The crucial role founders play in corporate culture

family-firmsThere has probably seldom been a time where organizational culture has been such a hot topic.  This desire to get inside how our companies work has been fueled by stories such as the recent insights into how Amazon operate.

Despite the huge amount of negative publicity that surrounded that story, a recent study goes as far as to suggest that employee satisfaction is highest at companies that are run by their founder, or the family of the founder.

Interestingly however, not only is employee engagement higher, but corporate performance also appeared to be higher, as engaged employees produce better outcomes for the founders.

“We found that employees at firms like Amazon—large, founder-run, publicly traded—are, on average, more satisfied with their company,” the authors suggest.

The founder bonus

The data from the study revealed a number of core findings:

  • First up, employees of firms where the founder was at the helm rated their employers as significantly higher than their peers in other organizations
  • There was less satisfaction in firms where the heirs of the founders were in charge
  • This satisfaction level correlates closely with the performance of the firm

The findings emerged from an analysis of over 100,000 surveys published on the Glassdoor website over a four year period.  The findings revealed that there was a strong correlation between employee engagement and company performance.

“Many institutions foster a culture that values hard work and high achievement,” the authors say. “Amazon is not unique in that regard.”

The researchers believe their findings provide a crucial insight into the differences in engagement between family and non-family firms.  They believe that the data provides a crucial support for the virtues of family firms, both in terms of employee engagement and long-term performance.

“Our results show that corporate culture systematically differs by firm type and that it matters for subsequent firm performance,” they conclude. “There is an old Dilbert cartoon about the saying, ‘Employees are our most valuable asset.’ We can’t tell whether money, employees or carbon paper matter the most, but our results suggest that more satisfied employees create more value for the owners of the firm.”

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One thought on “The crucial role founders play in corporate culture

  1. Makes a lot of sense. It can't be a surprise that most innovative companies are startups that have created their culture from the ground up rather than having to change what's already there.

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