Organizational Culture - Help or Hindrance?
What exactly is organizational culture and how can it help your business? Find out in this article..
There are a number of inter-related performance
factors in a company's
operating style/culture (the way things are done) that can significantly
influence its organisational effectiveness. Poor execution caused by
organisational issues is held responsible for over 50% of corporate failures
to
fully deliver business strategy. Moreover, at least 60% of company mergers
fail to realise their anticipated pre-acquisition values, and approximately
75%
of all change programmes are unsuccessful. Why? Because organisational
culture can secretly conspire against these efforts.
Cultural clashes mean that what looks on paper to be a sensible
restructuring solution often doesn't work in reality unless potential
incompatibilities of organisations and units during merger integration are
addressed. Discovering cultural differences too late can prove costly, time
consuming and hugely frustrating.
What is organisational culture?
Many books, filling plenty of library shelving, give us all sorts of
statements
and descriptions characterising organisational culture. Organisational
psychologists talk of the values, assumptions, behavioural patterns, style,
climate, atmosphere, norms, and observable attributes that we associate with
a particular organisation or group. Put more simply, it's "the way things
are done around here."
Employees soon learn the ropes about the organisation's culture by
experiencing how people behave towards one another and about the 'rules of
the game' through what is paid attention to. These behavioural norms may or
may not be aligned with the company's stated values or conducive to the
achievement of its stated strategy.
Examples abound. The CEO who is adamant about the need for
entrepreneurial creativity and innovation as a strategic imperative, and
whose senior manager's immediate response to any volunteered creative idea
is: "It won't work."
The corporate centre that entreats frontline staff at a bank to engage in
more consultative (and time consuming) dialogue with customers, only to have
the branch manager quietly mouth "hurry up" from behind the customer queue.
The FMCG leadership who extol an end to bureaucracy, encouraging
operational slickness and efficiency while at the same time demanding the 27
monthly reports, 50% of which nobody reads.
What type of culture is best?
These might all be examples of potential misalignment between
organisational behaviours and the view from the top, but they illustrate
reality for many employees in UK Plc.
What these examples don't really tell us and what many organisational
culture diagnostics fail to uncover is what the "right" culture to have is.
Even
the grandfather of organisational culture gurus, Dr Roger Harrison, couldn't
get us past the strengths and limitations of his model of four
organisational
cultures: Power, Role, Achievement, and Support. It has still been left to
organisations to try to fathom out what type is best for them.
Ultimately, why organisational cultures secretly conspire against what a
company is trying to achieve is because they are by their very nature so
difficult to pin down. Virtually intangible, organisational culture has been
notoriously difficult to describe in terms of how it operates and its
concrete
impact on organisational performance, even despite the plethora of stories
and examples.
Luckily for us the 1980's and '90's saw an advent in corporate UK of
organisational culture change initiatives with a strong emphasis perceiving
them as the key mechanism to organisational effectiveness and performance.
A focus was given to answering questions including: What type of culture do
we need? What is the relationship between culture and performance?
What has to be changed to modify the culture? Recent writers including
Collins & Porras, Hesketh and Kotter have found positive relationships, in
terms of process, between organisational culture and organisational
performance. Models such as the European Foundation for Quality
Management's Business Excellence Model also provide some hooks to be able to
understand and measure the impact of "the way we do things here."
With these frameworks for measuring and monitoring how the way things are
done influence an organisation's performance outputs, we can begin to
develop an answer to not only how "the way things are done around here"
helps or hinders our organisational strategy, but also allows for a
definition
of the type of culture that is needed to achieve strategic goals.
So how does organisational culture help or hinder?
The body of research into this field of organisational performance seems to
have certain common themes. There are be two discrete and independent
scales or dimensions of organisational culture that work with each other to
help to describe a number of combined organisational characteristics. The
first of these two dimensions provides a picture of whether an organisation
tends to be orientated more towards tasks, processes and quantitative goals
rather than people, relationships and qualitative goals. The second
dimension describes an orientation either towards collaboration, slower
timelines, and considered responses or more towards competition, faster
timelines and pro-activity.
Rather than providing strict labels of organisational culture, they offer
typical
behavioural patterns depending on their combination. The research also
identifies a number of internal performance factors directly linked to and
influencing business performance and other outcomes. What all the research
points to is that there are a number of very discernable, inter-related
organisational performance factors in a company's operating style/culture
(the way things are done) that can significantly influence its
organisational
effectiveness.
These factors, processes, ways of working and behaviours, clearly influence
the psychological contract between company and employee and ultimately
how it performs in the market. They include the extent to which the strategy
is clearly communicated and understood and is in keeping with organisational
values; the extent to which goals are clear at the individual and team level
and have an explicit fit with one another and the organisations overall
business objectives.
They include the extent to which leaders and managers operate in ways that
are consistent with the stated vision and values of the organisation,
providing psychological reward and recognition over and above the financial
aspects, and engendering employee participation and cooperation across the
business. They also include the extent to which the business is generally
structured and organised to facilitate decision-making, autonomy and control
dispersed at the appropriate levels in the organisation and freed from
layers and bureaucracy.
What research has gone on to demonstrate is a correlated relationship
between these organisational factors and levels of employee satisfaction and
morale; the levels of willingness and ability to initiate and manage change
successfully; the extent to which employees feel personal responsibility and
accountability for customer service and business performance; the
effectiveness of internal communications, cross-functional collaboration and
ultimate organisational performance effectiveness.
The perennial 'problem' with organisational culture has always been the
difficulty of pinning it down so that something tangibly could be done about
improving or changing it. With these performance drivers it is much easier
to
identify what exactly is operating in the organisations style that is
influencing
the results it sees. With some regression analysis of the co-relation and
relationship between these behavioural norms and the organisations resulting
effectiveness, it is possible to address the root causes rather than the
symptoms.
These performance factors in an organisation's style or culture are so
powerful that they can make all the difference to the successful delivery of
business strategy and execution of business plans. They represent the glue
that creates engaged, highly committed workplaces. And when working like
the highly oiled pistons of a high performance engine, organisational
culture
can transform companies, as Collins describes, "From Good to Great."
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