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Why you need to review your Organisational Culture

Why you need to review your Organisational Culture

It is important to know what your culture is so that you can check whether it is aligned with the company vision. Without alignment between culture and vision achievement of business goals will be difficult, if not impossible.

Culture is sometimes defined as ‘the way we do things around here’.When it comes to assessing what kind of culture is needed important factors include, age/size of business, maturity of sector, geographic spread, pace of change, level of uncertainty, scale of opportunity, regulatory environment, consequences of mistakes for the business.

So, larger businesses need more standardised processes to be efficient (than smaller entities) and to position the business to safely scale up. In some businesses where fast decision making is essential the workforce need to be empowered to make decisions locally.  In any fast changing environment decision making will tend to rely more on the intuition and judgement of employees than on following standardised protocols.  In regulated industries or industries where precision is required, a low tolerance for breaking the rules will be required.

While culture needs to be fit for purpose, there are some values that should be present in all organisational cultures. There needs to be a culture of mutual respect, where positive behaviours (rather than destructive behaviours) are promoted and rewarded.

 The following are some aspects of the way the business is run that need to be considered during a review of culture. There are no right or wrong answers but the option chosen under each heading must be supported and aligned to the culture :

1. Control : From Centre or Devolved

2. Decision making: Analytical or Intuitive

3. Work organisation/environment: Structured or Informal/Flexible

4. Power and Influence: Based on Title/Position or Specialism/Expertise or Ability to Inspire

5. Leadership style: Authoritative or Democratic (first amongst equals)

6. Mistakes: Tolerated or serious consequences for individual/team

7. Management style: Empowering or Goal driven or Methodical

8. Promotion: Based on being a Generalist or  having Functional expertise

9. Compensation/pay: Rewarded for Individual performance or Team performance

10. Definition of success : To be Biggest or Best or Most Innovative or Most profitable

A typical challenge that businesses face (sometimes unacknowledged) is that the entrepreneurial culture which delivered early success is no longer appropriate as the business matures – hence the need for a ‘cultural audit’ from time to time.

It is important to appreciate that there can be a world of difference between what is ‘official policy’ in terms of culture as reflected in written organisational value statements and what the culture is in reality. The latter is reflected in the behaviours of individuals, and in particular the leadership team. Having noble aspirations is meaningless if inappropriate behaviour is tolerated or even rewarded.

So the starting point is an honest acknowledgement of the ‘way we do things around here’ and ask whether changes (e.g. to recruitment policies and training programmes) need to be made if organisational goals are going to be achieved.

People challenges may arise following a cultural review. Sometimes it may be best to part company with those who do not sign up to organisational values, even if they have talents that the organisation needs.

 

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