There are a number of inter-related performance factors in a company’s operating style/culture (the way things are done) that can significantly influence its organisational effectiveness. Poor execution caused by organisational issues is held responsible for over 50% of corporate failures to fully deliver business strategy. Moreover, at least 60% of company mergers fail to realise their anticipated pre-acquisition values, and approximately 75% of all change programmes are unsuccessful. Why? Because organisational culture can secretly conspire against these efforts.
Cultural clashes mean that what looks on paper to be a sensible restructuring solution often doesn’t work in reality unless potential incompatibilities of organisations and units during merger integration are addressed. Discovering cultural differences too late can prove costly, time consuming and hugely frustrating.
What is organizational culture?
Many books, filling plenty of library shelving, give us all sorts of statements and descriptions characterising organisational culture. Organisational psychologists talk of the values, assumptions, behavioural patterns, style, climate, atmosphere, norms, and observable attributes that we associate with a particular organisation or group. Put more simply, it’s “the way things are done around here.”
Employees soon learn the ropes about the organisation’s culture by experiencing how people behave towards one another and about the ‘rules of the game’ through what is paid attention to. These behavioural norms may or may not be aligned with the company’s stated values or conducive to the achievement of its stated strategy.
Examples abound. The CEO who is adamant about the need for entrepreneurial creativity and innovation as a strategic imperative, and whose senior manager’s immediate response to any volunteered creative idea is: “It won’t work.”
The corporate centre that entreats frontline staff at a bank to engage in more consultative (and time consuming) dialogue with customers, only to have the branch manager quietly mouth “hurry up” from behind the customer queue. The FMCG leadership who extol an end to bureaucracy, encouraging operational slickness and efficiency while at the same time demanding the 27 monthly reports, 50% of which nobody reads.
What type of culture is best?
These might all be examples of potential misalignment between organisational behaviours and the view from the top, but they illustrate reality for many employees in UK Plc.
What these examples don’t really tell us and what many organizational culture diagnostics fail to uncover is what the “right” culture to have is. Even the grandfather of organizational culture gurus, Dr Roger Harrison, couldn’t get us past the strengths and limitations of his model of four organizational cultures: Power, Role, Achievement, and Support. It has still been left to organizations to try to fathom out what type is best for them.