Why organizational culture matters

It seems that everyone is talking about culture—from the Toronto Blue Jays to the RCMP, but few people really know what culture is. And even fewer understand what shapes a culture—or more importantly—why business leaders need to pay attention to it.

Culture is the combined attitudes, values, beliefs and behaviours of the organization, or what is universally understood in order for members to “fit in”. It basically covers how we are expected to think and act in a particular organization. These norms cover everything from simple practices such as; “how long are we away from our desks at break time” to complex ones such as; “what should we do if we have an idea about changing something”.

Culture is not a measure of employee satisfaction or employee engagement – those measurements are the result of culture. Nor is culture a measure of emotions. Many companies still describe their “culture” using emotion adjectives such as “fun” or “a happy place to work”. Some companies erroneously describe their culture based on their operating strategy, such as “fast-paced” or “customer focused”. None of these definitions or terms describe what behaviours or attitudes are expected from members. 

But why is having the right culture important? Culture matters because it has a direct effect on people factors such as employee engagement and motivation; and productivity factors such as product and customer service quality. Basically, organizational culture has a direct impact on the long-term viability of the organization. So, leaders need to pay attention to and fix their culture.

Imagine for a moment that your organization is faced with a new, complex customer opportunity. If your culture is such that people are expected to blindly follow rules (even when they don’t make sense), push all decisions up to people in more senior positions, and avoid doing anything differently; members will have a very difficult time adapting to any new situation.

If however, the culture is one where people are expected to “think outside of the box”, deal with customers directly, work together and take calculated risks to solve problems, and treat others with dignity and respect; members would meet the challenge with enthusiasm and creativity.

If you were the customer, which organization would you rather deal with—and which organization would you patronize? Culture matters! The expected, collective attitudes and behaviours of the members affect the long-term viability of the organization.

Often, the culture of an organization was formed by the company’s founders. Leaders that come after the founder can change that culture—but usually they just leave it alone. Sometimes however, the culture simply evolves—finding its way based on the attitudes and behaviours of its many members and systems. Rarely is the culture deliberately defined and shaped by the leadership team. Regardless of how it came into being—every organization has a culture.

Leaders need to realize the powerful impact they can and should have on culture. How they communicate, set goals and delegate authority will help shape the organization’s culture. Good leaders create a Constructive Culture by sharing information, collaboratively setting mutually acceptable, challenging goals and sharing influence and responsibility in a participative way.

In the previous example, if leaders decide to control members by creating too many policies and rules, insisting members defer to them for most decisions, and punishing members for trying something new or making a mistake, people quickly learn to lay low and stop thinking for themselves. And, they become fearful of change and new challenges. 

But if leaders motivate members to strive for excellence, encourage them to work together to solve problems, solicit their ideas to make improvements, and challenge them to take ownership and creatively solve problems; people will want to embrace change and willingly accept new challenges.

All of this points to the importance of managing and shaping your organization’s culture. Start by accurately measuring the current culture of the organization, using a valid and reliable culture assessment. A valid culture assessment should be measuring the common expectations of the members in an organization – not how they feel or their level of satisfaction. A reliable assessment is one where people don’t have to guess at what they should be answering. Before purchasing an assessment, ask to see the validity and reliability research. If the survey is cheap, it probably has not been tested.

Once you have measured and understand your culture, develop strategies to improve it.  Strategies will probably involve some form of leadership training—but could also involve improving your Human Resources Management Systems (and how managers use them) and/or changing job designs and structures. Change initiatives should begin with making sure your mission, values and philosophies reflect what you want your culture to ideally be.

The good news is that culture can be improved. Organizations that have embarked on a culture journey have realized all sorts of outcome improvements – from better customer relations to reduced employee turnover. A more engaged workforce and significant productivity improvements are not uncommon. But it all starts with understanding what your culture is and what the ramifications of it are.

Allan M. Stewart, B.Com., MBA.
President, Human Synergistics Canada
Human Synergistics International has been assessing organizational culture for over 30 years, using the Organizational Culture Inventory® (OCI). The OCI is one of the most respected culture assessment instruments in the world. Allan Stewart is considered a leading expert on Organizational Behaviour and Culture.  [hyperlink: www.hscanada.ca]