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Written by: Joel Shapiro, Ph.D.
Every organization has a culture. Your organization’s culture is either helping you get the job done or holding you back. Culture matters.
Research shows that performance enhancing cultures are correlated with much higher employee engagement, customer satisfaction, and growth in revenues, stock price, and net income (e.g., Kotter & Heskett, Corporate Culture & Performance, 1992).
And every experienced professional knows this from first-hand experience. Is it a good thing if everyone on your team achieves their business targets? Not necessarily. It depends on how the work was done. If everyone hits their targets by fudging the numbers, sweeping problems under the rug, stabbing their colleagues in the back, hoarding information, and lying to customers, it would be a disaster. That is not a sustainable way to do business. In addition to being unethical, it is bad for business and bad your brand.
Employee attitudes and behavior make an enormous difference to the success and sustainability of your business.
How is your culture working for your business? Is it time for a culture-shift?
This brief article will outline five situations in which you need to shift your culture:
- Aligning your culture with strategy
- Fixing a dysfunctional culture
- Updating your core values when they become stale
- Continuous improvement
- After a merger or acquisition
Aligning Your Culture with Vision & Strategy:
You should shift the culture of your organization when it is not aligned with your mission, vision, and strategy.
Culture becomes a true asset to your organization—part of your competitive advantage—when it helps drive your business forward. Your culture should drive, support, and reinforce your strategic agenda. Employee attitudes, behavior, values, focus, and mindset should be aligned with the big picture. It’s people who do the work in your organization, and those people should be driving your business forward.
You will need to shift your culture, obviously, when there is a significant change in your mission, vision, or strategy, and if your culture falls out of alignment. Cultures become misaligned over time due to neglect, changing employee demographics, business growth, technological change, and so on.
For example, if you are shifting your strategy from service to price, you will need to shift your culture to support your new strategy. You will need to help your employees shift their daily focus away from improving customer service and toward thinking about efficiencies, costs, synergies, economies of scale, etc.
Anytime you launch a major initiative, or shift your strategic focus, you can ask: Does our culture support this change? How can we anchor this new project or strategic focus in our culture to make it stick?
You should also shift the culture of your organization when it is not working, i.e., when it is dysfunctional, toxic, ineffective, or not adding value. Here are some dysfunctions we’ve all seen:
- Low employee morale, motivation, and effort
- Lack of accountability, initiative, innovation, and continuous improvement
- Poor communication, teamwork, and alignment
- Low trust and respect; hidden agendas; egos, silos, and turf wars
- Employees dependent and reactive versus empowered and proactive
- Employees careless, cynical, jaded, defensive, weary, or wary
- Leaders not leading by example; poor ambassadors for the organization and its values
People don’t come to work to do a bad job. These dysfunctional behaviors are very natural (human) responses to working in a toxic culture—especially in large organizations in which people are treated like cogs in a machine. These toxic behaviors are not necessary or inevitable. They are fostered and nurtured by poor leadership and poor organizational design.
These dysfunctions create a vicious cycle of failure. They escalate employee absenteeism and turnover, which are very expensive and demotivating. They are also devastating to productivity, work quality, and customer service.
Updating Core Values:
Core values are the most common way organizations define, communicate, and manage their culture. Culture-shift is necessary when your employees are not living the core values and when your core values become stale (lifeless) or out of date (irrelevant to your business).
Two companies might share the same set of core values but define and live those values completely differently from each other. For example: speed, flexibility, innovation, and risk taking might have one meaning for a small high tech company and a completely different meaning for a nuclear power plant. There are two big lessons here. First, design and run your organization to foster your core values—to help your employees live the core values. Second, align your core values with your vision and strategy—make sure your values are relevant and useful to your business.
- If your core values are out of date, develop new values.
- If they are stale, breathe new life into them by updating and redefining them.
- If your employees are not living the core values, re-anchor your core values in culture and put culture back into strategic planning where it belongs: “What skills and values will help us achieve our vision and execute our strategy?”
It takes far more effort to change your culture than to maintain it, but both take work.
Large-scale culture change requires major OD work. You recreate your culture by redesigning systems, structures, and policies to (i) support the strategic agenda, (ii) foster the employee skills, attitudes, and behaviours that will help the business succeed, and (iii) proactively help your employees achieve their most ambitious work objectives.
Culture maintenance and continuous improvement involve:
- Leading by example: leaders at all levels need to lead the way and model desired behavior.
- Helping employees excel in the core values by mentoring, coaching, training, removing obstacles, and generally ensuring people have the support and resources they need to live the core values.
- Regular debriefing and audits that support both verification and incremental improvement: “How well are we managing our culture? How is our culture working for us? Are employee attitudes and behavior moving in the right direction, and what impact is that having on the business?”
- A strong drive to continuous improvement. We should be striving to improve the way we live our core values in exactly the same way we try to improve service, sales, project management, budgeting, and so on.
You can look for opportunities for improvement from everyone and everywhere: new research, best practices, and as part of your normal course continuous improvement efforts.
After a Merger or Acquisition:
After a merger or acquisition, it is important to help your new employees adapt to your culture and live your core values as quickly and authentically as possible.
Nevertheless, it is equally important to learn as much as you can from the acquired company’s culture. Try to absorb the best of what their culture had to offer. This can provide you with a wellspring of good ideas for improving your organizational effectiveness and culture. It can also be a huge sign of respect to your new employees which helps you earn their trust and loyalty. As you on-board your new employees, ask them:
- What worked best in your old firm?
- What did you like most about working there?
- What made your organization effective?
Asking these questions will also help you assess the ideas and skills of the people you are inheriting in the merger.
Core Business Questions:
There are many complex and sophisticated methods for analyzing organizational culture. Nevertheless, underneath it all are important business issues that leaders should be able to discuss in everyday business language—relatively free of technical jargon. And HR departments need to help them do it. Core culture question include:
- What do we stand for?
- What are our highest aspirations?
- How do we want to work together?
- How do we want our employees to represent us?
- How do we want our leaders to treat our employees?
- Which skills and values will most drive, reinforce, and support our vision and strategy?
- Why would really talented people want to work really hard for us?
These are conversations worth having! The decisions you make around these questions will have an enormous impact on the success and sustainability of your business. And as you can see, your answers to these questions will always be open to continuous improvement.
Think of the effort that goes into insuring, maintaining, and budgeting for our physical assets. At least as much care and attention needs to go into our human assets—the people who are maintaining our machines, serving our customers, putting out the fires, and generating results for our stakeholders. It’s good business.
Here’s a brilliant idea: treat your employees like human beings; engage them in the problems and opportunities of your business; make them part of the solution; ask for their help; and help them be successful.
Cultural dysfunction is so common that small improvements in your culture can generate huge results and give you a substantial competitive advantage. Culture matters.
Copyright © 2015 Joel Shapiro, Ph.D., all rights reserved
Joel Shapiro, Ph.D. is a Partner at Incrementa Consulting. Joel is passionate about developing leadership capacity, making employees part of the solution, and finding the perfect blend of humanity and business performance. You can follow Joel on the Incrementa website and on Twitter.