There are shelves of books about company culture and the importance of getting it right. Each of these books provides examples of a company that was extremely successful because of its corporate culture. And there are plenty of examples of companies that went under and where people later found signs of a bad culture as a driver of the bankruptcy. And each of these books will tell the reader that a key factor for business success is improving company culture. But how likely is it that this will happen?
Using large language models to read transcripts of approximately 55,000 earnings calls from nearly 7,000 companies and double-checking the results with independent data from other sources like Glassdoor a group of researchers looked at culture change scores for companies over time and specifically during two key events: when the CEO changes and when a private company goes public.
If you’re thinking TL;DR, let me give you the key charts below. They show the culture scores of companies divided into four groups over a period of ten years (left) and in the ten years after an IPO (right).
I don’t think you’ll ever find these charts in any of the corporate culture books because they basically say that corporate culture doesn’t change over time. There are hardly any companies that succeed in improving a bad corporate culture, and there are also hardly any companies with a good corporate culture that see their culture deteriorate significantly. Either these corporate culture books are never implemented, or their advice is useless.
Culture remains extremely stable over time
Source: Li et al. (2025)
The research shows that company culture is essentially defined by the founder as she creates the company and then hires more and more people. If the founder is a jerk, the company culture will be poor and stay poor forever. If the founder is an enlightened leader, the culture will be good and will remain so for a long time.
There’s another important point in a company’s life that defines its culture: the IPO. When a company goes public, the company often undergoes significant changes at the top management level, with the founder often stepping back. The culture instilled in the new publicly traded company is one that will last forever or remain virtually unchanged for a very long time.
People often expect the arrival of a new CEO to be an opportunity to reset an organization’s culture, and the research digs into this idea as well. The graphs below show what happens when a new CEO arrives at a company in the three years after arrival.
The left diagram shows that a new CEO can increase innovation and drive a more innovation-friendly culture throughout the organization. But unfortunately, the impact disappears after a few years and returns to the previously existing levels. A new CEO can therefore give an organization a boost, but that will probably be short-lived.
If you think that’s bad, you don’t want to look at the right graph. It shows that a new CEO has no influence on important socio-cultural elements such as integrity or teamwork. On average, there is an improvement in the respect with which people treat each other in the year after a new CEO has arrived, but a year later this effect has almost completely disappeared.
You might almost think that new CEOs are like new managers of sports teams. They may lighten the mood for a short while, but soon the team is behaving as dysfunctionally as before.
Influence of a new CEO on culture components
Source: Li et al. (2025)
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