Organisational culture strategies: Which one is right for your business?

April | People, Structures & Processes | Article

What is organisational culture?

The culture of an organisation can be loosely defined as: “How we do things around here”. It is the patterns of behaviour that are encouraged, discouraged, or tolerated by people and systems over time.

“The values and behaviours that contribute to the unique social and psychological environment of an organisation are what is referred to as organisational culture”.

Organisational culture includes an organisation’s expectations, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.

Also known as corporate culture, it’s shown in:

  1. The ways the organisation conducts its business, treats its employees, customers, and the wider community
  2. The extent to which freedom is allowed in decision making, developing new ideas, and personal expression
  3. How power and information flow through its hierarchy
  4. How committed employees are towards collective objectives.¹

Australian Human Resources Institute

When strong, the culture will be clearly defined in mission purpose and values, and well understood by everyone in the organisation from top to bottom.

In this article, we describe how you can better identify and understand and measure your own organisational culture, the warning signs of an unhealthy culture, how to approach shaping your culture strategy and we give three examples of contemporary cultures.

Why is Culture Important?

Peter Drucker is attributed with saying “Culture eats strategy for breakfast.”

As the Covid pandemic continues to impact and upend the world’s economy, bringing chaos, tragedy as well as surprises, we have seen many organisations fall whilst others have thrived. Culture has been put to the test, with the disparity between what companies say they do and the reality of how they responded to their customers and their staff in the face of change, leading to a greater internal focus on culture than ever before.

Leaders are now asking themselves “Are our choices and actions right now reflecting our culture, and the purpose and values that define us?”

Employees now have a new context, especially those that had to ‘hack’ their own solutions, and organisations will need to understand how to support and engage a workforce that is seeking more transparency, agility, and balance.

A culture can be strong, but not always in the right ways if expectations on behaviours and ways of working are not managed. Teams that allow borderline behaviours to go unchecked in effect ‘condone’ these behaviours, which can spread across teams, and throughout an organisation. Good people leave, and only the most resilient or desperate remain, whilst the cost of staff turnover increases and morale decreases. With sites such as seek, Glassdoor and Slack, potential talent are one click away from previous employee company reviews.

Culture can also be shaped intentionally or evolve within an organisation especially through behaviours that are encouraged or ignored.

A strong culture delivers the following benefits:

  • Improved organisational reputation: which benefits current and attracts future investors/ funding, attracts suppliers and provides the ability to gain a market edge.
  • Increased sense of purpose and belonging of employees.
  • Easier recruitment and selection for the right ‘fit’.
  • Being known as an employer of choice, and attracting talent, especially when there are labour shortages.
  • People know how to behave and relate to each other and customers, and how to respond to situations in a way that aligns with the values of the organisation.
  • Systems – including information systems, targets, and performance systems, and symbols such as celebrations, branding, benefits, and common language are aligned and drive performance.

So how do you make sure that you are setting the right cultural compass for your organisation?

First, you need to understand your current culture.

What is your culture, now?

We are often asked to measure culture which can be achieved through a number of tools, including employee surveys, customer feedback, and other culture strategy measures.

I often encourage people to describe a place where they have worked in one or two words. For many, this is easy and some descriptors include “A Family” “Purposeful” “Focussed” and even “Toxic” “Fear driven” and “Blame”. When asked to explain why this particular word was used a description will follow of behaviours or of internal systems or [processes. 

Culture is often defined by the worst behaviour a leader accepts. It’s hard for leaders to acknowledge problems with their company culture and see how they have personally contributed to the culture in their workplace. 

The Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry identified that a focus on results-driven behaviours and cultures to meet KPIs and targets lost the importance and focus on the customer, in some cases with alarming consequences. The outcome has been significant reputational and financial damage for the industry and a complete review of systems and internal practices.  The culture required a massive shift – from an underlying “high-performance culture” to one that demonstrates values of ethical behaviour and transparency.

Danger! Toxic culture ahead.

Observing just a few of the warning signs below will indicate that your culture may be sick.

  1. Employees don’t smile, talk, joke, or re-enforce each other. There is no ‘community’, and staff who are non-traditional thinkers don’t last long.
  2. Rules and policies are more important than good judgement, people are afraid of getting in trouble for breaking the rules.
  3. Managers and employees exist as separate groups, don’t interact, with no give and take, or collaboration.
  4. Leaders say one thing and do another – even when the values are up on the wall.
  5. There is a focus on status, titles, job descriptions and perks.  Power is held up as important, rather than trust, mission, purpose and teamwork. 
  6. Employees have very little freedom in performing their jobs, where procedures are spelt out for them, and they are rewarded for hitting goals and following rules, not for questioning or innovating.
  7. There is a lack of ongoing regular communication on what, why and how the organisation is tracking, and the informal grapevine is more effective than any type of official company communication
  8. Borderline or bad behaviours are tolerated, and no one manages these, or even speaks up, as its ‘too hard’ or “that’s just Bob”.
  9. There is low care for the customer: their feedback is not sought, or not taken seriously, and there are no reward systems in place for customer service, only sales.
  10. You can feel the fear: everyone is concerned or on edge about being put in the spotlight, found out for a mistake, or whether they are “liked’. Common in a ‘blame’ culture. 

What are the Cultural Strategy Trends for 2021?

Here are three Cultural Strategies that are trending right now:

The Digital Culture

If your organisation seeks to drive successful transformation in a digital world you will want to have the following focus for your cultural strategy:

  • Your purpose will need to clearly articulate how digital transformation adds value to your customers and the role your employees will play in delivering that value.
  • Technology must be the enabler: to support the business and your people to deliver outcomes.
  • Your employees are trained, have the skills and the resources/time they need to deliver on their work. 
  • Your systems and process support your employees to be more mobile and agile and encourage increased flexibility and adaptability. They can work from anywhere, stay connected and collaborate more easily.
  • Your employees listen to both customers and employees: they share information transparently.
  • Your recognition and reward are given to teams for cross-functional results as well as to individuals.
  • Your employees are encouraged to take calculated risks, fail fast, learn together and focus on solutions, not problems. Debriefing is learning not blaming.

Beware: A digital culture may be less open to diversity, plus maintaining up to date current digital knowledge and expertise is costly in time and resources.

The Culture of Innovation

If your organisation is founded on innovation and creativity, or if your business is becoming too complex, where decision making is bogged down or too slow, and there is a need to be able to pivot quickly to meet a changing marketplace, supporting innovation is critical. To support the ability to adapt, and improve, you will be looking to introduce the following cultural strategies:  

  • Your structure will be designed to encourage delegated authority and empowerment rather than following a fixed hierarchy.
  • You will encourage experimentation, and mistakes will be viewed as opportunities for development.
  • Learning is encouraged, whether by mentoring by ‘elders’ or brainstorming with graduates, to share new practices or trends and conduct post-implementation reviews.
  • You allocate/assign resources and time to ‘think tanks’ or development of innovative ideas and include staff representing a cross-section of your organisation.
  • Your staff are encouraged to speak their mind, ask questions and raise alternatives
  • Diversity of culture, ethnicity, age, gender, etc. etc. etc. is evident and encouraged.

Beware: A culture of innovation requires a strong transparent process of assessment and decision making of which ideas proceed to test and implementation and which are discarded without negatively impacting individual or team morale.

The Customer-Centric Culture

If your organisation is faced with increased competition, rapidly changing consumer buying patterns, and a multitude of review blogs, to remain competitive and contemporary, you will want to design and embed a customer-centric culture strategy embracing the following attributes:

  • An organisational structure to maximise flexibility and responsiveness to your different customer groups.
  • You will build practices to ensure extensive and ongoing customer research and satisfaction is measured 
  • The success of customer satisfaction ranks equally if not higher than sales targets and financial performance.
  • Training is extensive with staff, not customer-facing until fully trained and all staff are rotated through customer-facing positions.
  • Customers are the reference point for when and how decisions are made.
  • Investment is prioritised for initiatives that improve customer experience and prepare for their future needs.
  • Individuals “go the extra mile to satisfy customers”, with behaviours of listening and relating, as well as supporting and delivering to colleagues, recognised and rewarded.

Beware: The customer is not always right…a customer-centric culture will need to include clear measures and indicators for when a customer relationship is no longer profitable or aligned to your overarching strategy or individual customer behaviour is not in line with your organisational values.

So how do you shape your culture strategy? 

You can have a culture by design, but it takes some planning and effort so we have included some simple steps below to follow to achieve this.

1. Diagnose your Current culture and Identify your Desired Future Culture

    • Seek some measures to understand where you are now: these can include cultural assessments, staff surveys and customer surveys
    • Understand where you want to be; what are the current values within the organisation and are they being ‘lived’?
    • Understand what shifts you need to get there: use your surveys and tools and involve your people in identifying where effort is required.

2.  Develop your Plan

    • Identify actions and initiatives to shape your culture and include these in your strategy, operational plans, or development plans.
    • Use your diagnosis to measure your culture, which can be monitored over time. Set timeframes to implement actions, and re-measure your culture… regularly.
    • Communicate your plan, and expectations, and report on how you are progressing to employees. Regularly check in on progress and ensure your leaders are clear and aligned to outcomes.

3. Lead Culture: Turn your managers into role models

    • Consistency comes from the top. Making sure your leaders and managers model the behaviours and share the core values is key to being authentic and sets the tone for behaviour across the organisation.
    • Use feedback tools that include assessment of values and behaviours.
    • Facilitate workshops within teams, where leaders articulate and work with their teams on what ‘good’ looks like.

4. Activate and Embed Culture

    • Culture is maintained through rituals: identify the rituals you have that define your culture or create rituals that build what makes you unique.
    • Identify development needs or gaps in capabilities required to support your culture and facilitate and support this learning.
    • Continue to coach your leaders and influencers – including how they can develop others through mentoring or buddy relationships.
    • Recognise and reward behaviours and ways of working that demonstrate your values.
    • Communicate, using the cultural ‘vernacular’ that your culture identifies with, and communicate often.

So what now?

Being intentional about your culture matters now more than ever. 

Get a good independent understanding of your current culture and determine if this is what you want. 

Will your current culture get you where you want to be as an organisation?”

If it is then how do you bottle it, ensuring as you grow the same behaviours and values are upheld.

If your current culture is not what you want or will not support the organisation to achieve its mission, it is time to redesign your culture and shift your people and systems to align with your purpose and values.