Marketing

The Importance of Organizational Culture

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The Importance of Organizational Culture

Work and organizational culture is a buzzword across North America, but what is it exactly? Why do so many businesses need to grasp it or completely miss the mark while implementing it? 

Over two-thirds of Human Resource leaders think their organizations lack positive workplace culture to drive their businesses forward. Although the need for improvement is understood, a whopping 85% of organizations fail to change their organizational cultures sufficiently. 

In this article, we’ll dive into some dialogue and possible solutions to improve your organizational culture at your business. 

Organizational Culture - What is it?

Before we discuss how to improve it, we should understand what organizational culture embodies. The word culture means to tend or cultivate. Organizational culture is hard to put on paper since it’s defined by the intangible values, attitudes, and behaviours of leaders and employees in a company. Note, this should be not confused with a mission statement or company goals (although they can help shape culture). 

Think of organizational culture like a garden. In your company, there are different plants with different strengths, and needs for water or sunlight exposure. The garden needs to be tended to survive and thrive under variable conditions and seasons throughout the year. Your goal may be to “ensure the garden grows by 20% annually”, but this doesn’t define your tactics or behaviours in achieving that goal. 

Organizational Culture is not created through documents or PR statements, but through authentic, natural behaviours. You may see company culture reflected positively or negatively depending on how the CEO reacts to a business problem, how the team initially reacts to using new software, or how a manager corrects an employee's mistake. 

Types of Organizational Cultures

Although there are even more specific cultures that develop, there are 4 main cultures based on two competing values: Flexibility vs Structure and Internal vs External Focus. 

  • Adhocracy Culture: Dynamic and entrepreneurial. Startups and companies like Google & Apple are generally this way. These companies care less about policies and structure and prefer constant innovation and challenging the status quo. Issues may include future ethical/compliance problems from being too fast-paced. 
  • Clan Culture: Collaboration and people-oriented. This culture embodies a strong common interest and they have supportive work environments. Team collaboration puts members on equal footing and these companies have superior customer service. Issues include that this culture may not be scalable as the business grows. 
  • Hierarchy Culture: This is a very structured culture and is the typical corporate North American culture. Job duties are clear and streamlined, and risk is mitigated through standard operating procedures. Examples include oil/gas, security, health insurance, government and financial institutions. Issues include a lack of market responsiveness and inflexibility. 
  • Market Culture: Results-oriented and competitive. Organizational cultures in this category are externally focused on customer satisfaction and on internal profit margins. There is constant demand to be creative and push new products before competitors do. Examples include Amazon, Tesla and General Electric. Issues include employee burnout due to constantly high expectations and lack of employee satisfaction. 

Why Organizational Culture is Important 

Would you be surprised if we told you that organizational culture affects your entire business? 

When the work culture aligns with employees, they resonate with your company and feel supported and valuable. It’s also one of the best methods to attract the greatest talent for your company. Over 75% of job seekers consider organizational culture before applying to a position. Long-term employee satisfaction is also increased in conjunction with culture. Almost two-thirds of employees stay at their jobs due to positive organizational culture alone. 

Signs of Great Organizational Culture

There are a few telltale signs of exceptionally positive organizational culture. Note that every company is different, so you may not see every single aspect on this list. However, ensure you hear back from your employees and see if there are any of the following qualities: 

  • Goal Alignment: Employees are motivated to push for the same goals towards a single, clear mission or vision. 
  • Appreciation: Offering a public thank you, a promotion or a bonus or wage increase recognizes employees for their hard work.
  • Trust & Integrity: Employees can rely on each other in times of need and express themselves. Honestly and transparency aligns with trust as well. 
  • Performance: Employees motivate each other to excel in their areas of expertise which improves productivity and profitability. 
  • Teamwork & Collaboration: While fostering communication, teamwork and respect, employees will feel happier doing tasks and get more accomplished. 
  • Safety: Not just physical safety, but psychosocial safety makes employees feel more open to sharing their individual ideas. This way, more ideas can be contributed to the table and organizations can avoid the dreaded “Group Think”. 
  • Innovation: Applying creative, outside-the-box thinking will help your company gain more from technology, resources and markets. 

Steps to Build Exceptional Organizational Culture At Your Workplace

Creating an organizational culture that’ll drive your business ahead is a complex task. Here are a few steps to ensure you have a roadmap for positive, long-term work culture results: 

  1. Recognize Contributions
  2. Enable Employee Voice
  3. Follow Through On Your Company Values
  4. Connect Team Members 
  5. Focus on Employee Learning & Development 
  6. Personalize The Experience For Each Employee

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