“Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur. Develop a strong corporate culture first and foremost.”
– David Cummings, Co-founder of Pardot
The first step to culture improvement is defining the culture. Defining the culture of an organization presents several challenges. First, the people who are living the culture are immersed in it. It is very hard to get an objective view about the values and influences on a culture from within.
Secondly, culture truly is a blend of many different influences that are interacting at the same time. It is difficult to point to one problem and come up with a simple solution that will effect a desired change.
Finally, human beings tend to believe they are right, and they are resistant to change. It is our nature and part of our survival. To admit weaknesses, take risks, and innovate is difficult, especially for leaders.
There is no standard process for cultural analysis that can be used out of the box. Every culture improvement initiative needs to be customized because every organization is different and has their own unique structure and culture. Within large corporations, there are usually multiple sub-cultures in different divisions, functional areas, or geographic locations.
Using the example of a cultural portrait helps to break down the components for analysis into manageable areas and discover where to focus potential improvement efforts. For large organizations with sub-cultures, more than one portrait might be necessary to gain a view of the organizational family.
Discovering cultural influences requires conversations and input from multiple sources. Viewpoints need to be consolidated to create the most realistic representation. When painting the portrait, it is the conversations that are most important, not whether the picture is beautiful. Not all portraits are beautiful, but they should all be enlightening to the participants.
Stakeholders such as board members, owners, or stockholders are the outer border of the culture portrait. They provide the financial basis and high-level direction to the business. They function as the boundaries for the business. Stakeholders influence the culture of an organization through the decisions they make and actions they take. These actions and decisions impact the leaders, who are directly responsible for running the organization.
An organization’s mission, values and beliefs are the background of the culture portrait. These formal written statements provide the basis for expected goals, behavior and relationships within the organization. When determining the color and intensity of these backgrounds, consider how strong these guiding principles are and how often they are referenced when decisions are made.
Most organizations won’t be able to completely fill in the background since not everyone in the organization will adhere to the stated values.
A culture advisor helps the organization identify major gaps in the way values and beliefs manifest across the background of an organization.
Major gaps indicate cultural weaknesses in the organization’s beliefs and values. Cultural weakness can cause inconsistent communication and a lack of connection with customers and employees. If as the portrait emerges, your organization can’t confidently fill in a nearly solid background, it is time to focus on clearly articulating and or reinforcing your business mission, beliefs and values.
The industry environment of your business may dictate parts of your culture. How the business is structured and the processes in place might be required to engaged in this type of business.
Many industries are highly regulated by external governmental agencies. Laws require that industries follow certain protocols so that planes fly safely, medicines are approved, food is safe, and buildings don’t fall down.
Other industries have security or quality standards that are dictated by customer expectations for purity, safety, or durability. Customers expect their personal data to be protected and they expect the products they purchase to last a reasonable amount of time.
These are inescapable standards that will impact how people work and interact and how decisions are made.
‘How we do things around here’ not only includes how things are currently done, but the history of how rules, procedures, and processes have grown through tradition.
The established ways of doing things are both written and unwritten. Written documentation on how things are done usually exists within functional departments and within HR for personnel rules and processes. These documents are used to onboard new employees so that they will understand how to function in a new culture and not make costly mistakes.
The unwritten rules are more difficult. These are the expected behaviors around the way people interact and the processes that have evolved without formal incorporation into the written documentation. Unless there is a concerted effort to onboard new employees with the unwritten rules, they need to learn these by observation, questioning, and through trial and error. Analysis of procedural documentation and a comparison to how work actually gets done is part of determining the existing culture.
Over time, organizations build a history of successes and failures, and they celebrate their heroes. This information exists within the written archives and the verbal lore of the organization. Long standing companies may have historical documents and artifacts that are kept through generations. These tell a story of ‘who’ the organization has been from its inception and how it grew up.
There also might be significant events such as new inventions or changes in leadership that have altered the course of the culture. Looking at history can inform actions and behaviors that are rewarded and memorialized. Asking questions about the past in the context of culture helps identify the remnants of the historical culture that still exist and their impact within the present-day culture.
Employees are the substance of the culture and add infinite variety. How employees work together and treat each other exemplifies the beliefs and values — the essence of the culture.
Every person who is hired can influence the culture of an organization or team within an organization. They bring their own knowledge, experiences, and beliefs and values. Everyone decides how to fit into the existing culture and the extent to which they will support or rebel against it. Their impact can be positive or negative or a mix.
Leaders have more impact because they shape the organizational direction, how work gets done, and how people relate to each other. The higher the level of authority, the greater the influence on the culture.
Certain people within the organization have a strong influence. Some of these are formal leaders and others are informal leaders. They exert a stronger impact on those around them by their expertise, assertiveness or charismatic ability to lead. When assessing culture, these people need to be identified and their impact assessed for its influence or value.
When all internal components are put together with the basic beliefs and values as a background, we have a picture of the internal culture of an organization.
Consider the size and overlap of each of these components. Which areas are critical; which are dominant? Are there any gaps?
These are just a sample of the questions to be asked internally, resulting in a simple portrait. Internal assessment can be completed. People experience different cultures based on their position within the organization. By looking at the whole, areas of concern can be identified and targeted for improvement.
Each organization is different and will have a different ideal state. But looking internally is only part of the picture. It is also important to look at the external influences that are affecting the culture of an organization which we’ll address in Part 3: Framing Your Organization’s Cultural Portrait.
To dive deeper into transforming your organization’s culture, call Farwell at (608) 807-0615.
The Farwell team also specializes in process optimization and improvement, portfolio, program and project management, and change strategy and implementation with organizations looking to thrive in their ever-changing industries.