What is organizational culture? And, how is it linked to performance? Research shows that companies with great organizational cultures outperform their competitors. For example, James Heskett, professor at Harvard Business School and author of ‘Culture Cycle’ found that companies with ‘remarkable’ cultures performed 20% to 30% better. Why? Because in these companies employees were happier, more productive, and less likely to leave. In this article, I will share some practical tips on how to create a great organizational culture that drives performance.
What is Organizational Culture?
Because the concept of ‘culture’ is abstract, coming up with a universal definition can be tricky. A good starting point in understanding organizational culture is Edgar Schein’s definition, described in his book Organizational Culture and Leadership. Essentially, organizational culture is the set of norms, rules and values that drive our behavior both individually and collectively. Think of it as the force that shapes how we perceive the world around us, and how we interact with one another. And, since culture impacts behavior, it directly affects performance.
Improving Organizational Culture to Drive Performance
Having worked in various industries and companies of different sizes, I’ve experienced both the good and the bad when it comes to culture. Because organizational culture evolves over time, if left unchecked, it can become a negative force. And, when this happens, employee engagement and performance begin to suffer.
But, the good news is with the right change management strategy, you can successfully transform and improve organizational culture. Here’s how you can do this.
Start by Assessing the Organizational Culture
Assessing the culture in your organization is a crucial FIRST step in guaranteeing success. Why? Because this will identify the areas for improvement. A more in-depth analysis will find the strengths and the positive culture aspects you should keep. Most importantly, the results from a thorough assessment will help you set a strategy, concrete objectives, and a plan of action for transforming your culture.
How to Assess Organizational Culture
There are a number of ways to assess organizational culture. Depending on the resources you have on hand and your goal, you can use a combination of individual interviews, focus groups and a customized employee survey. You can also use a research-based assessment tool like the Organizational Culture Assessment Instrument (OCAI) with the help of an expert.
Build a Foundation for a Positive Organizational Culture
Once you’ve completed an organizational culture assessment, you’ll have a better idea of where to focus first. For example, most successful companies, whether big or small, have certain elements in their culture that drive employee happiness and increase productivity. So, a good place to start is to put in place some of these key building blocks:
- Passionate Leaders Focused on People: Do you have the right leaders in place? When recruiting for leadership positions, hire leaders who are passionate and good at leading and developing people.
- Clear Purpose: Having a vision and mission is not enough. The fact is, what sets successful companies apart is their clear sense of ‘purpose’. ‘Purpose’ provides focus, and increases performance. So, make sure your employees know the company purpose.
- Meaningful Work: For employees to feel engaged, they need to have meaningful work. Start by telling everyone how their jobs are fulfilling the company’s higher purpose.
- Inclusion & Authenticity: Create a work environment, where inclusion and authenticity are encouraged. Inclusion and authenticity are crucial to driving creativity and innovation. Why? Because without the pressure to ‘fit in’, we participate and contribute our ideas more freely.
- Empowered Teams: Does your staff have the necessary support, training and tools to make decisions? Make sure everyone is well trained to do their jobs. And, give them the freedom they need to make decisions in their day-to-day jobs.
- Transparent Communication: Sometimes, even with the best intentions, we forget to communicate critical information to our people, causing frustration and loss in productivity. Make sure everyone within your company has all the information they need to do their jobs well.
- Innovative Physical Work Space: A company’s physical work space reflects its organizational culture and directly impacts the way people interact with one another. For example, if you’re looking to create a culture that drives creativity, teamwork and innovation provide an activity based work space instead of closed offices and work cubicles.
Want to learn more on how to take your company to the next level by transforming your company culture? Connect with me for more insights, and a complimentary strategy session. Let’s work together.