Most of us have experienced some part of the Gig Economy―either participating in a company that provides independent contractor work (a “gig”) or purchasing products or services from an independent representative of a company based on gig staffing. The Gig Economy offers the instant “plug and play” solution from either vantage point―company or hire―sign-up, install an app, and you’re basically ready to go. It’s based on new technology after all.
But is it only technology? Take Uber, for example. Over the last few months, consumers―i.e., potential and current customers―have been party to the steady drip of Uber public relations mishaps that are redefining the brand. And while company evangelists and technology insiders might value the culture that CEO Travis Kalanick created (along with one of the most successful Silicon Valley start-ups), most customers did not nor did they care. Customers were interested in the service―and most recently, service issues.
The ROI of Culture and the Gig Economy
Yet, at some point a company’s culture―defined as “a company’s tone, operating style, standard of behavior and invisible hand that guides the firm”―does matter in the long-term health of the brand. In 2015, Duke University’s Fuqua School of Business conducted a comprehensive study of ways that corporate culture drives profitability, acquisition decisions, and the ethical behavior of employees. This study is one of the only to quantify company culture as well as its impact from an investment, earnings, and management perspective.
The survey reviewed data received from over 1,800 CEOs and CFOs in more than 1,400 U.S. and Canadian companies. In doing so, it found that effective company cultures “are less likely to be associated with short-termism, unethical behavior, or earnings management to pad quarterly earnings,” as quoted from Shiva Rajgopal, Accounting Professor at Columbia Business School and collaborator in the Fuqua study. In short:
- 90+ percent of executives said culture is important at their firms.
- 78 percent said culture is among the top five things that make their company valuable.
- 92 percent said they believe improving their firm’s corporate culture would improve the value of the company.
- 46 percent of CEOs would not make an offer on a potential acquisition if the culture was not closely aligned with their own.
However, for a company’s culture to be effective, the leadership must continually demonstrate its values in everyday dealings. The study summarizes executives’ concerns―“executives caution time and again that the company has to ‘walk the talk’ …read more