What makes a winning organizational culture?
Several factors that frequently lead to success
Oct 1, 2013
By Brian Kreissl
While there has been a lot of research done on this topic, and the recipe for success is different for different industries and organizations, I believe there are some common themes that help determine what an effective organizational culture actually looks like.
Culture can make or break an organization. With a poor organizational culture, a company is unlikely to be truly successful. While it may be able to survive and even be profitable, a company with a truly dysfunctional culture isn’t likely to be highly successful or innovative or be recognized as a leader among its peers.
That’s not to say certain companies aren’t successful in spite of the fact they seem to do just about everything the wrong way. But, by and large, the most financially successful companies are often those with a winning culture and a well-deserved reputation as an employer of choice.
While I haven’t conducted any empirical research into this issue, the following are a few factors I believe generally lead to a healthy and successful organizational culture.
Encouraging a healthy amount of risk taking
It’s generally believed an excessive amount of risk taking in the investment banking industry led directly to the global financial crisis in 2008. Nevertheless, in many organizations there is actually a culture of not enough risk taking, which can be almost as detrimental.
Without encouraging a healthy amount of risk taking, a company is unlikely to grow, prosper or innovate. If the culture is too conservative in that respect, people won’t suggest new ways of doing things or be encouraged to develop new products or business models.
In this environment, sticking to the status quo generally isn’t good enough. And, paradoxically, being too risk-averse can actually end up being quite risky behaviour in itself.
It’s like someone who is scared to drive on the freeway and only drives 60 km/hr in a 100 km/hr zone, which can end up causing an accident. It’s the same in the business world.
Focusing on the longer term and the bigger picture
Far too many companies these days are too focused on maximizing short-term profitability above all else, sometimes to the detriment of the long-term viability and success of the business. While I am not naive and don’t expect companies to be in business for purely altruistic reasons (I also understand shareholders frequently demand improved financial performance each and every quarter) the truth is the focus shouldn’t simply be on driving up the organization’s share price in the short-term.
Organizations should invest for the longer-term with a planning horizon well beyond the next quarter. Cultures that encourage actions and behaviours linked to long-term growth win in the end because many investments take time to nurture and grow.
An environment where it’s safe to speak up
Companies where employees at all levels have input into decisions have more highly engaged and empowered employees. However, they cannot have that kind of impact unless they feel free to speak up.
Organizations that are extremely hierarchical with a highly cohesive leadership team frequently foster a groupthink mentality where no one dares speak up or challenge the decisions of senior leaders.
Because of that, it’s far healthier if all employees — including those on the frontline who are closest to customers and the production process — are given an opportunity to provide meaningful input and suggestions.
Strong focus on customer service, engaged employees
Everyone has customers, and without them there would be no organization. Even non-customer facing employees have internal customers. All too often, however, companies are more concerned with bureaucratic and inflexible policies that fail to treat customers with dignity or respect.
Yet that’s not to say “the customer is always right” is the best attitude either. Employees also need to be treated with respect and should never have to put up with abuse.
In spite of my belief that a strong customer service orientation is an important ingredient for an effective culture, paradoxically some research shows in many ways it’s actually more important to focus on engaging employees and treating customers as the second priority.
I suppose the idea is that without motivated, empowered and engaged employees, it is difficult if not impossible to provide superior service to customers. For that reason, some companies are starting to realize that employees who are happy, productive and believe in the organization are more likely to go above and beyond the call of duty to satisfy a customer.
Brian Kreissl is the managing editor of Consult Carswell. He can be reached at firstname.lastname@example.org. For more information on Carswell's HR products visit www.carswell.com.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.
Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.