I met with the Drucker Institute back in 2017 when they were just launching their Corporate Effectiveness Index in the Wall Street Journal. The index ranks the top 250 best-managed companies each year based on 35 data points from 16 third-part sources, including employee satisfaction data from Indeed and Glass Door — simply one element of founder Peter Drucker’s legacy of responsible leadership for a thriving, resilient, and functioning society.
Back in 1940, Drucker wrote “Concept of the Corporation,” in which he observed: "For the great majority of automobile workers, the only meaning of the job is in the paycheck, not in anything connected with the work or the product. No wonder that this results in an unhappy and discontented worker."
I was reminded of this wise insight again when I read the WSJ’s recent article, "Compensation or Culture? The Best-Managed Companies Lean Into Both,” but what further caught my eye was the research they shared, and how it validated what we’ve been pioneering for years: you can't skimp on either compensation or culture to drive long-term success.
According to the research, companies winning today are strategically connecting compensation and culture, with 19.3% average annual returns — far outpacing the S&P 500's 12.1%. The portfolio of companies scoring more consistently across employee engagement and development indicators had a significantly higher average total annual return than those with greater variability among the metrics—20% versus 17.8%.
Perhaps this is connected to Gallup’s quoted finding that "Nearly three-quarters of disengaged employees will change jobs for a 20% bump in pay. But for those who love the culture and are highly engaged, it typically takes more than a 30% increase to lure them away."
After 10 years at LOCAL, I’ve personally witnessed that the consistency required for this kind of loyalty (and profit) doesn't happen by accident; it demands intentional strategy and execution. Because this isn't just about money or perks. It's about how employees experience their workplace through communication and storytelling, and how change is introduced and sustained across the organization.
Even among those who understand that employees need both strong compensation and culture, I’ve seen that most struggle with the "how." Treating internal stakeholders as valued customers instead of simply resources, and applying proven marketing principles to drive engagement through Change Marketing™ is the answer, and I want to break some of that down.
1. Employee Experience is Everything LOCAL's Change Marketing™ methodology starts with understanding how employees experience all decisions, including those around compensation and culture. Our cultural research, audience insights, and persona development ensure that every communication — from benefits rollouts to technology adoption — resonates with employees' actual needs and motivations.
2. Storytelling Drives Ownership LOCAL has perfected creating narratives that help employees understand the "why" behind decisions. Our strategic storytelling approach moves employees from awareness to adoption to ownership by giving them a role to play. Storytelling is especially effective in companies with distributed frontline workforces who are often many degrees removed from boardroom decisions.
3. Consistency Across Touchpoints Matters Again, companies with consistent performance across metrics outperform those with variability. LOCAL's consumer-grade communication strategies ensure that culture and compensation messages are aligned across every employee touchpoint — from recruiting to onboarding to performance reviews to major change initiatives.
Change Marketing™ also consistently delivers the engagement improvements that drive the same business outcomes which Gallup measures:
The article’s authors Rick Wartzman and Kelly Tang highlight Autodesk and Mastercard as examples of companies who are successfully linking compensation and culture in their writeup, but here are some others LOCAL has been helping achieve the same thing:
When Southwest faced the operational disruptions mentioned in similar industry challenges, LOCAL helped restore employee trust and engagement through strategic communications that connected operational improvements to employee experience. The result? Leaders called our work "the best piece of communication from this company in 25 years."
Our customer engagement program took a complex C-suite strategy to 36,000 frontline employees. The program became so embedded in the culture that managers began using it to recognize and reward employees.
Similar to Mastercard's approach of rewarding employees "for both what they deliver and how they deliver," LOCAL is currently helping Emplify Health live out their brand values internally through a workplace value proposition that puts empathy at the center of care.
And here are a few more measurable outcomes from other efforts:
The research is clear: investing in culture is equally important as allocating resources for competitive compensation. But understanding the challenges and solving them effectively are two different things. If this resonates with your reality, here are some diagnostic questions worth exploring with your leadership team first:
Right Now (The 30-Day Reflection):
Looking Ahead (The 6-18 Month Vision):
"[LOCAL is] very good at getting into the crux of the situation quickly, understanding cultural nuances and intricacies adeptly and bringing a refreshing energy and creativity into the solution,” — Group Head of Employee Experience at Zurich.
If your company could use strategic communication reinforcement, or simply help investing the time and dedication required to proactively address the balance culture and compensation rather than reacting to retention crises, here’s what Change Marketing™ can do out of the gate:
"It's rare to have people seek to understand who you are with such tenacity. To create ideas and concepts that are being integrated into the very essence of our vision. Their experience and expertise has challenged our thinking and unknown assumptions, spurring us on to be a far better global organization." — VP at Cru
Ready to move beyond the compensation vs. culture debate and start driving the integrated results you and your company are looking for?
Sources: "Compensation or Culture? The Best-Managed Companies Lean Into Both" - Wall Street Journal, October 7, 2025. LOCAL case studies and client testimonials from company archives.
