The following numbers are averages calculated from published research of an 11 year study of companies with and without performance enhancing cultures:
Revenue Growth: 62% per year vs. 15%
Employment Growth: 25% per year vs. 3.27%
Stock Price Growth: 82% per year vs. 6.7%
Net Income Growth: 69% per year vs. 0.09%
From the book “Corporate Culture and Performance” by John Kotter and James Heskett
What would you say constitutes your organizational culture? Is it your vision? Your mission? Your values? It’s our view that it is more likely that the “network of practices”, habits of behaviour, processes that encourage those behaviours, the systems of reward and everyday conversations that are happening in your organization (both official and social) that constitute your culture. It’s what people are saying around the water cooler, what’s being said (or deliberately not said) at meetings and in the meetings after the meetings, and it’s in the unauthorized practices people have adopted to get their work done.
When we asked CEOs about their organizations culture most of them said that there are lots of things in their culture that are great and there are also things that aren’t so great and drive people crazy, reduce effectiveness, bring down morale, and cause poor performance and results.
While working at a large US Manufacturer a few years ago we found that there was the Human Resources “official” orientation and then there was the “unofficial” orientation i.e. what new recruits were told about “the way it really is around here”. This unofficial orientation was particularly evident with a production flow system that had been in existence for countless years. People joined the organization and were given a thorough grounding in this system. However, within hours of being on the job, they were unofficially educated on how they must circumnavigate the system if they were going to get anything done. Almost everyone knew the story of how the system didn’t work and what practices allowed them to get around it and get their jobs done.
It was interesting that in our early work there, we couldn’t find a single person who had ever actually used the system the way it was designed to be used. We pointed this out and suggested that we work on finding out what didn’t work about the system by using it the way it was intended to be used for a two week period. People were surprised to discover that while there were one or two minor issues to deal with, largely the system worked well and productivity improved. This is a perfect example of how organizational culture gets in the way.
Are you aware of the practices and conversations that constitute your organizations culture? The first step in bringing about a transformation in organizational culture is “noticing”, being aware of, observing the conversations and practices that make up the culture you have. Are people’s practices and conversations consistent with “My life sucks”? Or are they closer to “I’m great… and you’re not”? Are there signs in the everyday practices and conversations that suggest the culture might have more of a “We’re great” flavor?
Once you have begun to notice – you can begin to transform this network of practices and the structures that support their existence.
We have found that having people aligned around a future, created from resonant values, completely alters organizational culture. Getting everyone from the executive suite to the front line staff to pull in the same direction and head for the same destination has people act and behave in new and innovative ways. It’s not as difficult as you might think. If the figures on the right (above) are closer to your business performance than the ones on the left and you’d like to start to change that click here to see our video: Why do strategies fail?
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