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The High Performance Corporate Culture By Peter Strupp Businesspeople have a hard time getting their hands around

managing organizational culture to create greater economic value. It seems too nebulous a subject and too difficult to discuss in concrete business terms. However, as we can see from the business headlines every day, business cultures have huge impact on shareholder value. If a senior leadership team understands the business outputs they want from investing in corporate culture then there is plenty of concrete ways for senior leaders to effect fundamental change to support concrete results. Corporate culture influences vital organizational issues relating to employee effectiveness, namely: quality levels, customer satisfaction and loyalty, team work effectiveness, innovation, decision making quality and strategic agility and flexibility. These output measurements can be translated into financial results often in a fairly straight forward way. If senior teams seek to lower employee costs through greater organizational effectiveness, then they should take a serious approach to managing organizational culture for greater productivity. Culture is not an HR issue but a company wide workforce issue. What is Corporate Culture? There are many lenses in which executives can look at organizational culture. Paul Sanchez, global director, organization research and effectiveness at Mercer Human Resource Consulting, states that corporate culture can be defined as the sum total of how an organization accomplishes all that it has to do to fulfill its purpose or mission. This definition covers an organizations operational procedures as well as the standards, behavioral norms and deep-rooted values that underpin them. The behavior of individuals in the organization is a key focal point when clearly defining an organizational culture. It needs to be understood that there is the prescribed culture and the real survival operation culture. Many senior leaders believe vision, values and mission are the defined culture but the real operating culture is how employees must behave in order to survive and thrive. The declared culture and the real operating culture may be extremely different. The Difference between Culture and Climate There needs to be a specific distinction between a companys organizational culture and its climate. Culture is deeply held organizational wide values and behaviors which tend to be difficult to change. Climate, on the other hand ,is the perception of the work environment among employees. It is like the weather; it can change very quickly. This is good news for leaders that want to go after some short term wins.

Organizations with poor climate or employee engagement can institute new practices such as having leaders clearly visible and listening to employees, implementing frequent and informal reward and recognition events, celebrating short term successes, utilizing high communication practices, etc. These can make big changes in climate in a matter of weeks. There is plenty of empirical evidence to show that a markedly better organizational climate can occur within 60 to 90 days of implementing new leadership behaviors. The Relationship between Culture and Leadership Behaviors Please note that the relationship between organizational culture and leadership behaviors is huge. This means leadership behavior on every level of the organization. Employees watch very closely the daily behaviors of leaders to see that they walk the talk They are actively seeking discrepancies between what leader communicates and how they behave daily. One prism in which to view culture is through the measurement of Constructive, Aggressive and Passive behaviors that occur daily on all levels of the company. Very often companies will reward leadership behaviors which are authoritarian, with a focus on power and status. Aggressive cultures are highly competitive with a zero sum gain mentality. If you lose I win. Decisions are highly centralized and are often not communicated well to the rest of the organization. This type of behavior fosters a culture that can deliver short term results. However a company leadership that behaves in an aggressive culture also needs to understand that it is creating a passive employee organization. Employees will not take on decentralized decisions. This is especially dangerous as the company grows and quick decisions are needed. Passive employees will keep their heads down, primarily behave in an over conforming manner, so as not to upset the company hierarchy. They may superficially acknowledge new ideas and fall back into their comfort zone behaviors even when the external market has changed dramatically. A constructive organizational culture is one which is focused on accountability and achievement. The leaders show what they are being held accountable and focus everyone on the key goals which need to be accomplished. Leaders focus on employee developmental growth in order to support the organization. Constructive cultures have the right people in the right positions. They discriminate in terms of investing more heavily on the development of employees who are critical to the execution of the companys strategy. It is not about universal equality but internal equity. Leaders see employees as people and encourage people with praise. Leaders are open and accountable. They understand they need to communicate often and to be clear and to the point. The constructive culture is not about making employees happy. Happy, and even highly motivated employees do not necessarily translate into better business results. It does however foster behaviors of collaboration, development, empowerment and accountability that are empirically proven to contribute to higher business and financial results over time.

Levers for Change in Organizational Culture Leadership behaviors have a very high lever for changing an organizational culture. There are however many important practical factors for changing a culture to one which is characterized as constructive. As Human Synergistics International research has shown, these include the ability to decentralize decision making, to have clarity on decision rights, to upgrade appraisal systems to ensure objectiveness and fairness, to institute informal and formal coaching processes, to create planned leadership development processes which involve internal promotion, to change key internal operating processes that enhance employee involvement. Job design has a high effect on what type of culture exists. Companies with employees that do different types of tasks tend to be more open and collaborative then when the work is rather routine and without variety. Work without diversity tends to contribute to more conformist passive behaviors. Given that the senior teams have limited time, money, people and information to effect change then they should pick their battles carefully. A comprehensive cultural diagnostics audit can breakout in great detail specific factors that can have the highest effect on culture change. It is absolutely critical that senior management first very clear on what specify behaviors it wants to change and what end business and financial results can be measured for success. Cultural change which is incremental rather than transformational (radical) has a much higher chance of success. However often the environmental changes in the market will dictate how radical change must occur. Doing nothing, as a fast changing emerging market rapidly evolves, of course is a recipe for disaster.