ESTIMATED READING TIME – 5:40
Learning goals for this activity
– Understand why establishing organizational culture is important to talent optimization.
– Be able to list and describe the three best practices that will align culture to business strategy.
– Be able to map a given business strategy to appropriate values and behaviors.
– Describe some recommended approaches for closing the gaps between current and desired culture.
Why establishing organizational culture is important to talent optimization
Any senior team should view establishing their company culture as one of their most important activities as leaders. Culture is a result of deliberate, intentional action. Not only should an organization’s structure have tight alignment with the organization’s business strategy, but a purpose-built culture should also be consistent with that strategy. Culture, along with organizational structure, is a lever that the most successful leaders use to drive performance. Leaders can purposefully shift an organization’s culture by modeling desired behaviors.
Organizational culture can either help or hinder the way your employees identify with your company and its mission. Organizational culture represents your business’s core values, rewarded behaviors, and, ultimately, performance drivers. Culture plays a significant role in driving the level of employee engagement. When employees don’t feel connected to your company culture—or your culture is toxic or non-existent—they disengage. Workers who aren’t in tune with your company culture, values, or leadership will never feel like they belong, and because of that disconnect, they’ll never put in discretionary effort or go the extra mile to help your business succeed. Because of this, smart organizations actively manage their culture.
Follow these three best practices to create a culture that aligns to your business strategy:
- Map cultural factors to the strategy.
- Identify current culture fit in relation to business strategy.
- Develop and execute a plan to address culture gaps.
1. Map cultural factors to the business strategy.
This part is simple: A positive culture is one whose core values align with the business strategy. You have to decide and choose which core values and behaviors you want employees to embody.
For example, if your company operates in a regulated environment that requires careful attention to working with process and protocol, you want a culture that values critical thinking, following standard operating procedures, and managing risk. Your culture won’t need to be as focused on innovation and new product development; while these may be worthy pursuits, they don’t align with your goals.
Translate your business strategy into values, norms, and practices that will directly support it. You can use the same strategic inputs you used to map your leadership competencies.
2. Identify current culture fit in relation to business strategy.
Assess your organizational culture by using a combination of engagement surveys, focus groups, and simple observation. Examine the following dimensions:
- Jobs: Do your employees feel their jobs are a good fit? Do employees believe they add value to the business? What frustrates your employees about their daily tasks?
- Practices: How do teams and employees collaborate? How are things communicated? How are decisions made? How are tasks executed?
- Values: What beliefs and values support your employees’ actions and decisions?
- Leadership: Are leaders empowering their direct reports or micromanaging them?
- Behaviors and rewards: What behaviors get rewarded? How is performance evaluated?
- Goals: Do employees understand and align to your strategic goals?
- Compensation strategy: Is it reinforcing the behaviors that matter in your culture? For example, compensation models may encourage individual performance or emphasize team results and collaboration. Either will foster different behaviors.
- Benefits strategy: Are your benefits reinforcing your cultural values? For example, asking employees to clock in every day or offering unlimited vacation time both have a direct impact on the level of trust in your organization.
You’re likely to find areas where your culture aligns with your strategy, but you’ll also likely find gaps. Identify any changes you need to make to your current culture to better support your business strategy.
3. Develop and execute a plan to address culture gaps.
There are many ways to change your organizational culture over time. These include making changes to your rewards system, how you communicate and make decisions, who you promote, or how you set up your physical working environment to better align with your strategy.
For example, if your strategy requires improved cross-functional collaboration, create a rewards system that recognizes individuals who exhibit this type of behavior. When employees see a peer recognized for sharing information, resources, and suggestions, those employees will be more likely to do the same in the future.
Execute your cultural change plan by:
- Being explicit about the culture you’re fostering
- Building transparency and trust by communicating often about the changes you’re introducing—and why
- Maintaining transparency into your business strategy; there’s no such thing as too much communication and clarity around your strategic intent
- Anticipating friction and tension, and developing ways to listen to employees, welcome their ideas, and, when necessary, adapt your plans accordingly
- Setting new expectations for performance, and visibly recognizing and rewarding behaviors that embody the new values and norms
- Hiring people whose behaviors are aligned with your new culture; they’ll become your new change agents
- Promoting current employees whose behaviors best fit your new culture; not only will they be change agents, but their public recognition will show others how the path to promotion requires being aligned with your new culture