Organizational Culture: What it is, why it’s important, and how you can use it to outperform the competition
09/07/2020

Corry
Robertson

If you don’t know what organizational culture means, you’re not alone.

A few years ago, I was leading a group coaching session for a team of senior executives. 

They were a newly formed team of 16, all men, all brilliant in their fields, all what I would call geniuses of technology.

After their new boss ‘acquired’ the companies they worked for, these guys now found themselves working closely together as colleagues, but their previous experience was from 3 very different places:

  • One group was the original one. Their boss, the founder, was an entrepreneur who started in his garage and handpicked and personally trained each and every employee until he started growing by acquisition.
  • The second group was a division of a major corporation that was sold off when it divested assets. This group was used to a way of working that included a rigid hierarchy, reporting processes that were complex and detailed, and well documented procedures.
  • The third group was a unionized organization that was struggling to survive and sold in its entirety. This group had worked together for many years, some for decades and they were used to managing unionized employees. But now, there was no union and there were many, many new players in the mix.

My first activity was to guide them through the process of forming as a team, to unite around common values because leadership has everything to do with values. 

My intention was to bring clarity to the culture that they now found themselves in vs the ones that they had come from, find common ground and to discuss what they wanted to build together.

The conversation was slow to take hold. 

The response to my questions and prompts was silence. I could hear the crickets

A professional coach’s job is to open space for frank, honest conversation and hold it open, even as things get uncomfortable. Especially as things get uncomfortable.

The ‘discomfort zone’ (to borrow a term from Marcia Reynolds’ latest book by the same title) is where we can really start to understand where we are at and where we need to start. 

The professional coach is comfortable with the reality that we don’t know how the conversation will start or what will emerge from it so I was OK with the crickets because I knew that something would soon emerge which would indicate where we were starting from.

And emerge it did with this question:

“Corry. Can you clarify something for me, maybe for the others as well? When you ask us about our organizational culture, do you want to know about our ethnic backgrounds? Do you want to know how many Jews, Arabs and Christians work here? Do you want to know what countries we were born in?”

From around the table came many physical and vocal gestures that supported him in his need for clarity.

With that question, I knew where we stood.

This team of brilliant men, geniuses responsible for some of the most important technology of our time, did not know that an organization has a culture. They had never even heard of it before.

Fair enough: to their understanding, culture was a private matter based on one’s religious and ethnic background. Fair enough because that was the only context of culture that they had ever considered and on that basis, they found my question to be off-putting and confusing.

It had never been their job to know about organizational culture. It never mattered to them before because it was never an issue.

Until my question, not one of those men, not even the founder, knew the source of the conflict, bitterness and interpersonal toxicity that was growing between them, dividing them, slowing them down and draining their energy, making them hate their workday.

And so, with this group of men, we began at the beginning.

What is organizational culture?

Organizational culture, or work culture, is defined by the business dictionary as “The values and behaviours that contribute to the unique social and psychological environment of an organization”

To boil that down, simply put, if I wanted to find out about your culture, I would ask your employees: What is it like to work here? 

When they describe that, they are describing your organizational culture.

How is organizational culture formed?

Culture is shaped by the founder unconsciously, on purpose, or a blend of the two.

Organizational culture is rooted in the founder’s human values, ideals about what is good or bad and personal beliefs about the world. 

Values can be described as the principles behind what makes a person tick. Uncover why a person behaves the way they do and you’ll expose their value system. Consciously or not, values guide a person’s decisions based on what they think is right or wrong. 

Combined, values have a major influence on behaviour and attitude and serve as a moral compass in all situations. 

Ask yourself:

  • What is my belief about earning money? 
  • How do I talk to my employees
  • What do I expect from my workers? 
  • How much do I share and how much do I keep for myself
  • How hard do I work
  • When am I 100% honest and when am I cautious with the truth?

Your answers to these questions are rooted in your values.

Values set shared expectations for how to behave, guide how to process experiences, and help us decide which philosophies to embrace.

What are some examples of organizational culture?

We can see and feel organizational culture the moment we walk into an office by noticing things like:

  • How people are dressed
  • How fast or slowly they are moving around
  • The office furnishings and condition of the space. Is the area that the clients experience designed to be better than the area that employees experience? 
  • How people are greeted when they arrive. Are employees, suppliers and clients treated differently? If so, how and why?

Remotely, organizational culture can be seen in:

  • The website
  • How long it takes for someone to answer the phone and return calls
  • The quality of emails and marketing messages  

Internally, it’s also shown in:

  • How it treats its employees, customers, and suppliers. For example, cutthroat or win-win?
  • The way in which it perceives its responsibility to the environment, the community and the world at large
  • How much freedom the employees are allowed in decision making, developing new ideas, and speaking up
  • How the hierarchy is designed and how people are expected to treat each other throughout the ranks

Why is organizational culture important?

Your values govern your choices and behaviours which directly impact the ‘vibe’ at your company.

This influence is unspoken and unwritten. It ‘just is’ , and no one can explain why.

Culture affects:

  • Employee engagement
  • Ability to recruit and retain employees
  • Productivity
  • Performance 
  • Customer care and service –  leading to loyalty, or not
  • Product quality and safety
  • Attendance and punctuality
  • The impact you have on the environment. 

Culture is first set by the founder, then the early employees, then by the next generation of the workforce. Long after the originals have moved on or retired, the culture will be their eternal legacy unless there is a conscious and strategic plan to change it.

According to a recent Glassdoor study, 77% of adults would evaluate a company’s culture before applying to an open position. Perhaps even more impactful, 56% rank an organization’s company culture as more important than compensation.

Organizational Culture can make or break your business strategy. 

A strong culture directly impacts the bottom line. In fact, it is the only sustainable competitive advantage because it cannot be duplicated – unlike a service, product, price point, or delivery system.

Conclusion

A negative work culture is the cause for the demise of any organization who cannot get ahead of this destructive wildfire. 

Employees who are miserable at work treat clients badly. The lower down the ranks this misery exists, the more it affects the client day to day experience with the company. And the company reputation is damaged as clients leave.

This negative work culture is not sparked because employees are bad or unlikeable people. None of them are unintelligent, they don’t lack skills or talent, they’re not incompetent or with sinister intent to cause disruption.

The ignition is caused by culture clash. Culture creates joy or misery at work. It affects the employee’s ability to thrive and therefore, the company’s ability to thrive.

When companies are struggling with costly difficulties like losing clients or managing challenging ones, poor productivity, low employee engagement, high turnover, or difficult office dynamics – a winning organizational culture is the key to success.

Culture matters for corporate performance.

Want to read more about organizational culture? Try these articles:
Employee Engagement Strategies
6 Core Work Culture Values for Tech Leaders
Developing Tech employees into tech managers:  Finding the path to success

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Author:  Corry Robertson

Sought-after tech industry culture expert, Corry Robertson has been helping leaders turbocharge employee retention and performance for over 20 years.

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