Why Organisational Culture is Essential
Corporate culture has become a hot-button issue for modern organisations. Culture directly affects talent retention, profits and business growth.
Why then do so many businesses prioritise the bottom line over changing organisational culture? The answer could be that short-term targets are more visible and easier to quantify. Or perhaps leaders with strong technical skills need more support to understand with the complicated puzzle of personalities in their team.
Whatever the reason, strategic cultural change that unites individuals, teams and leaders behind business goals is the foundation on which a successful business is built.
Transformational leadership that creates a framework for this kind of change comes from within the organisation – often with a little coaching. Cultural change is a combination of insight, the proper tools and dedicated management.
The result can be salvation for a floundering business and success measured in decades for organisations who acknowledge the need to adapt.
Understand Your Current Culture
The first step to achieving organisational change is understanding the current climate within your own walls. Smart business leaders understand their market; transformational leaders also have clarity on the shared values, attitudes, beliefsand behaviours of the people they work with.
That is, how employees feel about the business.
It can be difficult to get employees to talk openly about the organisation. An anonymous culture survey with the right questions can identify the prevailing perception in key areas:
· Organisational strengths and weaknesses
· Workplace environment
· Individual recognition
· Acceptability of risk-taking and innovation
· Style of management
· Mission and vision alignment
The Four Types of Organisational Culture
Being by nature intangible and immeasurable, corporate culture can be difficult to define. This is where the OCAI framework becomes a useful tool.
The Organisational Culture Assessment Instrument (OCAI) lays out a framework for classifying workplace culture into one of four types:
1. Clan Culture
More like a family than a business, clan culture is built on shared values and emphasises collaboration. Loyalty and tradition abound in clan culture. Many not-for-profits and sporting organisations will display clan culture tendencies.
2. Adhocracy Culture
Common in start-ups and tech organisations, adhocracy encourages risk-taking and innovation.“Ad-hoc” businesses focus on long-term growth and reward initiative by recognising individual contributions.
3. Market Culture
Perhaps not surprisingly market culture focuses on market share, profitability and results.Businesses like Uber and Netflix, who focus on reputation by a tooth-and-nail approach to beating out the competition, are typical market culture organisations.
4. Hierarchy Culture
Process and rules are the hallmarks of hierarchy culture, which is overseen by managers who champion adherence over risk-taking. Government agencies, financial institutions and airlines are good examples of hierarchy culture.
It is normal for a workplace to have a preference for one culture type while exhibiting elements of others. After all, organisations are made up of changeable humans. Asking your workforce to define the organisation’s prevailing culture using OCAI is a helpful starting point for changing organisational culture.
Use these insights to set goals for cultural change.
Implementing Cultural Change
Without a clear direction this initial defining stage can lead to a never-ending discussion of the organisation’s strengths and weaknesses. To get employees on board – and ensure a productive process from the start – work with clearly defined parameters:
Set priorities early on
Identify a shortlist of 2-4 core priorities (e.g. profit growth, employee retention, market share)which will become important lighthouses during the cultural change process.Next find the 3-5 strengths already working for you. These could be either values or behaviours. Finally ask your workforce to agree on 1-3 main weaknesses that are holding your business back.
Clarify the Vision
Clearly establish the reason for cultural change and how it will deliver against the priority areas,so everyone understands the need for disruption. Positive cultural change should leverage the business’ strengths and overcome the defined weaknesses.
Culture change normally means behaviour change; management should outline and exemplify the behaviours that will support positive change, while discouraging behaviours associated with the identified weaknesses.
Know Your Ideal Culture
Transformational leadership teams should work together to identify the cultural traits they want to exhibit in the future and set strategies to get there.
Again the OCAI framework comes in handy.
Looking at the four cultural types with a new perspective will present opportunities to promote those desirable traits.
1. Clan Culture
To embody the clan culture, actively engage employees. Encourage flexible team structures and a mentorship approach to management. Especially for organisations whose employees perceive their leaders as hierarchical, breaking down barriers between management and employees will foster a culture of trust and teamwork.
2. Adhocracy Culture
Nudging towards adhocracy without totally restructuring could look like implementing entrepreneurship and innovation programs, reworking process flows and implementing flexible working styles. Importantly in adhocracy culture risk-taking is encouraged and work is passed from team to team to break down information silos.
3. Market Culture
Market cultures can tread a fine line between healthy competition and employee rivalry. To foster the good and stamp out the bad, level the playing field by increasing visibility in line with performance. Focus rewards on metrics that relate to market performance like customer satisfaction, new product development, and healthy sales targets.
4. Hierarchy Culture
Transitioning to hierarchy culture often looks like formalising line management structures and mapping processes for the best chance of a consistent product. Innovation can still thrive in a hierarchy, however the focus is on process and procedure.
Many organisations roll out a new set of values and think the cultural change process will happen by itself. The reality is effective cultural change can only be possible with a clear vision and dedication from everyone.
Align Your Team
Culture change should come top-down and bottom-up to meet in the middle.
Once everyone is on the same page the process of changing organisational culture gains momentum and the goalposts move perceptibly closer.
Clarify Actionable Priorities
Define the strategies that will support the outcomes identified at the start of the process. For example,if the priority of cultural change is to focus on capturing market share, will this be achieved through increased marketing efforts or product diversification(or both)?
Create Well Defined Goals
Use feedback from your team to set clear, achievable goals. The goals should use your organisation’s strengths, address identified weaknesses, and be achievable by following the expected behaviours outlined in the first phase.
Clarify Key Measures
Measuring success, in stages and overall, will align the team behind a set of common purposes.Targets can incrementally build towards the priorities set initially and include a common unifying target that gives the entire organisation a common goal.
Managing the Transformation
Once the cultural change plan is supported by the wider team, leadership should set up processes to keep the process moving until the workforce can recognise those traits you set out to achieve.
Change takes time,tools, and teamwork.
Keep Track of Goals & Priorities
Any smart business will be tracking performance in different areas. To monitor progress on the road towards changing organisational culture, the way your business collects and feeds back on performance data may need to be tweaked.
Continued consultation throughout the culture change process is vital. Depending on the ‘goal’ culture this can be handled in many ways; e.g. a hierarchy culture might schedule regular presentations where an adhocracy would run smaller mixed-team sessions with less formality.
Transformational leaders may encounter feedback along the lines of “get on with it” or “I don’t care, I just work here”. Two strategies to maintain motivation include regularly sharing success or owning setbacks (i.e. transparency), and regularly checking in with staff at risk of disconnecting.
Everyone should own the cultural change process.
However, a truly transformational leader will affect sustainable change if they are clear of purpose and maintain the support of their colleagues. For leaders new to the task of culture change, the right coaching will provide insights, tools, and support that enables them to make a difference.
There is no need to fly blind into the journey of changing organisational culture. Coachlive provides dynamic executive coaching that supports leaders to make real change within teams and across global organisations.
With affordable and accessible executive coaching tailored to what you need, Coachlive could end up being your best asset during cultural change.