CORPORATE CULTURE-AN ALLY OR OBSTACLE?
What makes a company desirable to work for and another not? What is one such factor that not just you,but every other person you know would look for in a company they intend to work for.
The annual CTC that the organization is willing to provide is definitely 1.but would you be ready to work for a company that gives no importance to the wellbeing of its employees or say is all about making profits.where the workplace is filled with stress and anxiety. To be even more precise-the organization has a very unattractive environment to work in.Would you still be ready to work there for a 100 million dollars?
Heading back to our initial question.What makes companies different from each other. With so many of the fortune 500 companies being structured in a similar way, the answer likely isn’t their organization in itself. In reality, what differs from one organization to another is the corporate culture, which dictates how employees behave and how those actions are perceived and validated.
For example-twitters employees are always excited about their great organizational culture-from rooftop meetings to yoga classes and free meals and so on. The employees just can’t stop raving about it. Additionally the employees love working with smart and friendly co workers in a team oriented environment. These aspects motivate twitter employees to go above and beyond to meet the company’s goals.
Let us now step into the shoes of the organization. What is it that they look for. What is their objective behind all the work and time they spend on their organization.Its nothing but the organization’s success and developing a strategic plan is something without which the organization cannot move any further.
An organization must be able to efficiently execute that strategy to achieve its performance improvement goals.
At the core, implementing strategy depends on two essential elements:
- Building and sustaining an organizational culture that facilitates and accelerates change
- Fostering a sense of personal accountability for strategy execution ownership at every agency level – from administrative assistant to senior leadership
And thus the organization’s culture is often the most important determiner in successful execution. In other words, constructing a culture that creates the flexibility and understands and accepts the responsibilities for change is key.
Corporate culture means different things to different people. It is emotional, ever-changing, and complex. Culture is human, vulnerable, and as moody as the people who define it. Cultural dimension plays a vital role in all aspects of an organization. It is so impacting that it can determine the success and failure of an organization. In leadership concept, organizational culture has been identified as one the most important components that strategic leaders can use to develop a dynamic organization. Culture reflects the way in which people in an organization set objectives, manage their resources and perform their tasks. Culture also affects people’s behaviour unconsciously. Even in those organizations where the ideals of organizational culture do not receive much explicit attention, how people think, feel, value, believe and behave in a company are generally influenced by ideas, beliefs and perception of a cultural nature.
Corporate culture is an incredibly powerful factor in a company’s long-term success. No matter how good a strategy is, when it comes down to it, people always make the difference. Once culture is established and accepted, they become a strong management tool for leaders to communicate and energize their members with beliefs and values to do their jobs in a strategy supportive manner.
It can be intimidating and frustrating, often leaving leaders dodging it, neglecting it, or discounting it.Too often a company’s strategy, imposed from above, is at odds with the ingrained practices and attitudes of its culture.
Leaders may underestimate how much a strategy’s effectiveness depends on cultural alignment.
Creating an organizational culture that is open to change starts with a senior leadership team that communicates an agency’s strategic priorities often and effectively.Each person in the agency contributes to its success. Everyone should feel personally accountable. A case study involving telecommunications giant AT&T revealed that effective collaboration between teams, a commitment to an employee’s personal action plan, and open dialogue with senior management led to an environment in which employees at all levels felt that their opinions counted. As part of the study, the participants developed measurable goals and plans to communicate clearly and created feedback mechanisms to senior leadership. The atmosphere the participants built led to improved strategy execution and higher performance.
So what is the relationship between culture and strategy:
- Strategy drives focus and direction while culture is the emotional, organic habitat in which a company’s strategy lives or dies
- Strategy is just the headline on the company’s story – culture is a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations
- Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution
- Strategy lays down the rules for playing the game, and culture fuels the spirit for how the game will be played
- Strategy is imperative for differentiation, but a vibrant culture delivers the strategic advantage. A culture grounded in strategy-supportive values, practices, and behavioral norms adds significantly to the power and effectiveness of a company’s strategy execution effort. A tight culture-strategy alignment furthers a company’s strategy execution effort in two ways:
- A culture that encourages actions supportive of good strategy execution not only provides company personnel with clear guidance regarding what behaviors and results constitute good job performance but also produces significant peer pressure from co-workers to conform to culturally acceptable norms
- A culture embedded with values and behaviors that facilitate strategy execution promotes strong employee identification and commitment to the company’s visions, performance targets, and strategy.
- Culture is a clear competitive advantage. When a company’s present work climate promotes attitudes and behaviors that are well suited to
first-rate strategy execution, its culture functions as a valuable ally in the strategy execution process.
When members in an organization share the same beliefs and values, they can understand what kind of attitudes they expect themselves and other people to show in working place as well as how they need to behave and react in particular situation in order cooperate well with each other. As they understand what the company is trying to accomplish, it will motivate them to work for a higher purpose which in turn helps to set an organization apart from the competition. Managements can also use organizational culture as an effective tool to dictate, control and manage employee behaviors in their strategic management. In fact, this is a more powerful way of managing
employees than company’s rules and regulations. Leaders in the company can use culture to influence, educate and shape their staff’s mindset and attitude to gain their support in following the company’s plan and procedure while reducing resistance in the organization. Having a strong, positive and strategy-supportive culture will affect the energy, enthusiasm, working habits and operating practices of employees which will not only booster
the efficiency and effectiveness in the department but also attract many people to work in the organization while reducing their staff turnover, hiring and training cost which results in yielding a competitive advantage.
Not only does it contribute to company’s competitive advantage, organizational culture also sustains the company’s competitive advantage. As a company starts to experience the superior financial performance, its competitors will also starts to seek to copy what they believe is the source of competitive advantage that generates the success of the company. After examining the relationship between culture and superior financial performance, culture is the factor that can help companies to generate sustained competitive advantage.
When culture embraces strategy, execution is scalable, repeatable and sustainableA strong and valuable organizational culture is one of the most sustainable competitive advantages a company can have.This is because a valuable and rare culture is very difficult to imitate. Given enough time and money, competitors can duplicate almost everything what one has done. They can hire away some of the company’s best people. They can reverse engineer the company’s processes. However, when it comes to organizational culture, they can’t duplicate the organization’s culture. It is very hard for people to define culture clearly, especially in respect of its contribution to value of company’s product and service. Another reason for this is that culture is usually related to historical aspects of company development as well as to the vision, beliefs and inspiration from particular strategic leaders.
Organizational culture is the uniqueness and the identity of an organization that will differentiate the company from its competitors.
A good example to illustrate this point is Zappos company. Knowing that customers nowadays not only focus on good products but they also demand excellent service from the outlets, Zappos’s strategic plan is to build a long term brand that not just about shoes, clothing or online retailing but to be about the best customer service and the best customer experience. To be able to achieve this goal, Zappos believes that organizational culture is the only answer. They believe that if they can get the culture right, most of other stuffs such as great customer service, or passionate employees, or building great long term brand will naturally happen on its own. In order to make employees to deliver an excellent service, instead of just using rules and procedures like other companies to educate staffs, the managements in here have shaped their staff’s mindset and attitude by using culture to transmit their message to their staffs. Zappos have created a culture that encourages employees to “wow” each other by being yourself, as crazy or weird as possible, showing your care and love for other people, and just having fun in the workplace. As the employees start to be wowed by their colleagues, they will automatically want to do the same thing for other people, especially for their customers. This culture not only makes employees to be happy in their workplace but it also encourages staffs to be creative and enthusiastic in wowing their customers which results in increase in their repeated customers and their sale performance. This culture is something unique that people usually do not find in other companies which makes it attractive to their staffs as well as to other people to work in Zappos. It becomes a competitive advantage of Zappos which cannot be copied by other competitors. It makes Zappos become more competitive and differentiate themselves from their rivals in the market place.
Culture is built or eroded every day. Reaching the final peak is not all that matters-how you climb the hill and whether it’s painful, fun, positive, or negative defines the journey. When the culture is in conflict with some aspect of the company’s direction, performance targets, or strategy, the culture becomes a stumbling block. Conflicts between behaviours approved by the culture and behaviours needed for good strategy execution send mixed signals to organization members, forcing an undesirable choice. When a company’s culture is out of sync with what is needed for strategic success, the culture has to be changed as rapidly as can be managed. A sizable and prolonged strategy-culture conflict weakens and may even defeat managerial efforts to make the strategy work.
Culture must be monitored to understand the health and engagement of an organization. It may even be a wiser choice for managements to select a
business or strategy that will fit their company’s organizational culture well in order to shift the firm toward a new strategy instead of accomplishing cultural change, which can be very difficult to achieve.It has been a proven fact that Culture trumps strategy every single time! If your company culture is inherently negative, then employees will feed off of that negativity. It will work against your productivity instead of in favour of it. Thus, your organizational culture must be honed and cultivated in order to maintain it.
Let us look into a saying that’s often but I must say without a lot of evidence attributed to Peter Drucker. The saying “Culture eats strategy for breakfast” suggests that no matter how good your strategy is –if it’s not consistent with culture of the organization then that strategy is likely to fail.
The truth is that of course culture and strategy are both important and what really matters is that one is aligned with the other.If you need to shift the organizational strategy significantly then you will need to do the work to shift culture accordingly.and even if such a change tends to be necassaryits important that we grow from our current culture.the existing culture shouldn’t be scrapped off all at once.Instead suggestions and modifications from the very work force this culture shall be a part of is the right way to move ahead.
And as far as the question as to whether Organizational culture is an ally or obstacle-my vote would definitely lean towards the ally aspect as long as we understand and use it to our benefits.