The what and why of organisational culture
You may be familiar with the saying ‘culture eats strategy for lunch’. The phrase has become a bit overused but there’s truth in it. For us, what it means is that whatever strategy you want your organisation to deliver, if your culture isn’t aligned with that strategy, it is likely to undermine your organisation achieving it but it will be hard to figure out exactly why you’re not hitting your objectives.
On the positive side, Tony Hsieh, Founder and Former CEO of Zappos.com said that ‘‘If you get the culture right, most of the other stuff will just take care of itself,” which is less culture eating strategy and more like your strategy being supercharged by your culture.
So if culture is that important, then what is culture exactly and why is it so difficult to put your finger on? Ben Schneider, prominent culture researcher and practitioner, said that “culture is like Jello, it’s difficult to nail to the wall”. However, Schneider and many management specialists like him have tried to define and quantify culture, with the aim of helping organizations to do it for themselves.
When organizations do take an active role in managing and developing their cultures, they deliver greater value for their employees, customers, shareholders, end users, even wider society. Kotter and Heskett (1992), for example, examined financial performance of 207 major companies over an 11 year period in 22 different industries. They found that companies that managed their culture well: saw revenue increases of 682% versus 166% for the companies that did not manage their cultures well; stock price increases of 901% versus 74%; net income increases of 756% versus 1%.
There are lots of definitions of culture around but one of the punchiest is Katzenbach’s and Harshak’s (2011):
“Culture is a set of deeply embedded, self-reinforcing behaviours, beliefs, and mindsets that determine ‘how we do things around here’.”
Katzenbach and Harshak (2011)
In our experience, analysing your organization’s culture today and creating a ‘future state’ picture of the culture you want to develop will help you answer questions such as:
- What is holding us back from reaching our objectives?
- How can we become more innovative and agile in the way we operate?
- How can we become employer of choice in our sector?
- How can we make sure our people really engage with what we are trying to do?
We find that most people, when starting off on their journey towards understanding and managing their culture, have some early questions. So here’s our view on several of the most frequently asked questions around culture.
Where does culture come from? What influences it?
The most formative influence over an organization’s culture are it’s founder/s and early leaders. By what they do, rather than what they say, by what they pay attention to, measure and monitor, the founders and leaders are sending out clear messages to their early followers about their expectations, their values, their way of seeing the world, and the organization’s place in it.
As the organization develops and matures, employees become a major shaping influence – the carriers of cultural messages through behaviour, storytelling, how they interpret important events for the organization. And the context in which the organization operates is also an ongoing influence as that will affect its chances of surviving and thriving. So when looking for answers about culture, you need to explore the perspectives of the founders, the leaders and employees as well as understanding its context.
How can you measure culture?
Some commentators say that you can’t measure culture and it’s true that if the only way you intend to assess culture is through a quick-fire questionnaire, there’s only so much you’ll find out. However, in our experience, culture can be measured and in fact needs to be measured if an organisation is to be able to assess how it’s doing in its journey towards a desired future culture.
At its deepest, most fundamental level, culture can be tricky to pinpoint, but it’s important that it is. We find that metaphors can be particularly helpful here as this allows people to communicate something at an emotional level that is often difficult to describe intellectually. Metaphors like family, clan, machine, rollercoaster and white water rafting are just some that we’ve heard as start points to get under the skin of an organisation’s culture, but there are often much more precise and descriptive metaphors that really nail it, once you give people a method to go there.
“We find that metaphors can be particularly helpful here as this allows people to communicate something at an emotional level that is often difficult to describe intellectually.”
Paul Brewerton — YC Co Founder
Language is another a cornerstone of cultural research. How do people describe the organisation they work for, what words do they choose and what do those words mean to them? Methods such as focus groups, interviews, even open-ended questionnaire questions, when carefully constructed, can pull out some amazing insights about an organisation’s culture through the language that employees use.
Finally, for perceptions and attitudes, questionnaires have a rightful place in cultural measurement. They just need to contain questions that have really been thought about…so that they have the best chance of getting to the heart of an organisation’s culture and how people feel about it.
How can you change a culture?
There are no quick fixes to changing an organisation’s culture. Quick wins, maybe. But not quick fixes. We have four tips here to get your thinking started:
Following on from assessing your ‘current state’ culture, you may find that there’s a disconnect between the fundamentals of your current culture and where you want to head with it. So, start at the foundational level – ask yourself what is the organization’s truth and does it need to change? Truth drives beliefs, beliefs drive values, values drive behaviour and behaviour is what the world sees, including your customers. Make sure there is alignment right the way through.
Part of that alignment is being clear on the behaviours you want to see that will reinforce the new culture. Once you have these behaviours documented, you can weave them through your people processes: recruitment, performance management, promotion and so on. In this way, your people will understand what will be rewarded in the new culture and what is no longer ok.
Leverage what’s already working. We’ve yet to work with an organisation where literally everything needed to be rewired culturally. There are always existent strength areas which can provide firm foundations for your new culture. So be clear what you want to keep as well as what you want to leave behind.
Make sure your people understand the what, the why and the how of the changes required (we sometimes talk about this as the head, heart and hands approach). So what’s the business case for change, how can people connect with the change at emotional level and what will they need to do differently? You need to hit all three if you want to get off to a strong start and take your people with you. In the main, people resist change. Any change. Because it takes effort and pain to make changes in areas that you’re attached to or where you’ve got well established habits. So bringing people with you needs that three-pronged approach.
Organisational culture matters. It really matters. Don’t let its jello-like nature put you off, get some help and get analysing what culture you have right now and whether it’s what you need to get your strategy delivered.