Companies With Best-In-Class Cultures Prioritize Leadership and Mindset Development and DEI

  • Organizational culture plays a major role in employee engagement and retention and the company’s success. Hence, it is crucial to develop an effective corporate culture.
  • To shed better light on the relationship between organizational culture and success, Arbinger Institute and Ascend2 conducted a study. Here are a few insights from the study.

Workplace culture is vital in attracting, engaging, and retaining valuable talent. According to an MIT Sloan Management ReviewOpens a new window study, toxic work culture is 10.4 times more likely than compensation to contribute to an employee leaving. It also plays a vital role in a company’s success. With significant turbulence in the work landscape over the past few years due to factors like COVID-19 and the current economic upheaval, the need for people-centric and effective company culture has become greater.

To shed better light on the relationship between organizational culture and success, Arbinger Institute and Ascend2 surveyed over 300 executives and decision-makers. The study highlights the benefits of a high-performance culture, the obstacles to achieving it, the role leadership development, equity, and other factors play in strengthening it, and how mindset influences cultural outcomes. The following are a few insights.

See more: 7 Tips for Building a Strong Culture as a Small Business Owner

Improved Productivity and Retention Are the Top Benefits of Improved Culture

Companies are more aware of the importance of a high-performance culture today. In fact, 99% of the respondents agreed it was important to achieving business goals like growth and revenue. About 46% said that culture drives improvements in crucial areas such as employee productivity, retention, and engagement.

Greatest Benefits of Improving Organization Culture

Source: High-Performance Culture ReportOpens a new window

Respondents who say performance management initiatives are a high priority in their companies are significantly more likely than others to report that employee productivity is very successful or best-in-class (70% vs. 30%). Further, 42% say that employees in their company feel genuine respect for each other. This group is more than 50% more likely to report best-in-class success in employee retention than those who don’t work for companies where employees feel respected.

While great company culture has benefits, there are hurdles to achieving it. Decision-makers and organizational leaders reported that developing a strategy to meet the demands of a changing workforce is a top challenge. This is followed by staying consistent with their approach and finding enough resources to execute. About 26% also report that getting buy-in from leadership is a challenge.

Top Challenges of Improving Company Culture

Source: High-Performance Culture ReportOpens a new window

Overall, 77% of respondents said that short-term goals, such as revenues and profit margins, hindered long-term strategies to improve culture.

Employee Development Initiatives Are Most Impactful in Improving Culture in Companies With Best-In-Class Culture

About 58% of respondents described their culture as very successful. So, what are companies with a best-in-class culture doing differently? And what results are they seeing? Here is a snapshot of a best-in-class culture.

Companies with best-in-class cultures say employee development (75%) and leadership development (55%) initiatives are most impactful in improving a company’s culture. This group prioritizes initiatives like leadership development, performance management, and diversity, equity, and inclusion (DEI) more than companies with less successful cultures. Further, what sets best-in-class cultures apart is focusing on employee mindset regarding these initiatives.

Organizations with best-in-class cultures saw significant revenue growth over the last year (47% vs. 9%) and a more positive outlook regarding success in the year ahead (75% vs. 21%).

Leadership Development Has the Greatest Impact on Improving Culture

About 52% of the respondents said that leadership development has the greatest impact on improving a company’s culture. An effective leader makes workers feel valued and promotes employee collaboration, engagement, trust, and eagerness to improve.

So, what are companies including in their strategies to enhance the capabilities and performance of their leaders? The most common elements include leadership training, executive coaching, and strategic planning.

Elements Part of Company’s Leadership Development Initiatives/Programs

Source: High-Performance Culture ReportOpens a new window

It can be seen that only 32% focus on mindset in their leadership development programs. However, the study found that companies focusing on mindset are significantly more likely to have employees that feel they are doing meaningful work (76% vs. 43%).

Interestingly, 49% of respondents didn’t think their programs were a great success. So, what can they do to improve their success rate? The most successful leadership programs are much more likely to include executive coaching, leadership training, mindset, and succession planning than others. Measuring, tracking, and optimizing these programs also indicate success.

Salary Isn’t Everything When It Comes to Employee Satisfaction

The elements that factor into a successful work environment vary greatly according to the job level. For example, executives and C-suite respondents are influenced most by learning and career development. On the other hand, senior leaders place almost equal weight on salary and relationships with colleagues. Managers feel salary and interesting job content are important. Further, 51% of all respondents say they crave respect. This means salary isn’t everything when it comes to employee satisfaction.

Most Companies Include Professional Development in Performance Management Programs

The study found that 60% of companies include professional development in their performance management programs. Other elements are time management, business process, and technical training.

Elements That Are Part of the Company’s Performance Management Initiatives/Programs

Source: High-Performance Culture ReportOpens a new window

Companies with the most successful cultures are much more likely to include professional development, business process, mindset, succession planning, and team-building activities than others. Further, companies with best-in-class cultures are 3x more likely to focus on mindset than others in their performance management initiatives.

All said, tracking and measuring performance is critical. According to the study, tracking the performance of initiatives, such as employee engagement, satisfaction, and leadership development, is critical to a successful company culture. Companies tracking employee retention for over five years are almost 2x more likely to achieve 80% retention rates than those tracking for fewer years.

See more: Values-based Recognition: The Secret to Building A Culture that Wins

DEI Programs Can Significantly Impact Culture and Employee Retention

The study found that DEI programs top the list of initiatives having the greatest impact on improving company culture, with 53% reporting so. But what do DEI programs actually look like?

The key elements of DEI initiatives are cultural competency (57%), gender/sexual diversity (55%), mindset (43%), unconscious bias (40%), and anti-racism (38%). The study found that companies with successful cultures are over 2x more likely than others to include mindset-focused initiatives (57% vs. 23%).

So, where exactly are companies investing when it comes to DEI? According to the study, 61% invest in DEI training for all employees, while 51% invest in training leaders. About 51% also invest in consultants to help them shape policies and practices. That said, it was found that companies with best-in-class cultures are significantly more likely to invest in training leaders compared to others (67% vs. 39%).

Effective DEI programs empower workers and can directly improve engagement and retention. Almost 63% of companies that significantly prioritize DEI initiatives saw retention rates of 60% or higher. This group is also more likely to consider employee engagement and retention very successful at their organizations. It was further found that companies prioritizing DEI initiatives were over 2x more likely to see significant increases in revenue last year than others (42% vs. 18%).


It may be seen from the study that organizations with best-in-class cultures prioritize employee and leadership development, especially concerning their mindset, performance management, and DEI. And the results show in the form of improved revenues and confidence. Hence, prioritize these elements to improve your organization’s culture and success rate in the year ahead.

What steps have you taken to improve your organizational culture? Share with us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!

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