The construct and consequence of organization culture

An organization is a microcosm of society, operated by people with diverse skill sets and backgrounds that leverage social infrastructure and create perceived economic value in their communities. An organization's identity is a set of statements defining purpose, value and culture that are central, distinctive, and endured by all members of the organization.  

Every organization has its unique way of doing things. These could be formally documented norms or implicit and accepted behavior from employees. Behavior of employees, including their beliefs and attitudes, define an organization's culture. Most often, the prevailing culture is far removed from what is needed to meet the company goals. Business leaders must identify, define, and cultivate the culture they need to create the environment to achieve organizational goals.

The culture of an organization assures consistency and quality and impacts its performance. For example, the fun, creative, and flexible environment that is built on trust and ‘radical candor’ at Google encourages technological innovation.

Two organizations can manufacture the same product or provide the same service, but they will differ in their culture. Each will be unique in the way it functions and the values it believes in. Culture can create great differentiation in the market and set you apart from your competitors.

Constituents of Culture and Deployment 

An organization gets its culture from its policies, procedures, norms, guidelines, traditions, and the kind of personalities nurtured in an enterprise. Different tools can be used to roll out, deploy, practice, and sustain culture across various functions of the organization.

Paradigm – The business values, mission statement, and purpose as crafted by senior management and founders.

Control Systems – Processes across departments, standard procedures, operational methods, behavioral expectations, compliance, and ethical guidelines are the core fabric of an organization’s operations.

Organizational Structure – Factors such as functional and people hierarchy, reporting, governance structures, collaboration, productivity, and other performance indicators that typically form part of the organizational structure contribute to culture. Decision governance, whether it is centralized, decentralized, or follows any other method is an important dimension too.

Symbols – Logos, trademarks, office infrastructure, locations, parking spaces, and other usable structures influence culture.

Practices & Rituals – Conduct of management, board meetings, approach to team collaborations, organizational events, communications, and reports are part of the cultural dynamics.

While purpose and value are defined and practiced, culture provides the central identity of an organization. It is critical to ensure behavior is aligned to the intended culture across every function of the organization.

Culture is typically driven by leadership. It must be part of the strategic framework that includes objectives, cross-functional employee engagement, recruitment process, and more. It includes inspiring people to align to the desired culture and setting up tracking procedures. Building the right culture is a long-drawn evolution that needs sustained, undeterred focus and action.

Thesis  

A company’s culture can impact almost every part of an organization, but the why and how is often difficult to understand—their specifics can be tough to pin down and even more difficult to change.

The culture of an organization needs to be imbibed around several dimensions including learning, people, innovation, clients, outcomes, authority, safety, employee wellness, and more. The current environment is hyper-dynamic due to consumerization, disruptive innovations, divergent customer needs, and ever-demanding stakeholders – the ARR model (Adaptive – Responsive – Responsible) is considered apt for dealing with the current dynamic enterprise ecosystem.

Adaptive – The modern organization must deal with and adapt to diversified generations, distributed power centers, demanding clients, connected organizations, interdependent economies, and many more variables. This makes it important to cultivate an adaptive culture.   

Responsiveness – An organization that encourages continuous learning develops the ability to respond rapidly to changing needs. Free flow of information, experimentation, autonomy, empowerment, and transparency are characteristics that can help an organization become more responsive.

Responsible – To meet an organization’s purpose and mission, establishing practices such as ethical compliance, fair and unbiased transactions, a code of conduct, and social awareness are critical.

Culture cannot be built in a silo. The board of directors, CxO, HR organization, mid-level managers, compliance and risk teams, and employees are all equally responsible for forming the organizational culture.

IBM is a good example of the ARR model. It is over 100 years-old but it has adapted to the modern world. One of the company’s founder, Thomas Watson Jr., said that for a business to meet the challenges of the ever-changing world, it's got to constantly reinvent itself, everything except for its beliefs. IBM is thriving because of its culture of inclusivity, feedback, transparency, and growth for the business and the individual. 

Conclusion 

The current business environment is highly volatile, and culture is highly susceptible to change. A strong foundation of values that defines organizational culture can withstand external influence. Being aware of cultural vulnerabilities and staying vigilant to changes can prevent crises. A culture that allows employees to express themselves, innovate, take responsibility, and collaborate with others to achieve and sustain desired performances can achieve business success.

The article has been written by Lax Gopisetty, Vice President, Global Practice Head for Microsoft Business Applications & Digital Workplace Services, Infosys