Deep Dive. The Financial Benefits of Building Identity and Values are Real

Excerpt from Richard Barrett’s white paper, Building a Vision-Guided, Values-Driven Organization.  Reprinted with permission.

During the 1990’s the average annual shareholder return over a period of ten years was 23% in companies that make up the “100 Best Companies to Work For in America”. The average annual shareholder return of the Russell 3000 Index (a general index of American industry) over the same period was only 14%.

In 1998 there were 164 publicly held companies represented in three lists of “best” companies: Fortune Magazine’s list of “100 Best Companies to Work For”, Industry Week’s “100 Best Managed Companies”, and Working Mother’s list of “100 Best Companies”. Of these 164, thirty-eight were on more than one list. These “best” 38 showed consistently superior financial performance over a ten-year period of several percentage points over the 164, and the 164 showed a consistently superior financial performance of several percentage points over the Standards and Poor 500.

In “Corporate Culture and Performance,” Kotter and Heskett show that companies with strong adaptive cultures based on shared values outperformed other companies by a significant margin. Over an eleven-year period, companies that emphasized all stakeholders – employees, customers and stockholders, and focused on leadership development, grew four times faster than companies that did not. They also found that these companies had job creation rates seven times higher, had stock prices that grew twelve time faster and profit performance that was 750 times higher than companies that did not have shared values and adaptive cultures.

In “Built to Last,” Collins and Porras show that companies that consistently focused on building strong corporate cultures over a period of several decades outperformed companies that did not by a factor of 6 and outperformed the general stock market by a factor of 15.

Remember, to your customers, you are your touchpoints.

For more, check out my book, TOUCHPOiNT POWER! Get & Keep More Customers, Touchpoint by Touchpoint (William Henry Publishing, 2013), an Amazon international top 10 customer service best-seller. For information and to order, visit TouchpointPower.com or view the TOUCHPOiNT POWER! listing on Amazon.

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