The current economic climate is posing real threats and challenges to many organizations’ longevity. The applicability and sustainability of organizations across the world is being questioned, resulting in many organizations wondering how to effectively respond. How organizations adapt and respond to the external market is crucial to maintaining competitiveness. Organizations that avoid the external market pressures and choose to do nothing for example; ignoring the profit and loss figures and maintaining the mindset that the market will turn around and get better soon, risk being left behind and ultimately being out of business.
So how do we respond to these market pressures?
Research in the field of organizational culture has shown a link between an organization’s culture and profitability. A report by Sanders and Cooke1 explored the relationship between the type of culture (constructive, passive/defensive, aggressive/defensive) with profitability. The researchers found a strong relationship between profitability and constructive cultures, work environments where people approach tasks and interact with others in positive ways to achieve personal and organizational goals.
In constructive cultures people were confident, collaborative, innovative, achievement focused, and were able to take moderate risks. Sanders and Cooke1 found these constructive cultures had greater financial returns, increased job satisfaction, reduced stress and enhanced teamwork and collaboration. Constructive cultures share many of the same characteristics as a “Lean” culture where employees are empowered to identify and reduce waste.
Below are some tips for how to change your organization’s culture into a more constructive, collaborative, and Lean environment.
1. Assess your organizational culture
It is important to regularly assess and understand the current mindsets and behaviours of your workforce. To do this, do not just assess culture by asking the leaders what they think. You will often find their perceptions are consistent with the wider organization but this does not engender trust and inclusiveness. It is important to obtain feedback from a representative cross-section of the organization.
2. Recognise and reward
Recognise and reward the right attitudes and behaviours as well as performance is critical to motivation and engagement. It is equally important to get the reward and recognition right. Often money and energy is wasted on reward and recognition initiatives that do not have the desired long-term impact. People are motivated by different things. It is essential to understand what intrinsically motivates your employees.
3. A clear inspiring vision
Don’t underestimate the power of a vision. People are motivated when focusing on a point in time in the future. Don’t be afraid to have micro-visions that are 3 or 6 months.
4. Encourage imagination and innovation
Encouraging employees to use their imagination and contribute to innovation is vital for a competitive advantage. Fostering a culture of feedback, analysis, and collaborative strategic planning is important for differentiation and responding to challenging market conditions. Involving employees at all levels when strategizing will not only provide a breadth of insight and ideas to innovation, buy-in to action these ideas will be increased. In addition having avenues in place to welcome and capture ideas and feedback is important for continuous improvement.
5. Lead by example
Start leading by example. The contagious nature of behaviours in the workplace is very powerful. Demonstrating positive behaviour will have an instant impact on the vibe of the organization. For example, say hello in the morning to everyone in the office by name and see how quickly others will follow.
Now changing your organization’s culture is not an instant overnight process, it takes continued perseverance, strategy and leadership. This article provided a brief insight into organizational culture and it’s link to business performance. The articles below offer further reading to expand on the points made here. Of course, I am here to answer any questions you may have about this topic.
Further Readings
1. Sanders, E. J., & Cooke, R. A. (2012). Financial returns from organizational culture improvement: Translating “soft” changes into “hard” dollars. Human Synergistics. Retrieved from:http://www.humansynergistics.com/docs/case-studies-and-white-papers/financial_returns_from_culture_astd_v-2-0.pdf?sfvrsn=0
2. Acar, A.Z., & Acar, P. (2012). The effects of organizational culture and innovativeness on business performance in the healthcare industry. Journal of Social and Behavioural Sciences, 59, 683-692.
3. Yildirim, N., & Birinci, S. (2013). Impacts of organizational culture and leadership on business performance: A case study on acquisitions. Journal of Social and Behavioural Sciences, 75, 71-82.
