70% of CEOs in the UK have made culture a key priority

UK businesses often prioritise company culture to drive results – but according to a new report they are still behind other leading markets in this regard. Seven-in-ten UK CEOs made culture a key priority at their firm in the last three years – 12% fewer than their global counterparts.

Heidrick & Struggles has released the results of a new global CEO study, surveying 500 CEOs across the world. The research considers how culture propels organisational performance in Australia, Brazil, Canada, China, France, Germany, Spain, the UK and the US, and has found that that intentionally building a company’s culture can impact its financial performance.

According to the global respondents, emphasising company culture has two leading goals. It can positively boost employee engagement according to 26% of CEOs – which roughly four-in-ten said they hoped would positively impact customer and quality focus. At the same time, 31% of global respondents said they aimed for boosted financial performance from improving the firm’s culture – and again around 40% noted that culture fostering an Agile mindset could push for such improvement.

Ian Johnston, co-author of the paper, and Partner in Heidrick & Struggles’ London office said, “The global pandemic caused turmoil within many organisations and it seems those who have maintained a focus on culture during the uncertainty will be better positioned for future success.”

According to Heidrick & Struggles’ analysis, however, some national markets are taking the benefits of cultural change more seriously than others. The research identified a group of respondents around the world who are more intentional in their culture efforts than others, and whose companies have shown double the revenue growth of others we surveyed – labelled “culture accelerators.”

These firms say that culture is a top-three driver of their financial performance, that it’s very important or crucial to link culture to strategy in order to ensure a positive effect on financial performance, and that they have focused on culture shaping as a key priority over the past three years. In the UK, just 10% of CEOs were found to be in this category – beneath the global average of 11%, and far behind the leading markets of the US on 18%, Canada on 16%, or Germany at 14%.

Concerningly, the UK looks set to fall further behind too. In the last three years, 70% of British firms were found to have refocused on their culture. This is 12 percentage points behind the global average of 82%. While double the number of UK firms said they did not do this as they had previously done so, those numbers would still leave the nation 3 points behind the international average for investing in culture.

At the same time, the researchers also found evidence that UK CEOs are not evaluating their company culture as closely as they might – suggesting they may struggle to act if things continue to drift. While UK CEOs claim to ‘observe’ culture than international counterparts, they rely more heavily on their employee retention rate and employee engagement surveys than surveys directly tailored to assessing company culture.