Organisational culture is a powerful business driver. Fostering the right culture provides a significant competitive advantage and drives higher employee engagement and productivity. Conversely, not having the right culture is like driving a car with the handbrake on – it can really hold back performance.
Massive and widespread changes to the workplace are driving the need to review and update organisational culture, structure and hierarchies.
So, what should you do to shake up your company’s culture? And what can you learn from the culture established at top-performing companies like Facebook, KPMG and Pixar?
Why is organisational culture so important?
Organisational culture is, essentially, an organisation’s personality. It encompasses things such as cultural values, beliefs, practices, ways of working and reward systems.
The culture is set by business leaders, whether intentionally or otherwise. But there are other significant contributing forces too such as management style, working environment and the industry sector you operate within.
Its influence is far-reaching, impacting upon almost every business metric you can think of, from employee engagement and retention to productivity, customer service and performance.
In fact, it influences employees every day. An organisation’s cultural norms and practices will guide what we do, how we do it, our thought processes and decision-making. So having a culture that doesn’t fit or enable your employees is potentially very damaging.
Worryingly, according to Deloitte’s 2016 Global Human Capital Trends survey, only 28 percent of respondents claim to understand their own business culture. And even fewer believe they have the right culture.
What’s driving the need for cultural change?
There isn’t one single factor behind organisational culture’s rise up the boardroom agenda. Rather, there’s a myriad of trends fuelling this demand.
This includes macro level changes in the workplace where there are three different generations of worker, each with fundamentally different outlooks, skills and priorities. The influx of ‘Millennials’, in particular, is having a strong influence on organisational culture.
The widespread availability of digital technology has also brought about seismic shifts in how, when and where we all work.
Then there’s the changing relationship between employee and employer. It is arguably now more transactional. Both parties are looking to get maximum value from their time together but the expectations of a 15 to 20-year plus career climbing one corporate ladder is now seen as the exception, not the norm.
The cumulative effective of these factors is that, in many cases, traditional structures (and cultures) now just don’t fit the business’s needs or those of its people.
It’s also worth noting that the hyper-competitive business world means firms are seeking every competitive advantage they can get. And they recognise the importance of culture in helping to attract the best people, drive higher performance and boost their bottom line.
Measuring your organisational culture
You could carry out a ‘root and branch’ review and assessment of your organisational culture. This could involve focus groups and stakeholder interviews to offer deep insights into the culture. However, such a comprehensive process will be time-consuming and may not be needed. You could find it gives you an overwhelming amount of data, much of which isn’t what you need. So, first consider what this level of insight will tell you and how’ll use this information.
Cultural and process audit
A more targeted approach involves identifying just the aspects of your culture that may be either helping or hindering the business. List business communications, processes, practices and ways of working, noting which of them are harmful and/or are not culturally or strategically-aligned. Then consider the values and behaviours that underpin these harmful processes. This will help you to start to create a picture of what needs to change as part of the cultural transformation.
Devising and running a short culture survey, or even including some additional questions in an existing employee could offer great insight. I could show how your culture impacts upon employee engagement, attitudes and behaviour. Designed to measure the right things, the survey can show you the impact of your culture on what your employees think, feel and do (and on their overall engagement) and highlight where action may be needed.
Don’t overlook existing tools and data sources that could help you to gain an insight into your organisational culture, and measure the impact of cultural change too. This might include: employee surveys, performance scorecards, and customer research or satisfaction surveys.
What can you learn from top performers’ culture?
While there’s not a blueprint for a successful organisational culture, high-performing businesses often share cultural qualities or commonalities. This includes in areas such communication, innovation, agility, collaboration, environment and mission and value alignment.
Below we look in more detail at why several of these cultural traits are important in the success of top companies.
KPMG: Bringing the mission to life for employees
‘Buying in’ to our employer’s mission is an important cultural element and it has a real impact on employee engagement. We want a purpose and to know what our efforts every day are contributing to. We want the bigger picture. Your company mission therefore needs to be more than just some words on the wall.
Financial services giant KPMG offers a great example of a company that has made its mission meaningful for employees and central to its culture. They collected hundreds of employee stories relating to purpose-driven work. This has grown to form a central part of their employer brand and organisational culture, having been actively championed by senior leaders.
The benefits are far-reaching with internal research showing it has had a hugely powerful impact upon staff retention, engagement and morale.
Facebook: The importance of working environment
Physical surroundings at work matter. Not only can they affect our mood but they also influence things like creativity and productivity too. Savvy organisations such as Facebook and Google have long recognised the importance of the workplace.
They seek to drive greater engagement, productivity and creativity by devising more flexible, comfortable, fun and stimulating workplaces.
The desired culture at Facebook is open, inclusive and collaborative. They’ve modelled their office space to reflect this, promoting equality, a flat structure and inclusive working environment with roomy, open plan office space. Even Mark Zuckerberg (the CEO) works out in the open.
Pixar: Fostering creativity through collaboration
Pixar, the computer animation company behind box office films such as Toy Story offers a great example of the power of a truly empowered, creative and collaborative culture.
They emphasise the role of leadership in creating the foundation and instilling the guiding principles (such as trust and respect) that are needed to create a collaborative environment. The key to creativity, they say, is community and harnessing the power of the collective group.
At Pixar, there’s an open feedback culture where ideas and challenges are shared freely without the fear or risk of failure or rejection. There’s also no hierarchy. They refer to this as ‘peer culture’ whereby people at all levels can support (and challenge) one another. This works because people buy into the culture of the collective.
Changing your organisational culture
An organisation’s culture is deeply rooted and, as you’d expect, change doesn’t come easily. An HR function will of course need to play their part in setting the course and advising on strategy and measures for embedding cultural change. But it is business leaders who, arguably, will have the pivotal role in actually delivering cultural change.
Leaders must therefore fully buy-in to the change in culture as it is they who must embody and ‘role-model’ the behaviours, values and practices that support the business strategy and shift to the desired culture. Tools such as 360 degree feedback can be useful here for leaders to raise their self-awareness and help to instil the values and behaviours you want them to be modelling.
You’ll then need to make sure your employees are getting the right messages from the business. This involves what they hear directly from senior leaders and managers as well as the messages they get from things such as your business strategy, rewards system and corporate social responsibility agenda. Do these things reflect the culture you’re trying to foster? If not, you’ll need to go back to the drawing board as the alignment of such things is essential to evolving the culture.