For the past 25 years, the Katzenbach Center, the institute for culture, leadership and teaming at Strategy&, PwC’s strategy consulting group, has been studying the influence of culture on business success. This year, we asked 3,200 survey participants to reflect on their experiences in the context of the COVID-19 crisis. The results show that for some, organisational culture has been the hero of their pandemic story. By reflecting on lessons learned during the pandemic, business leaders can glean insights that will carry them forwards.
The fact that many organisations believe their culture was a source of strength during the pandemic suggests that as leaders navigate a series of future challenges, amplifying the right parts of their culture can provide them with a competitive advantage. But deficiencies within an organisation’s culture can also undermine its ability to meet its strategic objectives.
Our survey shows that recruitment and retention of talent tops the list of future challenges leaders are most worried about. This makes sense, given reports that many workers might have been ‘sheltering in job’ as economies began recovering from the pandemic. In fact, data from the US Bureau of Labor Statistics shows that in some places, people have already begun leaving their jobs. In the US, there are a record number of job openings, and the ‘quits rate’—the proportion of people who quit their job—is sharply on the rise. People have many choices in the labour market today and are starting to act that way. Like our culture survey, PwC’s 24th Annual Global CEO Survey reveals that leadership and talent development is a priority; it’s among the top five areas executives plan to invest in over the next three years. But leaders are also grappling with the need to innovate, work in more effective ways, transform digitally and address many other issues.
In this report, we will lay out the evidence that amplifying their cultural traits can be a source of competitive advantage for companies. We will also identify cultural challenges that our survey reveals, particularly the crisis of authenticity: a mismatch between what leaders say about culture (especially regarding diversity, equity and inclusion) and what their people actually experience. Finally, we will discuss ways in which leaders can activate their culture, managing cultural traits—specifically by using a variety of culture change ‘enablers’ we’ve identified—in order to support change and strategic objectives.
Reid Carpenter
Global lead, Katzenbach Center PwC
