“Culture… we don't have one!”

April 02, 2007

This senior executive quote underlines the challenges we face in understanding and changing the effects of work place culture. Notwithstanding an ability to resist description Bain’s recent biannual “Management Tools and Trends Study” concluded that nine out of ten executives think that corporate culture is as important as business strategy.

The way in which work is conducted, behaviors are rewarded and the manner in which co-workers interact all contribute and in turn affect customer relationships and ultimately shareholder value.

HR professionals look at culture through a variety of lenses to assess how the various facets impact performance. While the magic bullet for changing a ‘performance challenged’ culture may be elusive it need not always be complex.

Culture is multifaceted but before undertaking a genome project, it is worth checking that more fundamental barriers are not standing in the way of the environment that you seek. For example, an organization in pursuit of an entrepreneurial culture that has a heavy approval process may be undermining its message by denying the management team speed and, the ability to take risk. Checks and balances appropriate to capital intensity of course need to be in place, but aligned with a commensurate level of freedom to act with relevantly weighted rewards and penalties.

A resource company, whose share price tracks the price of the resource should not be using stock based rewards to motivate higher management performance. How an organization values work and what employees believe that they need to do to advance in the organization will drive behaviors and shape culture.

Most companies strive for a culture that is performance driven but often obscure this goal because of the way that work is organized and valued. Where reward and perquisites are overly stratified by grade or class of work this can lead to a ‘status’ rather than performance oriented culture. This disconnect will limit value creation.

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