For decades, we've all heard that "culture matters". The question is "why?"
I believe that "culture eats strategy for lunch". And I also believe that "culture can make or break you."
Because ultimately, it's your organizational culture that can give you a true competitive advantage, align your workforce, help you achieve your strategy, and deliver a consistent, outstanding customer experience.
What I've found hard in my consulting career is defining culture so that leaders can understand it, and can CHANGE it if necessary.
Culture is elusive, it's intangible, it's soft, it's touchy-feely. But if you have an unhealthy culture, the organization will face problems in talent acquisition, retention, productivity, and even revenue.
Getting a feel for organizational culture
When we discuss culture, I often tell students that you can "feel" it when you walk into an organization, either as an employee or a customer. So let me paint you a picture.
A candidate arrives for a job interview and walks into a company's reception area. The receptionist is dressed in business attire; the waiting room is stark, without much decoration. The receptionist is formal in her communication and attention to process. She asks them sign in, wear a badge, take a seat and wait. The interviewer comes to escort the candidate to her office through a maze of beige, tall cubicles. There are no decorations, no pictures. Everyone has their head down and is working very quietly.
This snapshot should tell the candidate a story about the culture at this organization. The company is process driven, formal, task oriented and very generic.
I can't tell you if that culture is good or bad for that particular company, but I do know, I don't want to work there.
So what is culture?
Culture is spoken and nonverbal. Culture is how things are done at the company. Culture is how we do our work. Culture is how we communicate. Culture is how we treat people.
"Organizational culture is the sum of values and rituals which serve as ‘glue' to integrate the members of the organization." Richard Perrin
The importance of culture
According to Alyssa J. Rapp, founder and CEO of Inc., "Culture holds the power to inspire employees to move themselves, to move mountains, and to support each other in a way that, when done right, is truly irreplaceable. And if you top it off with market-leading products supported by great technology, culture seems to be the most defensible competitive advantage of them all."
In the U.S. we think of Starbucks, Nordstrom's, Chik-Fil-A and Publix. Each is famous for their culture; it gives them a distinct competitive advantage in their markets.
How to create an organizational culture that sets you apart
So, now we know what it is and its importance, how
do we change culture in a way that is deliberate and that makes it a
competitive advantage for the organization?
The first step in creating an organizational culture that sets the company apart is to understand the current culture and compare that to where the company is going strategically.
If the company is embarking on a new business model, a dramatic change in strategy or mergers and acquisitions, employees will need to think and act differently. Since, culture has a strong influence on behavior and vice versa, culture has to be considered during these proposed changes.
Once you've identified the desired cultural behaviors, it becomes imperative that you align them with recruiting, performance management, succession planning and workforce development.
Then, once you've created a culture that's supporting the business objectives, the hard part comes. You need to continually monitor your organizational culture to ensure it doesn't slip back to the "old legacy" culture. By measuring certain aspects of the culture and the employee experience, companies can keep a pulse on what is changing and why.
Leadership is critical
Leadership has a major responsibility in shaping culture as behaviors matter and employees model behavior that they observe. And I see more and more leaders jumping on the culture train, recognizing the importance of culture.
Leaders that have worked for several companies understand that culture can be a headwind, hindering progress, or a tailwind that pushes progress. It's up to the leadership team to decide which way that wind is blowing.
The ultimate goal? Organizational culture that supports your strategy
A true competitive advantage exists when culture is aligned with strategy, leadership models the right behaviors, and employees deliver excellent experiences to customers on a consistent basis.
That's why culture matters.