111 — What is Company or Organizational Culture?

 

Your Corporation’s Culture is Its Personality. It is the company’s shared beliefs, values and practices — the unique way your organization sees the world and acts. It is what employees do and what their actions mean to them.

Just as our personality guides what we do, so an organization’s culture affects everything employees do — how energetically they contribute to teamwork, problem solving, innovation, customer service, productivity, quality, and profits. The company’s culture makes it safe (or not safe) for a person, division or the whole company, to take responsibility, raise issues and solve problems, to act on new opportunities, or to move in new, creative directions.

Culture and personality are similar because historically cultures were developed by people to solve and satisfy people’s needs. When we describe a national, regional, or organizational culture we use words that can as easily apply to a person. For example we might say that a culture is “friendly” or “tough”. It might be “driven and aggressive”. It might be “active”, “analytic”, “trusting”, “collaborative”, or “open”. These adjectives can also describe a person.

To understand why people in a company do what they do, look to the culture. Or to say that another way; if you want to understand a company’s culture, look at what people in it do.

A Well-Developed Culture Easily Outperforms Competitors

A company’s culture is usually at the root of success or failure. It underlies difficult people-related problems in communications, teamwork, resilience, productivity, profits, motivation, morale, absenteeism, retention, safety, injuries, and insurance claims.

A company’s leader can change the culture. This is hard to do — because cultures resist change — but it’s not rocket science.

A company’s culture affects everything in it — including profits — so in many ways culture is the real bottom line. A company with a well-developed culture, open to all that its members want to bring, easily outperforms competitors with less developed cultures, where people are less involved and committed to success.

A Company Does Not Have a Culture, A Company Is a Culture

We talk as if a person has a personality, or a company has a culture. But people don’t really have a separate thing called a personality. A person is what they do, how they feel, what they think; their unique mix of emotions, attitudes and behavior. Similarly a company does not have part of itself called its culture. A company is a culture, the unique way it sees the world and does what it does.

Also, just as a person is not a problem — though sometimes what a person does may be a problem to others — so a culture is not a problem. It just is what it is.

A company culture contains everything that makes up the organization and how all the parts work together. It is the unique mix of equipment and hardware, processes and software, the authority, reporting and control structures, communications and relationships, and the nature and quality of its members’ experiences. See also The Five Levels of Culture. However when we talk of company culture we usually mean the human half. It’s like talking about a person’s personality — we don’t include his or her body even though the mind does not exist without the body.

Cultures Tell Us How to Behave

As we matured from infancy to adulthood, it was our culture — in and outside of our home — that taught us how to act. As human beings we are highly skilled at learning from social settings, recognizing almost immediately how we should behave. We know how to fit in, how to do what is needed, how to adapt, how to be accepted and how to succeed.

We jump and shout at a ballgame, sit quietly in church, pay careful attention in class, behave appropriately in meetings, and lovingly guide our children at home. These are all learned adaptations, always appropriate to the situation — from our country’s and local culture’s unique way of seeing the world and doing things.

To Understand a Company’s Culture, Look at What People Do

It is the very essence of all cultures that they tell members how to behave, what to do. The company’s culture is the stage or backdrop for what people do on the job, for everything that happens.

If people are open, forthright and engaged, you know that is the nature of the company’s culture. In contrast if people are defensive, irresponsible, and passive, you also understand the company’s culture.

Culture Mirrors Leadership

People look to their leaders for signals on how to behave. For example, although most people want to be open and engaged, they will only be this way if they think their leaders, and thereby the company’s culture, want it.

In any organization 80 percent of the members are potentially very flexible. If the culture asks for it, these employees will be engaged, responsible, pleasant, and highly productive. Conversely, if they think the culture asks for it, these same people can be closed, unengaged, irresponsible, unpleasant, and unproductive.

Surveys consistently reveal that only about a quarter of employees are actively engaged in their jobs. About half have no enthusiasm for their work. About a fifth are so uninterested or negative about their work that companies might be better off if they called in sick. Because most of employees’ attitudes comes from the culture, these surveys indirectly reveal that three quarters of all cultures are sadly underdeveloped.

Build the Culture You Want

It is simple — but not easy — to build the culture you want. If you want people to be engaged, engage them. If you want people to be involved, involve them. If you want good communications and relationships, simply communicate and establish good relationships. If you want people to be efficient and productive, help employees understand their financial and production environment, i.e. give employees access to the numbers in a form they can use.

A Well-developed Culture Is Highly Profitable

If you demonstrate desired qualities, everybody will see the change, like it, and respond. As you create a workplace where members can better meet their desires around their tasks (such as recognition, involvement, teamwork, creativity, responsibility, and productivity) high company performance naturally follows.

Because culture determines profitability it truly is the real bottom line. Sadly, in most companies, it is the biggest untapped asset.

cc 111 — © Barry Phegan, Ph.D.

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Posted in: About Company Culture — Definitions

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