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Does Culture Really Matter? Um… Yes

As the US economy shifts and full employment is more the norm than not, the culture of an organization now ranks as high, if not higher than, actual cash compensation.  So “Does Culture Really Matter?”  You bet it does.
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Does Culture Really Matter?  Organizational culture used to be about a sign on the wall and a few pleasant “rah rah – let’s go team” type phrases and that was it.  Do your work.  Now.  But as the US economy shifts and full employment is more the norm than not, the culture of an organization now ranks as high, if not higher than, actual cash compensation.  So “Does Culture Really Matter?”  You bet it does.

 

Culture is not a sign on the wall.  Culture is not a goal.  Culture is a set of expectations on behaviors that are needed to achieve the Mission and goals of an organization.  Culture is what you Enact, Encourage and Enable.  While culture gets talked about often, it is usually the purview of a Human Resources Department which is singularly unfair and poorly done.

 

Culture starts with Leadership.  Leaders set the culture to drive the business forward and grow financially.  Enterprise growth is always one of the key goals; without growth, there is no enterprise.  But HOW the growth is achieved is where the rubber meets the road.

The Lone Gun Approach

Does Culture Really Matter_ Umm... Yes!

In most small businesses, the leader is also the owner and the culture reflects the values and interests almost entirely of the owner.  The Lone Gun Approach is the owner of the business as sales, marketing, operations, finance, accounting – they wear multiple hats and source to partners for support services.  They often have subordinates who work for a set wage with or without paid benefits.  In the Lone Gun Approach, opportunity is chased by the owner/leader and others execute a very concrete set of processes also organized by the leader/owner.  Employees may be rewarded for customer satisfaction, but their level of engagement is often low and their level of empowerment is even lower.  In the Loan Gun Approach, 95% of decision making is in the center office.  While this is productive in small businesses, it is also the gate to exceptional growth.  Exceptional growth requires employees to be able to own and validate their work, serve customers and make decisions in the field without constant oversight from executives.  This is often done in ranges of responsibility to make decisions.  Is this more scalable?  Yes.  Is this a culture of growth?  No.  Is that the objective for the business?  Probably not.

The Collocated Group Approach

In the Collocated Group Approach, a group of leaders, often all peers to each other, set culture to deliver the Goals of the business.  In 99% of these organizations the culture is “Do your job.”  Because all of the leaders are peers, and few subordinates exist in the organization, culture is an afterthought.  Learning and developing employees is subject to the interests of individual leaders and not really centralized with a goal of producing “bench strength” or driving exceptional growth.  The Collocated Group Approach also has limitations because the growth of the organization is largely dependent on the availability of the leaders to sell, market and deliver.  This is not a rapid scaling model but can be scaled if there are a number of other leaders who can enter the organization and produce.  This is commonly found in consultancies and service providers.

The Enterprise Approach

In the Enterprise Approach, organizations are larger, they have multiple functions clearly defined and while the goals of the organization are common, there are interdepartmental goals, varying performance metrics and processes that all need to be managed and lead.  In the Enterprise Approach, the Executive Team, typically hierarchical, plans the goals and strategies for the business.  A conversation on Culture is lead by Human Resources and executives based on current executive management theory or what others are doing in the market and peer insights.  It is uncommon for an organization to map Culture to Behaviors and Behaviors to Outcomes and Results.  Enterprise Strategy is often an expression of a dollar goal and the Culture is what it takes to make the Enterprise a “nice place to work” or one that can win an award for “Best places to work”  But often, none of the Culture statements detail the specific behaviors to achieve the results and the results often include employee engagement as participating in corporate events but not necessarily being engaged in their every day work.

The Agile Networked Approach

DCRM-Agile

The final approach we have seen we call the Agile Networked Approach.  The organization sets performance goals and results and then pushes culture down to individual functions and groups and allows the “local leaders” to set culture in the group.  What you get is a highly customized culture for each locality (function) that is tied to the team and the leader.  And when the team or the leader leaves – then it starts again.  The culture is temporary based on the goals set for the functional leader and often do not align across the organization.  You get “unit envy” where sales is richly rewarded with benefits and bonuses and operations gets a few niceties for delivering on time and at spec.  Is that a culture for growth?  Not really – when there is envy among functions and groups, you get disgruntled employees that can poison the culture and slow performance.

Culture Matters.  A Culture of Growth requires three things: Trust, Competence, Accountability.  To create a culture of growth, organizations need to do the following:

Eliminate Negativity

Eliminating negativity is not saying you cannot disagree or disapprove of something.  No is still a viable answer.  But saying “No, we are not able to do that right now” is acceptable and “No, that’s a dumb idea why would we do that?” is not.  Negativity includes grumbling about your work, grumbling about co-workers, grumbling about leaders, grumbling about really anything.  To eliminate negativity – your Culture has to include taking a positive outlook to everything and to seek positive outcomes.  That starts by being Grateful and allowing employees to be grateful for the opportunities they have and the includes ensuring there are opportunities for them to perform.  Employees want to be involved and valued.  When you value your employees, negativity goes away.  Valuing starts with being Grateful and when you value employees they begin to Trust in your organization.

Engage Employees

The Bureau of Labor Statistics estimates that over $3billion in time in US organizations is unproductive. Engagement is about developing and building employees and functions with personal and professional development.  Training can be both internal and external to the organization.  By engaging employees and including them in the goals, planning and execution of the business, they are more engaged with the organization and feel like they are contributing. Engaged employees increase their productivity, drive higher sales and profits, have less turnover and lower higher costs associated with referrals.  Engagement starts with Giving them information about the company, how it functions and how they contribute to growth.  Then train them so that they become expert in their skills sets and they become Passionate about their work.  Engaged, Passionate employees take pride in their work, have less errors and are more productive with systems they develop to improve and accelerate their work.  Engaging employees builds Competence.

Empowering Employees

First, employees who thought their leaders were more empowering were indeed more likely to feel empowered at work – they felt a greater sense of autonomy or control in their work, they felt that their job had meaning and it aligned with their values, that they were competent in their abilities, and that they could make a difference..... Second, employees were more likely to trust leaders who they perceived as more empowering. They had greater faith in their leaders and were more likely to put in effort without feeling that they would be exploited... we found that when empowering leadership is also about mentoring and supporting employee development, this can create a trusting relationship.

Harvard Business Review

Empowering employees is where most organizations fail – badly.  The failure is due to a lack of trust and confidence in employees to execute the way they would.  Empowering employees is the gatekeeper to a culture of growth.  If you engage employees and eliminate negativity, you have happy employees.  But empowered employees seek new ways to grow, new ways to profit, new markets to serve and new products and services to deliver.  Empowered employees own their work, take accountability for delivering on the results expected of them and work across the organization to deliver.  Empowered employees have communications systems keeping executives informed and parameters in which they are given latitude to execute.  They are Accountable, Inspiring, Connected and Opportunistic and elevate organizations to exceptional performance by frequently beating goals and then elevating their teams to celebrate the wins.

A culture of growth requires the executive team to be able to rely on their people – hire and train quality people, eliminate complaining by including and engaging employees and then empowering them based on their ability to deliver and turn them loose.  In a culture of growth, expectations are set, goals are set, performance is measured and the leaders deliver without micromanagement and significant oversight.  They work together with common goals across the organization and understand functional unit impacts to their delivery and their delivery impacting other units.  By training them on how the business works, they own their function and drive performance across the entire organization.

 

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