Organizational culture has always been seen as the “soft” side of business. It has been defined as the values of the organization by which an organization can maintain a “positive” work environment in which people will work. But, this is short-sided and missing one of the most important weapons organizations can use to improve business results. However, we need to look at culture differently to make a more direct link to business results.
Business results for many organizations involve one or more of the following criteria:
- Profitability
- Market share growth
- Customer satisfaction/loyalty
- Cost containment
- New product/service development
- Organizational growth and/or diversification
Each one of these criteria answers “what” organizations need to accomplish. And, while strategic plans provide a roadmap for each functional area’s role in accomplishing those criteria (goals), this still represents a further clarification of “what” each functional area needs to accomplish for the overall outcomes to be achieved.
The culture of an organization answers “how” each functions direction and the ultimate goals of business results are achieved. The organization’s culture is similar to an American Football Team’s choice of culture. Are they going to be a “running” team or a “passing” team? As you can easily tell, this isn’t based on a set of values like teamwork, integrity, communication, which are assumed for any effective organization. It is much more specifically designed based on the nature of the business and how it will maintain a competitive edge.
For instance, the culture of a fast-food chain is very different than a gourmet restaurant. In a fast-food chain, the culture is fast-paced, highly standardized, highly mechanized, and designed for mass production. This impacts an approach to decision making, communication, teamwork, and performance management very different from a gourmet restaurant which is slow-paced, ambience-oriented, highly individualized for each customer, and focused on quality over timeliness. While each type of restaurant may have similar values, the way they carry out their functions need to be very different and in alignment with the organization’s purpose, goals, and desired business results.
The culture therefore answers, “how” an organization must function to optimize business results. The culture of an organization is represented by how the organization “executes” to achieve its business outcomes and goals and is represented by the following criteria or questions:
- Is decision making timely, involving the impact departments and implemented in a unified manner or is decision making stuck in over-analysis, silo-decisions which don’t include impacted areas, and is inconsistently implemented by those making the decision?
- Is information shared openly between functional areas, and up and down the organization in a way, which is useful for people to make decisions without getting bogged down in over sharing of information?
- Do people feel safe to surface problems when they are small and take initiative to find solutions or do people wait until a problem becomes a crisis and then begins by finding who to blame for the problem rather than bringing the appropriate people together to solve the problem?
- Are future leaders being developed at all levels of the organization in a clear and deliberate manner that includes success planning and individual/team development plans in preparation for growth and an aging workforce, or is the organization too busy achieving so many priorities and goals that it doesn’t have time to fully implement or follow up on development plans even if it is a company goal or value?
However you may have answered each of these questions as a subset of your culture, these represent your “habits” of execution that is either contributing to your business results or becoming a roadblock to achieving your business results in the most effective manner possible.
How can you effectively develop new products and respond to customers in a timely responsive manner if you aren’t making decisions effectively?
How can you effectively grow or reduce your workforce to respond to changing business conditions if you aren’t developing them as leaders (technically or managerially)?
How can you accomplish a higher level of business results with less resources, when crisis management is dictating people’s focus and energy which costs valuable time, money, and human effort?
Just as any performing group gets very clear and assesses their execution before a live performance, organizations which are successfully becoming benchmarks, are determining the optimal execution necessary at each level of the organization and within each functional area to optimize business results. They define the “habits” of execution necessary for success and measure their execution linked to business results.
While organizations are tracking competencies and scorecards associated with business results, the highly successful organizations are tracking their key “habits” of execution correlated to their business results, which encompass competencies but in a way, which focuses on delivery not just skill.
Assessing Your Culture Linked to Business Results
1. Have you clearly identified the “ideal” habits of execution for each level of management and individual contributors that would optimize your business results?
2. Do you have a process for measuring those habits on a regular basis and fine-tuning them to get even better results the way any other performing team reviews and up levels their habits of execution?
3. What are the habits of execution in your organization that are undermining your success on a regular basis and which level of the organization is mostly accountable for those habits?
4. What is the organization doing to change those habits in a coordinated way?