What: A healthy corporate culture, built through defined beliefs, strong leadership, and consistent behaviour modeling, is crucial for corporate venture success, with 26% of failures linked to cultural issues.

Why it is important: As retail companies increasingly launch new ventures, understanding how to build and maintain healthy cultures becomes critical for success, particularly as recent data shows successful cultural transformation can increase EBITDA by 18% within one year.

Building and maintaining a healthy culture in corporate ventures requires systematic effort and careful consideration of the unique corporate context. Research shows that companies with top-quartile cultures achieve three times higher Total Shareholder Return than those in the bottom quartile, while also demonstrating significant improvements in EBITDA and Return on Invested Capital. The challenge intensifies as ventures grow from small teams to larger organisations, necessitating deliberate steps to shape and maintain cultural health. Leaders must focus on three key areas: defining underlying beliefs, establishing strong leadership practices, and consistently modeling desired behaviours. The article emphasises the importance of balancing parent company values with venture independence, particularly in hiring practices and organisational structure. Success requires creating direct policies and support structures while allowing the venture to develop its own unique cultural elements. This balanced approach helps ventures leverage parent company advantages while maintaining the agility and innovation typical of start-ups.

IADS Notes: Recent retail transformations powerfully validate the article's emphasis on cultural impact. Just this spring in March 2025, Macy's "First 50" pilot locations showed how strong cultural alignment drives financial success, achieving significant EBITDA improvements through systematic transformation. The momentum for cultural change was already building six months ago in December 2024, when Neiman Marcus's "Magic Makers" program achieved a remarkable 34-point increase in employee engagement, proving that culture directly impacts performance. Last month's Financial Times' Best Employers ranking recognised four major department stores, highlighting how cultural excellence drives both talent retention and business success. Back in February 2025, El Corte Inglés demonstrated the power of successful parent-subsidiary cultural alignment, investing €428 million in modernisation while preserving core values - a prime example of how companies can balance innovation with traditional strengths.

When building new businesses, culture matters