraged a holistic approach and a healthy work/life balance.

The study suggests a culture emphasising innovation is crucial to long-term success, mainly because technologies – along with marketing campaigns and pricing strategies – are not only changing rapidly, but can be copied quickly. Companies continually had to re-invent themselves to stay ahead, and sought ideas for improvement from customers, suppliers, distributors and staff. They researched the effectiveness of the best ideas, priced them accordingly and then promoted them in an integrated way.

Intriguingly, most higher- and lower-performing firms in the study appeared (on the surface, at least) to have similar management and marketing practices. However, by digging deeper into the case studies some crucial differences were revealed. In particular, the top performers had a greater commitment to their internal and external strategies and practices, and they employed more sophisticated techniques to ensure their organisations delivered superior value.

Funding

  • Foundation for Research, Science and Technology