Study Finds Adaptive Corporate Culture is Key to Financial Performance; Crawford International Announces Research Study Results

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Companies with adaptive corporate cultures and strong leadership practices financially outperform those that do not, according to a major study of Fortune 500 companies co-sponsored by Crawford International (http://www.crawfordinternational.com/research) and HR.com (http://www.hr.com).

Cisco’s unique and agile culture originates at the top with John Chambers as President and CEO. Cisco’s core values have allowed our company to remain very agile in adapting cultural expectations to include the importance of Cisco as a career company, management as a profession, and talent development and movement.

Companies with adaptive corporate cultures and strong leadership practices financially outperform those that do not, according to a major study of Fortune 500 companies co-sponsored by Crawford International and HR.com.

Crawford’s Leadership & Culture Study reports that a mere 3 out of 10 strategic change programs produce the business value or financial return that company leaders expect. In a study of the financial performance of 94 large companies from 1995 to 2004, the researchers found that companies that create adaptive corporate cultures outperform companies with non-adaptive cultures by a factor of 900 to 1 as measured by long term net income and stock price growth.

“As we worked with corporations over the past 24 years, we came to recognize the importance of corporate culture and strong leadership in supporting business change and transformation. Clients that have an adaptive or agile corporate culture have historically thrived in the face of organizational change while those with non-adaptive cultures suffer through change,” says Ric Roi, lead researcher and vice president, Crawford International.

Companies participating in this study reporting high levels of adaptability include 3M, Apple, Bank of America, Cisco Systems, Barclays, BMC, Hewlett Packard, Genentech, GlaxoSmithKline and Intuit.

Study participant and Crawford client Larry Schnicker, Director, HR Development Operations, Cisco Systems said, “Cisco’s unique and agile culture originates at the top with John Chambers as President and CEO. Cisco’s core values have allowed our company to remain very agile in adapting cultural expectations to include the importance of Cisco as a career company, management as a profession, and talent development and movement.” Adaptive companies also tend to be more pioneering as evidenced by Cisco recently being named by Business Week as one of the top 30 most innovative companies in the world.

The following table summarizes the impact of adaptive culture for the upper and lower quartiles of companies participating in this study. This financial growth was measured from 1996 to 2004.

Net Income Growth:

*Adaptive Corporate Culture 989%

*Non-Adaptive Corporate Culture -47%

Net Income Index Growth:

*Adaptive Corporate Culture 11.5    

*Non-Adaptive Corporate Culture 1.7

Stock Price Growth:

*Adaptive Corporate Culture 204%    

*Non-Adaptive Corporate Culture 70%

The central finding of this study is that investing in strengthening leadership and culture to improve adaptability can have a significant impact on the long term financial performance of a company.

“If more corporations truly measured the value and impact of leadership and culture on their bottom lines, they would invest more in developing leaders and creating high performing cultures, instead of just paying lip service to it. At HR.com, we are committed to helping our 135,000 members share in the research we sponsored with Crawford so they can understand and realize the impact of great leadership and culture,” says Debbie McGrath, CEO, HR.com

Copies of the Crawford Leadership & Culture Study can be found at crawfordinternational.com.

About Crawford International

For more than two decades, Crawford International (http://www.crawfordinternational.com) has partnered with Fortune 500 companies to drive sustainable results from strategic initiatives involving change and transformation. Marquee clients such as HP, Cisco, Network Appliance, Genentech, Apple, Wells Fargo and many others rely on Crawford for their ability to accelerate business change implementation.

About HR.com Limited

HR.com http://www.hr.com is in business to help build great companies by connecting them with the knowledge and resources they need to effectively manage the people side of business. As a global authority, we deliver HR Best Practices to help organizations build great companies through community, collaboration, research, shared best practices, and measurements.

If you would like more information on this topic, or to schedule an interview with Ric Roi, please contact Jill Delaney at 518-466-6139 or email Jill at jsdelaney @ nycap.rr.com.

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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