HomeAnalysisImportance of organisational culture

Importance of organisational culture

A lot is said about culture as an imperative to organisational operational efficacy. Particularly, there has been debate on the link between culture and strategy.

By Robert Mandeya

There is a dietary line of argument that posits that a company’s culture is a greater determinant of success than competitive strategy. There is an overwhelming number of people who embrace the notion that culture is imperative for sustained success.
In my years in Executive Coaching and Corporate Education, I have noticed that there is a crop of company leaders who subscribe to the notion that if you get culture right, success follows. This is not far from the truth in the sense that a good strategy strives well in a good culture.

Organisational culture

One popular description that is simplistic, yet effective, is that, it is the way people in an organisation do things. Another definition, based on the work of Ned Herrmann, (1996) deals with the collective ways that people may think, especially the leaders’, owners and managers of the organisation. He describes organisational culture as, “the common pattern of behaviours influenced by our thinking and feeling preferences”.

The onion, as a metaphor itself, and peeling back the onion’s layers to reveal its core, is already symbolic of the understanding of culture. The outer layer or skin represents those visual symbols of culture. These include the larger physical artefacts such as a flag, building, airport, or even a jumbo jet. The size, shape, colour or location is all physical and visual symbols of strength, power, status, wealth or success. At a more micro level, the logo, a slogan, a tag-line, a song, a jingle, a poster, calendar, diary or other “give-aways” can be symbolic of the culture. It is a form of “culture branding”.

Business and culture

It goes without saying that businesses are economic, as well as human entities, and need to be built on a solid base of sustainable competitive advantage.

Culture can reinforce strategy, as it does in many successful companies which advance a strategy of customer convenience.

However, this cannot prevail if a strategy is poorly conceived or the company faces competitors with superior strategies, resources, and positioning. As Damon Runyon wrote, “the race is not always to the swift or the victory to the strong, but that is how you bet”. In the business world, it is easy to take a handful of current winners, give them a back story about their cultures and conclude that “authenticity and values always win out”. Always? Walmart is the winner in retail. McDonald’s serves more meals than anyone else. And yet they are hardly praised as paragons of superior culture.

Heroes in organisations

These are the people who shape or define an organisation’s culture. Heroes may include the founders of an organisation, or possibly the chief executive, key top managers or performers.

For a research and development company, it might be a senior scientist, a Nobel prize winner or the employee that has the most innovations, patents or published articles. For a sales organisation it may be the top sales performer. All organisations have such heroes, many of whom may be role-models. However, all leaders should be role models. In larger organisations they may be personified by the Steve Jobs, Bill Gates or Henry Fords of the corporate world. In smaller organisations the visionary or entrepreneurial leader. For a team, it may be the supervisor who is a team leader.

Culture and management

If a culture is the collectivity of values and behaviours, then “mapping” the culture would require ways of measuring these. By clarifying and prioritising values — the strong beliefs shared by employees — we can obtain a “value map”. Further, we can group and classify them as productive or progressive etc — depending on our criteria for these. There is, however, a possible paradox here; as criteria for productivity or effectiveness in itself — is a value judgement.

In actual fact, values form the core of the culture as with the onion, it is the deepest layer and therefore harder to see. We can infer what these values might be — by observing the shared practices and the cultural networks at play — especially the heroes or role models. Sometimes these values are formally stated in organisational documents, like the annual report or promotional literature. Sometimes they are written up in large letters, framed or mounted, and hung on walls in boardrooms, reception areas or factories. These can then be said to be “shared”, but still not necessarily so widely, that all employees can articulate them.

Strong cultures display a consistency in both easy and difficult times. Friendly service, quality decisions or reliable products must be predictably consistent, year after year. In this whole matrix of culture and strategy people matter more than machinery, products, and real estate. It is people who invent and build. It is people who support and serve customers.

Your workers create or undermine value, cultivate or kill relationships, drive or reduce success. A well-conceived strategy living in the hands of unhappy, misdirected, misinformed people is a sure way to a slow and painful death. There is no comparison to being in the hearts and hands of energised, informed, and motivated people.

Ultimately, the culture versus strategy question is a false choice. It is like asking whether you would rather back a great poker player with weak cards or an average player with great cards. You are more likely to win when you have both: a great player and great cards. The same goes for culture and strategy. You do not have to choose. Culture does not eat strategy, and the company that lets culture do so is likely to starve. 

Recent Posts

Stories you will enjoy

Recommended reading