What leaders need to know about organizational culture – Warrick - 2017 - Article

What is organizational culture?

Culture can be described as the beliefs, values, attitudes, behaviors, and practices that are characteristics of a group of people. The term group can refer to a whole organization or any group of people of any size. Groups of people are likely to form specific cultures. Organizational culture refers in a broad sense to the culture of a whole organization or any unit of people working together within the organization. It describes the environment in which people work and the influence it has on how they think, act, and experience work. Culture is increasingly becoming a concern for skilled leaders, because of the significant role culture can play in an organization's success or failure. 

How does organizational culture influence performance?

Since the 1980s a lot of research has been done examining the effects of organizational cultures on performance and other factors. Culture can, among many other factors, influence performance, morale, loyalty, job satisfaction, turnover, and employee attitudes and motivation. Healthy cultures seem to be the result of effective leadership and management, whereas unhealthy cultures seem to be caused by ineffective leadership and management. There are different opinions as to whether culture is the cause or the result of organization practices. The reality is however that culture affects how an organization is run and organization practises affect organizational culture. Both affect the other and both need attention to achieve the best results. High performance cultures can only be achieved by running an organization well, and running and organization well requires effort by the leaders in building and sustaining culture. 

What are the characteristics of high performance cultures?

In high performance cultures, leaders are skilled and admired. They build organizations that achieve great results and take good care of their employees and their customers, and are committed to excellence and ethics. They tend to have a clear vision, mission, goals, and strategy. The culture is driven by core values that are used to make decisions. The roles and responsibilities are clear and there is a strong commitment to empowering and developing people. Communication is open, straightforward, and transparent. Teamwork, collaboration, and involvement are all important. There exists an emphasis on constant improvement and the use of new knowledge. The culture has a willingness to change, adapt, and learn from successes and mistakes, take reasonable risks, and try new things. 

What are the characteristics of low performance cultures?

In low performance cultures, leaders don´t provide a lot of leadership and are generally not admired nor trusted. They do not try to engage and involve their employees. Their vision, mission, goals, and strategy tend to be unclear or non-existent. There is no commitment to excellence and the ethics are questionable. The roles and responsibilities tend to be unclear and there is very little to no interest in developing the capabilities of people. The work environment tends to be negative, tense, and stressful. Communication is guarded and people are reluctant to be open and straightforward. There is minimal teamwork and collaboration and there tends to be top-down decision making. Change is poorly planned and resisted, there is little learning from successes and mistakes, and risks tend to be avoided. 

What are the visible and invisible factors that define culture? 

Culture can be viewed on two levels, namely the visible and the invisible level. The visible level is observable and refers to dress, office layout, office design, and an emphasis on technology. It can also refer to leadership style, the nature of the work environment, how people are treated, and how decisions are made and implemented. The invisible level includes underlying assumptions, deep beliefs, and expressed values (consciously held convictions, clearly stated or practiced, that influence the behavior of group members),. 

What are the internal and external factors that influence culture?

Internal and external circumstances can influence culture. External circumstances include, among other things, government regulations, lawsuits, or acquisition by another company. Internal circumstances may include organizational structure, budgets, leadership styles, changes in leadership, or key internal decisions. Important is also the group history as it can provide insight into the traditions and dynamics that should be kept or those that need to change. 

How do (de)valued behaviors influence organizational culture?

People respond to behaviors that are valued and rewarded and tend to avoid behaviors that are not valued or rewarded. It is important for a leader to examine the reward system of the organization, as it may be possible that the rewarded behaviors actually encourage self-serving actions and discourage teamwork. It can be as subtle as not noticing or rewarding extra effort by the employees. It is also important to identify if there are any influential group members and what their behaviors are. A group member can have a positive or negative influence on the culture of a group. It is important for a leader to select the people who fit with the desired culture, and to correct behaviors that undermine the desired culture. 

What are the guidelines for building and sustaining organizational cultures?

The following guidelines are identified:

• Strategy and culture should be important leadership priorities and leaders should set the right example. 
• A clear understanding of the current culture so the strengths can be reinforced and any weaknesses or inconsistencies can be addressed. 
• Identify, communicate, educate, and engage employees in the cultural ideals.
• Role model desired behaviors (especially the leader should stick to his words and give the right example or he may not be taken seriously). 
• Recruit and develop for culture. Culture fit should be as important as skills and experience. There should be careful selection, orientation programs, and training and development of current employees. 
• Consistency between strategy and culture (decisions should be in line with the desired values). 
• Desired behaviors and practices should be recognized and rewarded. 
• Use symbols (actions, objects, or events that communicate meaning), ceremonies (planned activities that are meaningful), socialization (making clear the kinds of behaviors and attitudes that will help them succeed), and stories (narratives that reinforce the cultural values) to reinforce culture. 
• Appoint a culture team to monitor the culture throughout the organization, advise the leadership, and help implement ways to strengthen the culture. 
• Monitor and manage the culture.