New research shows (perhaps only confirms what we have always assumed) that culture, engagement, and employee retention are now the top talent challenges business owners are focused on.
Gallup’s latest research shows that only 31% of employees are engaged at work (51% are disengaged and 17.5% actively disengaged). These numbers can be directly influenced by culture and the organisation’s leadership who are the custodians of their organisation’s culture.
People now believe that culture has a direct impact on financial performance. As the saying goes, “culture eats strategy for lunch”.
What is Culture Anyway?
Culture is a big and somewhat vague term. Some define it as “what happens when nobody is looking”.
In reality, it’s much more complex. Culture is the set of behaviours, values, reward systems, and rituals that make up an organisation. You can “feel” culture when you visit a company, because it is often evident in people’s behaviour, enthusiasm, and the space itself.
We visit a lot of companies and can often sense the culture in a few minutes. Are people busy and working with customers? Or are they quietly working alone? Do they get in early and leave late. Is the office beautiful and inspiring with values and icons around, or is it messy and busy? Is there a sense of order or a sense of family? Do employees roll their eyes when asked about the organisations leadership? All these clues help diagnose culture.
The Competing Values Framework, by Kim Cameron and Robert Quinn, groups organisational cultures into four types and their research shows that most teams fall into one of these four types. You can diagnose your culture using tools like theirs (and others) and it will help you align your values and hiring to the culture you want to build.
The Competing Values Framework received its name because the criteria within the four models seem at first to carry conflicting messages. We want our organisations to be adaptable and flexible, but we also want them to be stable and controlled.
The framework has four quadrants:
- Internal Process Model: based on hierarchy, emphasis on measurement, documentation, and information management. These processes bring stability and control. Hierarchies seem to function best when the task to be done is well understood and when time is not an important factor.
- Open Systems Model: based on an organic system, emphasis on adaptability, readiness, growth, resource acquisition and external support. These processes bring innovation and creativity. People are not controlled but inspired.
- Rational Goal Model: based on profit, emphasis on rational action. It assumes that planning and goal setting results into productivity and efficiency. Tasks are clarified; objectives are set and action is taken.
- Human Relations Model: based on cohesion and morale with emphasis on human resource and training. People are seen not as isolated individuals, but as cooperating members of a common social system with a common stake in what happens.
They are four subdomains of a larger idea: organisational and leadership effectiveness. The four models in the framework represent the unseen values over which people, programs, policies, and organisations, live and die.
The Competing Values Framework
The authors Cameron and Quinn have stated that when thinking about your organisation’s culture and whether it is effective there are three issues to consider:
- Type (what is your culture),
- Strength (how strong is it), and
- Congruence (how consistent is it).
Various pieces of modern research shows that culture and employee engagement are tightly linked (“culture” vs. “climate”), but not the same thing. Culture is slow to build, persistent, and hard to change. Climate can be changed quickly.
When you communicate and honour culture, people know what to expect and feel comfortable. Just as important the climate must support it.
As businesses grow, the culture will often shift. Sometimes an acquisition or the recruitment of a large number of employees will damage a well-honed culture.
Many HR and management practices will drive or support culture:
- Do you value employee development?
- Are people empowered to take charge or do they follow the rules?
- How are people promoted and why?
- Will you be rewarded for playing politics?
If you’re focused on culture, we encourage executives and HR teams to think about the “total employee experience”; everything from the coffee in the coffee machine to the organisations communication of management’s needs and expectations will play a role.
Once Again it Comes Down to Leadership
Ultimately, culture is driven by leadership. How leaders behave, how they execute strategy, what they say, and what they value drives culture.
In most thought leadership pieces the major factor associated with an individual’s recommendation of their company as a place to work is “quality and trust in leadership.”
So the selection of leaders, development of leaders, and the coaching of leaders are all critical to building the right culture. Companies that focus on building great leaders spend almost 3X the average on leadership development, and they get a tremendous return for it.
Clever organisations now rely on culture to screen all hires by trying to see if they are “going to fit in with the rest of us.” When you focus on culture as strategy you find that some people just won’t fit, regardless of their skill sets and reputation.
When recruiting, these businesses are seeking to guard their culture by choosing people with a strong affiliation to team work or exceptional collaborations skills.
Time and time again we hear “our business will be more successful when the economy recovers”, or “once we get that new equipment things will be great for our business.” Although each statement is correct there will never be a long period of perfect business conditions. Therefore such statements are symptoms of leadership failing to take responsibility. The organisation’s leadership must be focussed on ensuring the organisation’s culture is healthy and congruent with the need for the business to compete successfully in its markets. Leaders cannot expect accountability from employees if they use excuses to cover their inadequacies.
Thankfully through strategic planning and focussed effort, both leadership and culture can be advanced, enhanced and changed to deliver a culture that is appropriate to deliver a competitive and productive business.
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