Why is Culture Important?
Why is culture important by Chris Heron.
Organisational culture represents a company’s overall values and way of living and working and involves lots of elements that differentiate an organisation from its competitors. It is the narrative of the people in the group, individually and collectively. That is why culture is important. How to do something with it we will try to explain to you in this article.
Cultures are made up of:
- working methods
- stakeholders relations
- social engagement
- the fun the team has at work
- the working environment
- the dress code!
Company structures are based on old industrial models dating from before the early 20 century and many have not progressed at all.
Fifty years ago, factories could produce the same product or service for decades without needing to change their business model or products, but our interconnected world has accelerated the speed of change and therefore the need for companies to adapt and change constantly.
The organisation of businesses used to be organised in a strict hierarchy and micro-management was the key process.
The impact of technology and mechanisation has automated many tasks and changed hierarchal needs and work practices.
Investment has moved largely off the Balance Sheet where it was historically spent on plant and equipment and onto the P & L where expenditure is on people, brand, technology, and training.
The focus is on how quickly your people can learn new skills which allow the organisation to change and respond to competition and new practices is now a key factor. In effect, the business culture is now a paramount asset to the company which will soon be measured on the Balance Sheet.
Although intangible the culture of a business organisation is highly valued it is difficult to measure. People’s attitudes and methods of communication have changed radically in the last 50 years and the mix of generations within a business have different cultures and communication mores making this a complex subject.
The cross-generational issues cause stresses and miscommunication within cultures can cause lack of productivity, demotivation, staff churn, ineffective recruitment, increased costs, loss of profit and competitivity.
Business models and external forces are constantly changing and those with rigid structures, cultures or business models soon lose their ability to compete especially in the area of attracting the right talent.
To keep up with changes in the business environment a fluid culture and business model is needed.
The historical hierarchical structures are being replaced by flatter structures with more autonomy.
But how do you organise this and how do you assess performance?
Traditional companies are designed to produce the same results every time, just like a machine. They are not designed to be adaptable, flexible or subjective.
The whole concept of leadership and how teams work needs to be reassessed and new models produced. Micro-management and managing people only by financial reward no longer works.
People want transparency in management and to understand and believe in what the organisation is doing.
The rewards of fluidCulture are huge and tangible.
With the right culture companies can be flexible, competitive, profitable and lower their per capita to turnover and profit ratios.
The creativity potential is released and the team are happy.
But to do this a certain amount of traditional control has to be forsaken.
There are no clear boundaries between managers and workers, everyone is in the team.
Learning has to be prized and ability rather than seniority rewarded.
Cultures need to be open and honest and mistakes need to be accepted as a way to learn not a measurement of failure.
Many companies are adopting these ideas particularly new start-ups but the challenge to traditional businesses is very real - adapt or wither.
10 Drawbacks to traditional organisational culture
- Are slow to react to external/internal changes, their systems are designed for stability and control, not change
- Are slow in communicating, which kills creativity and productiveness
- Maintain control centrally, which reduces the effectiveness of front-line staff and putting in an unnecessary layer of ineffective middle management in control
- Are slow to solve problems, and the problems will keep recurring, wasting time and resources
- Are often in conflict, strategic direction and priorities are not clear or agreed
- Have complex structures and systems which create problems by dividing and boxing people in
- Are not inclusive in their decision-making and thinking processes thereby limiting potential to change and adapt quickly
- Do not involve people in creating the organisation’s purpose causing staff to be alienated
- Have a greater focus on failure rather than on success and therefore there is a fear of failure
The danger signals
- A 9- 5 culture
- Too many people not doing much
- “Thats not my job” mentality
- Managers making all the decisions and asking what people are doing!
- Dress codes
- A lack of diversity in culture, age and ethnicity
- Nobody questions the purpose of the company even if they think it is wrong
How do we do it? Culture Exploit