A new study by Crucial Learning, a provider of corporate learning solutions, identified four cultural competencies that are potent predictors of organizational performance. Most importantly, when adopted and practiced together, these four competencies account for nearly half of an organization’s ability to execute and innovate.

According to the survey of 966 professionals, the four cultural competencies that are substantially correlated with an organization’s overall performance include:

1. High-Performance Habits
2. Productive Relationships
3. Healthy Communication
4. Influential Leadership

When isolated, each competency is highly correlated with results. Specifically, Influential Leadership explains 32% of the variance in organizational performance, High-Performance Habits explains 28%, Productive Relationships explains 24%, and Healthy Communication explains 23% of the variance in performance.

However, the data reveals that the biggest impact on performance occurs when these competencies are compounded. When practiced together, these four culture competencies account for 43% of the total variance in an organization’s ability to execute and innovate.

Joseph Grenny, leading researcher and cofounder of Crucial Learning, says this data should be taken seriously in setting the modern-day leadership agenda.

“We think of launching the iPhone or ChatGPT as transformative to Apple and Microsoft,” says Grenny, “It appears, however, that these four cultural characteristics explain as much of an organization’s success as a blockbuster product.”

And doubling down on their importance, Grenny and team also found these competencies offer a distinct competitive advantage. Specifically, employees who practice the four competencies (regardless of industry, size, or geography) are 45% better at executing and 58% better at innovating than organizations that don’t have workers who successfully practice these competencies.

“Leaders looking for enduring drivers of high-performance have long known they must take their organization’s culture seriously,” says Grenny. “The present study points to facets of the culture that deserve disproportionate attention, especially in these uncertain times. By embedding these crucial behaviors into your human system—your culture—you’ll leverage what research shows are powerful predictors of sustained value for customers, employees, and shareholders.”

The study set out to answer the question: what human behaviors most enable an organization to both execute on its current mission and innovate to stay relevant? Researchers measured performance by these two outcomes because while executing well on today’s goals is admirable, leaders today have an equal responsibility to ensure tomorrow’s relevance.

Having assessed the capacity of subjects’ organizations to both execute and innovate, researchers sought to determine whether some cultural behaviors were more predictive of performance than others. Respondents were asked how often the people they relied on to accomplish their work demonstrated 26 different behaviors. Five of the 26 behaviors were most predictive of overall performance. These include (in order of importance):

1. Keeping every commitment or renegotiating commitments when conflicting priorities arise (High-Performance Habits)
2. Collective optimism in senior leadership when they announce bold new ideas that require significant change in behavior with the goal to achieve results (Influential Leadership)
3. Holding people accountable for substandard performance (Healthy Communication)
4. Working productively with others whose personalities or styles are far different from their own (Productive Relationships)
5. Consistently finishing high priority projects without being distracted by urgent (but less important) requests (High-Performance Habits)

In addition to identifying crucial behaviors and culture competencies, the study also found that the way in which teams work—whether they’re remote, hybrid, or in-person—has no impact on organizational performance. What mattered was whether leaders fostered these behaviors, irrespective of the work context. These findings provide an interesting counter argument to the popular return-to-office mandates trending in the private and public sector.

Grenny says this insight confirms that ultimately, performance is not about location, it’s ultimately about leadership.

“Leaders looking to improve performance, especially in an uncertain economy, can ignore many of the trendy strategies like return-to-office that are dominating the headlines,” says Grenny. “What we see is that the viability of an organization is directly linked to the strength of its culture. And co-location is no guarantor of a high-performance culture. When these four competencies are present in your human system, leaders can predictably expect the execution needed to succeed today and the innovation needed to excel tomorrow.”

About Crucial Learning
Crucial Learning improves the world by helping people improve themselves. By combining social science research with innovative instructional design, we create flexible learning experiences that teach crucial behaviors that have a disproportionate impact on outcomes and solve life’s most stubborn problems. Our award-winning courses, assessments, and accompanying bestselling books include Crucial Conversations® for Mastering Dialogue, Crucial Conversations® for Accountability, Crucial Influence®, The Power of Habit™, Getting Things Done®, Crucial Teams®, and the Strength Deployment Inventory® (SDI®). They have helped millions achieve better relationships and results, and nearly half of the Forbes Global 2000 have drawn on these crucial behaviors to improve organizational health and performance. CrucialLearning.com