January 4, 2011
Build a corporate culture that correlates to the level of performance you want your company to achieve.
For many organisations, the Global Financial Crisis has caused a tightening of belts and a review of business practice. Doing the “right thing” by employees – perks and rewards – seemed at odds with focusing on profits. They have cut back on the “extras” that lead to the results they were actually chasing. It leads to an organisational culture that presents disengaged and demotivated employees – hardly what the leadership team would want to help them sail back into calmer seas!
Research has shown that there is a strong correlation at work – financially stronger companies (ROI of 30% or higher) are also strong in specific, measureable aspects of corporate culture, whereas financially weaker companies (ROI of 9% or lower) score low on those same measurements of culture. So perhaps culture isn’t such a ‘soft’ or ‘fuzzy’ element of organisational life after all – it’s actually one of the critical components of success!
So how does a leader go about building a culture that support performance? According to the Denison model–a model of corporate culture that addresses these issues–there are four interwoven corporate culture traits:
Mission: the long-term direction and purpose of the organisation
Involvement: the company’s ability to drive commitment and to develop ownership with employees
Consistency: the values, agreement and coordination that hold the company together
Adaptability: the company’s ability to read and scan the business environment and to respond to change
Companies measuring high in all components have a dramatic financial advantage over organisations that are weak in these areas. Companies at the bottom perform just as you’d expect: They’re sluggish, wasteful and out of touch with their customers.
What are the components of culture that you need to encourage in your organisation to build a performance culture and how will you do it?
Once you have these answers, really commit to their implementation. Every decision the management team makes needs to be mindful of the impact they will have on the culture you’re fostering. Let your employees participate in the changes – the culture needs to become part of the air your employees breathe. Once they’ve accepted the change as a part of “the way we do things here”, and they’re confident that it will continue, then you’ll start to see the true improvements in performance.