What is culture?
It is the pattern of basic assumptions that a given organization has invented, discovered or developed in earning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.
Professor Schein E.H.
It is usually reinforced by formal personnel policies, procedures, recognition, rewards, rituals and ceremonies.
Some definitions of culture include:
- The way we do things round here
- Collective understanding of business units and employees
- A pattern of assumptions that the organizations learn as they solve problems of external adaptation and internal integration
Leaders & Culture
The dynamic processes of culture creation and management are the essence of leadership, hence suggesting that leadership and culture are two sides of the same coin. The unique function of leadership that distinguishes it from management and administration is the concern for culture. Leaders create culture and must manage and sometimes change culture. One of the main elements of that mysterious quality (charisma) of a leader is his/her ability to communicate major assumptions and values in a vivid and clear manner.
Leaders embed culture by:
- Setting strategic direction of the organization based on organizational values and business objective
- What They Say & Do – Walk the talk
- What they pay attention to, measure and control on a regular basis
- Reaction to critical incidents and organisational crises
- Allocation of scarce resources
- Role modelling, teaching and coaching
- Effective recruitment, selection, promotion, developing and deploying human capital of the organization
Following parameters shape up and influence culture of an organization:
The nature of your business, and the environment you operate in, are big determinants of culture. Resultantly, a manufacturing company, process chemical company, retail or insurance company have different business drivers, operate with different levels of competition, on different time frames and therefore will have entirely different cultures.
These leaders are the visible demonstrators of the organizational culture and values. They are the enablers, yet can be derailors of culture. It defines ‘what you have to do to succeed around here’. If the leaders work till 8 o’clock every night and weekends, then that becomes part of the culture. If they dress casually, come to work late but produce brilliant sales figures that also can make them cult figures.
The basic concepts and beliefs of the organization usually epitomized by the leaders. The value system is at the heart of the organizations’ culture, defining success in very concrete terms for the employee. Values are not just about “what you do” but “how to do” – thus balancing between work and tasks that are important, and the desirable behaviours and values.
Rites and Rituals
These are systematic, daily routines of life in the company. They demonstrate to employees what is expected of them. They range from regular meetings and wage and salary negotiations to the more ceremonial occasions such as star salesmen presentations, annual chairman’s statement, retirement parties, Christmas celebrations and so on.
The Cultural Network
This is the primary, and informal, means of communicating the company values and the leaders’ mythology. It is the ‘carrier’ of anecdotes, whispers and inside stories about how things really work. Being tapped into this network is an essential part of knowing how to get things done in a company. The effective manager will ignore this at his peril.
Types of Culture
There are four generic types of culture broadly identifiable:
- The hard ‘macho’ culture (‘find a mountain and climb it’)
A world of individualists who regularly take high risks and get quick feedback on whether their actions were right or wrong. (Entertainment industry, police, army, construction, management consultancy, advertising are some examples).
- The work hard/play hard culture (‘find a need and fill it’)
Fun and action are the rule here. Employees take few risks, all with quick feedback. They are encouraged to maintain a frenetic pace of relatively low-risk activity. The customer is king and customer service permeates this culture. The team, rather than the individual, is important. (Sales organizations, retail shops, computer companies, high tech, mass consumer sales like McDonalds, life assurance companies are some examples).
- The bet-your-company culture (‘slow and steady wins the race’)
It is a high-risk, high front-end investment, slow feedback culture, with long decision cycles often taking many years. Top managers’ decisions can sink the company years down the line. The watchword is ‘deliberateness’ and ‘get it right’ rather than action at any cost. Vision, strategic thinking and long-term perspectives are important characteristics. (Oil companies, architectural firms, capital goods manufacturers, aircraft companies, public utilities are some examples).
- The Process Culture (‘it’s not what you do, it’s the way you do it’)
A low-risk, slow feedback culture where the values centre on technical perfection, calculation of risks, attention to details etc. The lack of feedback forces employees to focus energy on how they do something not what they do. The emphasis is therefore on minutiae, memos, filing, records and technical refinement. Status symbols are also very obvious. (Insurance, banking, financial services, building societies, government departments are some examples).
Culture is the most difficult organizational attribute to change, outlasting organizational products, services, founders and leadership, and all other physical attributes of the organization. Its dynamisms and intangible nature makes it one of the most important, yet challenging organizational pillars of growth. It is therefore imperative for leaders to not only create enabling cultures to maximize employees’ productivity, but also continuously assess the culture to steer it in the right direction.
There are many techniques to assess an organization’s culture, both qualitatively as well as quantitatively. However, the major challenge is to link culture with business profitability and identify cultural levers that driver growth. Denison Model is one of the leading culture assessment methods that can bridge the gap between an organization’s internal and external business factors, and align its culture with growth plans, both in short as well as long run.
Denison model assess culture in four major categories, which are further divided into three indices each. It includes:
Mission: Defining a meaningful long-term direction for the Company.
- Vision: Do you understand why we are in business? Does our vision excite/motivate you? If so why? If not, why not? Does the vision create ‘context’ for the work that you do? What would help make the vision ‘real’ for you?
- Strategic Direction: Do you know what the key areas of priority are for us as a group/organization for the next 2 – 3 years? Do you believe that our strategies will have the desired impact? Do our strategies help guide your decisions? What do you need to increase your understanding of the key organizational strategies?
- Goals & Objectives: Are you clear about the short-term goals that you are trying to achieve? Is progress towards those goals being measured? Do you feel some ‘ownership’ of the goals? What else do you need to achieve the goals in your area?
Consistency: Defining the values and systems that are the basis of a strong culture.
- Core Values: Are you clear about what our core values are and what they mean? What would you say is ‘valued’ most in this organization? What is ‘valued’ least? Are you able to apply the values in your day-to-day activities? What could we do to make the values more ‘real’?
- Agreement: Would you say that we are all in agreement regarding our key work objectives? How effectively would you say that we resolve issues/problems that arise? What could we do better to resolve issues in a way that generates more win-win solutions?
- Coordination & Integration: Do you understand how your work impacts others? Do you believe that your colleagues across the organization have common goals? Are you kept informed about work in other areas that impacts you? Do you keep other’s informed about the work that you do that might impact them? What could be done to increase the level of coordination and integration in our organization?
Involvement: Building human capability, ownership, and responsibility
- Empowerment: What does empowerment mean? What does it look like to you? What do you find empowering in your work? What prevents you from feeling empowered? Can we come to agreement about what empowerment looks like in our organization/group?
- Teamwork: Do you feel like you are part of a team? Is our team working as effectively as it can? What if anything, gets in the way of teamwork? What should we be doing that we are not currently doing to improve our team’s effectiveness?
- Capability Development: How are we doing with training? Are there specific skills that you think we lack as an organization/group? Are we building the skills and capabilities that we will need to be successful in the future? Do you believe that your skills are valued and being developed? Do you have a development plan that you believe is helping you to learn and grow in your job?
Adaptability: Translating the demands of the business environment into action
- Creating Change: How receptive are we to new ideas and suggestions? Do we ever hear ourselves (or others) say ‘That’s not the way we do it around here?’ How well are changes communicated? When do changes meet the most resistance? How could we become more proactive about driving change?
- Customer Focus: What do we currently do to get feedback from our customers (internal & external)? What happens to the feedback we get? Would you say that we all have a good understanding of our customer’s needs? What can we do to better serve our customer(s)?
- Organizational Learning: What does risk taking at work mean to you? Can we get better at what we do without trying new things? What happens when mistakes are made around here? Do we try to learn from mistakes or is our first reaction to blame someone? What can we do to encourage more innovation?
DOs and DON’Ts of Culture
- Drive, don’t be driven
- Base the culture on principles, not relations
- Top management establishes the organization’s culture , and defines what will and what will not be acceptable behaviors
- Reward and promote people whose behaviors are consistent with desired cultural values
- Stimulate progress and preserve the core
- Adapt externally – integrate internally
The bottom line for leaders is that if they do not become conscious of the cultures in which they are embedded, those cultures will manage them. Cultural understanding is desirable for all of us, but it is essential to leaders if they are to lead.
- Ashridge on Corporate Culture
- Schein E.H. (1984) Coming to a new awareness of organisational culture. Sloan Management Review, p. 3
- Leading Culture Change in Global Organizations – Aligning Culture and Strategy by Daniel Denison, Robert Hooijberg, Nancy Lane, Colleen Lief
Profile of Author
Mr. Mohammed Ali Imam Naqvi is currently the Head of Compensation & Benefits at Fauji Fertilizer Co. Ltd, in HR Division. Prior to this, he was the Head of OD at FFCL. In a career spread over 16 years, he has been exposed to multi‐dimensional business, organizational and human processes ranging from organizational and leadership development, process improvement and efficiency enhancement, job and organizational structural analysis, talent & succession management, competency modeling, quality control, ISO & 6‐Sigma quality initiatives, IMS (ISO 9001:2000, ISO 14001, OHSAS 18000) auditing, internal training for quality & technical programs, equipment designing and plant operations.