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Organizational culture

Here, we explain the concept of organizational culture and, in particular, how to work with it using your employee survey.

Here, we explain the concept of organizational culture and, in particular, how to work with it using your employee survey.

What is organizational culture?

Organizational culture simply is “what people do and how they do it,” which is influenced by a common set of values, shared beliefs, traditions, and norms that leaders, teams, and employees work under. It comprises “the ways people in the organization behave and the attitudes and beliefs that inform those behaviors … including formal, stated norms as well as implicit ways people work and interact.” Most organizations develop organizational values and shape the culture to ensure their people strategy aligns with their organizational goals. Whether the organizational culture is pre-developed or not, every organization operates with one or more cultures, as, without it being defined, people tend to act and behave in alignment with their personal values and beliefs.

Here, we explain the concept of organizational culture and, in particular, how to work with it using your employee survey.

Why organizational culture matters

Without a shared defined organizational culture, leaders, teams, and employees can work in very diverse ways. However, developing and maintaining a shared organizational culture can serve as an organization’s competitive advantage.

An organizational culture based on healthy and sustainable values, norms, and beliefs shapes the work environment and drives, for example, employee engagement, productivity, well-being, performance, innovation, creativity, and talent attraction and retention. It also affects customers who often prefer to partner with “people who believe what you believe,” leadership effectiveness, brand image, and change management.

On the contrary, an unhealthy organizational culture can drive high employee turnover and low productivity, impacting the bottom line.

organizational-culture-matters

Why organizational culture is important in strategy implementation

“Culture eats strategy for breakfast” means that no matter how well-defined your strategy is, if your culture is not healthy, your employees may not want to or be able to implement the strategy as planned.

Organizational culture is portrayed as the collective associations an individual has with their work environment, manager, colleagues, and employer. For people to trust an organization’s defined culture, leaders and employees must act and behave in alignment with it.

 

Which organizational culture is best?

The best organizational culture is sustainable, human-centric, has a foundation of social belonging, and promotes a positive work environment. An organizational culture focused on well-being as the basis of performance empowers people to work in alignment with how the brain works. Leaders play a pivotal role in ensuring their teams’ psychological safety so that the right brain chemicals can be released and performance maximized. A key leadership style to adopt is inclusive leadership, which is proven to increase team performance by 17% and team collaboration by 29% and cut down employee attrition risks by 76%.

In a healthy organizational culture, employees are encouraged to contribute their ideas, take ownership of their work, and change with the organization. These work environments are characterized by open communication and transparency, and feedback is constructively given and received. Diversity and a growth mindset are seen as key factors of success.

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What are organizational culture factors?

Several internal and external organizational culture factors influence the work environment, how people act and behave, the organization’s practices, and values. The main organizational culture factors are:
  • Managers
    Often, the direct manager has the biggest influence on how an employee experiences the organizational culture.

     

     

  • Management
    Senior leadership plays a big role in setting examples of how important organizational culture is and how it should be lived.
  • Values and ethics
    The set of values selected and the ethical practices of the organization form the basis of the culture and its focus.
  • Mission and vision
    The strategic direction and how to achieve it sets the context for the organizational culture and what it aims to work toward.
  • Colleagues
    The way employees behave and whether their behavior is in alignment with the communicated culture influence how the organizational culture is perceived.
  • Communication
    The internal and external communication affects the view of the organizational culture.
  • Development opportunities
    How the organization presents development and career opportunities for their people influences how the culture is perceived.
  • Company policies and traditions
    The number and content of formal policies and practices relating to different parts of the organization and the organization’s history and traditional ways of doing things both reinforce the culture and impact its perception.
  • Compensation, reward, and recognition
    How the organization compensates, rewards, and recognizes its people sets the tone for the organizational culture.
  • Employee experience journey
    The employee experience (EX) has grown more important in organizations over the years, and the entire EX journey—from hiring to onboarding, performance, development, and exit—strongly influences the organizational culture today.
  • Diversity and inclusion
    The way the organization works with diversity and inclusion is an increasingly important factor in the culture.
  • Organizational structure
    The way the organization is organized, including types of roles, reporting lines, hierarchies, and decision-making rights and processes, impacts the organizational culture.
  • Market and industry
    How the organization competes in the market and industry becomes a measure of the strength and sustainability of the organizational culture.
  • Innovation
    The inclination to risk-taking and how the organization empowers innovation reflects on the organizational culture.

How do you maintain an organizational culture?

The key to maintaining a healthy and strong organizational culture is developing it based on what already works well and measuring it regularly. Every organization and its offerings are unique, so the organizational culture must be developed based on its context. A great way to find what works well and how to develop your organizational culture is to leverage a modern employee survey with strong analytics capabilities. With it, you can uncover what your employees and leaders find already works well and where change is needed. You can learn about certain topics and themes and how they are perceived by your people.

Maintaining a sustainable organizational culture is everyone’s responsibility. Therefore, everyone must be involved in developing and measuring it.

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Can organizational culture be measured?

light-bulb
 

Yes, organizational culture can be measured. A modern employee survey, or a pulse survey, allows you to measure your culture regularly and track trends. This helps to ensure people act and behave in alignment with the organizational culture and build on openness and transparency. There is often a gap between what the desired brand should be and what the actual brand is. As long as this gap is not too big, it is ok. No organization is perfectly managing its organizational culture, but it needs to be roughly the same for it to be trustworthy.

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A modern employee survey measures organizational culture by regularly asking everyone a limited set of questions. Qualitative employee survey software enables you to gain many relevant insights from only a few questions when the answers are combined with the HR master data. The process of using an employee survey also enables an ongoing conversation focused on the organization’s most important focus areas for well-being and performance.

 

Who is responsible for organizational culture?

Everyone is responsible for the organizational culture and has a role in ensuring the correct culture is lived. There must be a regular conversation to ensure everyone lives the culture and shares feedback on when it does not work in favor of execution or when someone does not act in alignment. This is easily added to existing team meetings.

Often, the share of responsibility is distributed similarly to:

  • HR

     

    Together with management, they develop the culture that best supports the business’s nature and context. HR often owns the implementation and ensures everyday execution.

  • Management

     

    Sets examples and the tone for how to live the culture and how important it is for the organization’s success.

  • Managers

     

    They are responsible for setting examples for their teams and ensuring an ongoing conversation about the culture and how it supports strategy execution.

  • Employees

     

    Besides living the culture, they must be involved and share their input on what type of culture the organization should have since they are closest to everyday execution.

Can organizational culture be changed?

Yes, organizational culture can be changed. However, it is not easy. Organizational culture is a complex concept built on many aspects of the organization. It must be contextual, drive strategy execution, attract and maintain the right types of talent, and ensure a work environment conducive to employee well-being and performance.

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The steps to take when changing the organizational culture should include:

 

  • 1. Learn the current state

    Changing a culture should begin with understanding its pros and cons. This is easy to do using a modern employee survey with strong analytics capabilities. A confidential employee survey can give you employees’ authentic feedback on the organizational culture. Building on what works well and changing what does not can give you a head start on creating a successful organizational culture.

  • 2. Set your objectives

    Define what you want your organizational culture to achieve.

  • 3. Identify the gap

    Knowing where you want to be, where you are, and what drives success and what prevents you from reaching your objectives allows you to identify the gap.

  • 4. Define your culture

    By clearly understanding your current state, objectives, and gaps, you can define the culture that will make you successful.

  • 5. Implement the new approach

    Ensure you communicate the new approach well and thoroughly. Make a point that everyone has contributed to shaping the new culture, increasing the likelihood of it being lived. Set expectations for everyone to live the new culture and give input when it does not support the objectives.

  • 6. Measure your organizational culture ongoing

    Once a new organizational culture has been defined and implemented, the key to success is to measure it regularly. The measurement should include how well it supports strategy execution and everyone’s ability to live the new culture. Theory does not always work in practice, so be prepared to listen to your employees and leaders and make changes as necessary.

     

Does organizational culture evolve?

Yes, organizational culture evolves over time. There are several reasons for this, including:

Arrow_Circle_Right Leadership changes
Arrow_Circle_Right New generations with new expectations of their employer joining the organization
Arrow_Circle_Right Growth and new market entries
Arrow_Circle_Right Market or industry changes
Arrow_Circle_Right New technology changing the way organizations work
Arrow_Circle_Right Mergers and acquisitions
Arrow_Circle_Right Crisis events such as operational failure or scandals
Arrow_Circle_Right Internal reorganization, re-focus programs, or downsizing
Arrow_Circle_Right Regulatory changes
 

Instead of trying to prevent the culture from evolving, the better option is to track changes as they happen and adjust when needed. Keeping your eyes open to external changes and listening to your employees will go a long way.

 
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How organizational culture impacts performance

Organizational culture strongly impacts employee and leader performance. McKinsey research links top-quartile cultures to 60% higher shareholder return than median companies and 200% more than the bottom quartile.

Since people behave and make decisions based on how they view reality, organizational culture has a big potential to shape their views and positively influence people’s performance. It boils down to how the brain works and ensuring the right brain chemicals are released. For the brain to perform optimally, you must ensure you are in an environment conducive to well-being and that you use your daily brain energy smartly.

A healthy organizational culture sets the tone and environment for people to have well-being at work and perform at their best. Trying to force performance using micromanagement techniques, unnecessary hierarchies, or unwanted restrictions rather hinders people’s abilities to produce qualitative, creative, and innovative work.

Instead, focusing on employee engagement and involvement contributes to a positive employee experience where people can perform more easily. In an organizational culture where people feel social belonging, “the brain releases neurotransmitters such as dopamine and oxytocin, impacting motivation, trust, commitment, performance, and creativity.”

A healthy organizational culture often leads to a positive employee experience, which in turn impacts the customer experience. This shows through stronger customer interactions, better product or service knowledge, urgency to solve the customer’s problem, and customer satisfaction and referrals.

 

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