An organization's culture defines the tenor of everything that it does. Culture governs values and strategy. It is pervasive and resilient – difficult to change, and often outlasts the founders. Many top executives put culture foremost, and for good reason. Here is a look at how setting the right culture can be a recipe for success.
Culture is all-important
Organizational culture represents a system of shared beliefs that are held by its founders. Culture directly affects the experience of all stakeholders, including employees. In a way this collective set of beliefs is what gives an organization its distinct personality.
The culture in an organization flows from the top. The founders' beliefs define whether the organization values innovation, and if long term success is a priority over short term profits. Culture is the basis of a company’s core values. It defines every aspect of employee behavior. A strong and positive organizational culture ensures that employees act in uniform, predictable, and compliant ways. Culture reinforces a sense of identity, and fosters enterprise-wide commitment. A 2016 report by Deloitte UK observed that 82% of HR managers view culture as a competitive advantage.
The right culture
It is not always easy to recognize or quantify organizational culture. Yet, a strong culture resonates throughout the workforce. A 2014 report by Oxford University researchers emphasizes the need to create a single dominant culture that supersedes smaller sub-cultures in an organization. Conversely if opinions about the company’s mission, vision, and values vary broadly, it indicates that the leadership has failed to communicate culture strongly enough.
According to a 2012 survey by the Academy of Management a positive culture thrives in an ethical climate. Managers and supervisors must share positive philosophies with teams and individual employees. It behooves organizations to have well-defined codes of ethics. Conducting regular sessions on ethics training can help. These should be reinforced by rewarding employees for ethical conduct and swiftly punishing unethical acts. In 2017 the Journal of Personnel Psychology reported that powerful organizational cultures should center on a healthy mix of innovation, teamwork, attention to detail, and self-governance.
An employee's perception of a firm's culture begins with the recruitment process. Organizations must assess candidates not only on their potential to perform, but also on their cultural fit. A 2013 report by the British Council noted that communication skills and cultural sensitivity support a positive corporate culture.
Great organizational cultures are formed around individual strengths. Every person has areas of improvement. Managers ought to focus on elevating the natural talents of employees. This can be done through cross-training, offering more job autonomy, and soliciting ideas on new ways of doing things. In 2018 the Chartered Institute of Secretaries and Administrators pointed out the need for training employees on skills that support and reinforce a company’s culture. Business owners can foster excellence by adopting motivational models that rely on rewards more than punishments. Extrinsic rewards such as raises and bonuses are vital. However, smaller rewards like appreciation and recognition can have a significant positive impact on job satisfaction too.
Socialization is another means of reinforcing culture. Today’s workforce is characterized by diversity. Even small businesses hire overseas employees to work remotely, and pay them via international money transfers. People arrive at organizations with pre-conceived ideas. Onboarding activities must aim to align the expectations of new hires with ground realities. Some form of social support from superiors and co-workers can go a long way in raising awareness and acceptance for a company's culture.
Positive culture brings growth
Organizational culture can have far reaching effects. Motivated employees are less likely to leave, leading to lower employee turnover and better talent retention. The right culture can accelerate innovations. For example, Brighton-based marketing agency Propellernet gives its employees 12 ‘personal development’ days for them to generate new ideas.
Negative culture fails
Book and music retailer Borders failed to thrive in digital markets, and was eventually taken over by Barnes & Noble. This shows that not having a culture of adaptability and innovation can lead to failure.
Culture is a pervasive force that continues to grow over time. Unfortunately this quality also applies to unethical and harmful practices. For instance, in 2012 Barclays Bank was embroiled in the Libor scandal. Incriminating information was provided by whistle blowers who revealed that the organization had a ‘culture of fear’ which dissuaded them from speaking out sooner.
These examples prove that positive culture creates paths to success while detrimental culture leads to spectacular failure. Culture takes a long time to build, and longer to change. When setting a culture for your startup, be sure to give it ample consideration, and set the right one.
About the author:
Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.