Organizational Cultures which inspire Balance — Part 1
I attended a book review discussion about ‘Alpha girls’ authored by Julian Guthrie, recently, in Mountain view, California. One of the panel members, when faced with the question of, “How do you include women in the workforce in those fields where their percentage is low?”, replied, “Just recruit one woman “. When he later explained his ideology, it was surprising to note how our unconscious bias leads us towards supporting same sex, same ethnicity, same race etc., at workplace, which can indirectly affect the culture of the organization we work for.
“The culture of any organization reflects the social, personal and professional ethics of the organization.”
The organizational culture defines its success in the market place, as culture is responsible to take the organizations towards its main objectives. It gives an identity to the organization and equips it with the necessary tools to face the competition. It drives the results by increasing the performance and productivity through innovation. An organizational culture which drive results but makes compromises on ethics is not a healthy working environment. This is an example of high risk and high adventurous culture. But at the same time, a culture which promotes ethics and not performance or innovation is a low risk culture. In other words, it does not use all its opportunities and resources. A good organizational culture is a balanced mix of these traits.
The best example, for a low risk culture, is Kodak, where one of its field engineers invented digital technology in image capturing and processing in 1975, long before the time when it came to be identified as an invention. Nevertheless, the senior executives of the company did not want to promote a new technology, as Kodak was the world’s leading supplier of analog film rolls and cameras back then. Put together, they were afraid to adopt an innovation which might heavily disrupt their profit lines. But the image world went digital in the millennium and Kodak filed bankruptcy in 2012, as they could not keep up with the competition they were facing in digital imaging, because they had focused on analog technology for too long. The low risk culture of Kodak’s senior executives, in 1975, led to its complete disintegration in 2012, as their culture did not endorse disruptive innovation.
The best example for high risk culture, on the other hand, is Lehmann brothers. The financial organization, compromised on its ethics and principles and started financing to subversive markets, landing itself in bankruptcy in 2008. This high risk culture can do more harm than just drowning one organization, especially, if the third party risk norms and ethics are not taken into account, as it happened in 2008, which led to a global financial recession, leading to many Heads of the Governments coming to the rescue of their country’s leading financial organizations, which went into trouble.
Culture X, an entrepreneurial firm located in Massachussetts, USA, along with MIT Sloan Management Review, conducted a large scale research project to measure corporate culture. This project used a data set of 1.2 million employee reviews from Glassdoor. The project named Culture 500 uses cutting edge AI technology and human expertise and rated the world’s top organization based on nine important qualities.
Using the same, the project has created a template to benchmark organizations against their direct competitors, which in turn, helped in identifying the areas of strength and required improvements. This has proven to be one of the hottest projects completed in culture related issues. (This is similar to the Quinn Rohrbaugh’s competing value framework for organization’s effectiveness which focusses on four main aspects of flexibility, control, internal and external relationships, but lot simpler and easy to measure)
If culture is so important to any organization, it is vital to understand what culture of an organization really is?
Culture is not a physical entity and is not defined in precise terms in many organizations. Culture is made visible by how employees, employers, customers, vendors and stakeholders interact with other. It is defined by the strategies, processes, methodologies and tools used in the organization and how they are being used to benefit the business, investors, stakeholders and the community as a whole.
“Culture is the reflection of the practices, people and products of the organizations and how they interact to give the best back to the communities around the world.”
Industry 4.0 has made professionals and academics think differently and adopt a new culture of technology, innovation and ethics. Organizational culture which is a mixture of people, processes and business community, is headed in the same direction to adopt this futuristic culture which inspires balance and improves productivity, efficiency and success. In order to so, it is essential to identify the ways and means through which this culture can be adopted without causing too much disturbance to the workplace.
Let’s first break up what organizational cultural is made up of:
1 Organizational power structure: The organizational power structure, also referred as organizational structure in most companies, is an indication of power flow. In small and medium business, this structure is simple, where a group of employees will report to a single boss/ manager and the manager or the boss, ultimately reports to the head or the CEO or the owner of the organization. In tiny companies, this boss is also the owner of the business. But in large multinational organizations, the structure is a bit complicated and consists of many layers. Most traditional organizations prefer a hierarchical power structure where the authority flows from top to bottom.
But in recent times, many organizations have adopted to a flat structure, where the authority of a single boss is eliminated and the concept of team authority is being promoted, where the majority vote is preferred in many decision making processes. This change to multiple authority is leading to a culture of technology, innovation and ethics. Most organizational structure is the same as the power structure of the organization, except in a few, where the organizational power structure and the organizational structure are different. In this type of organization, it is important to identify where the power lies and thus understand the organizational dynamics and approach the right people to get the job done.
The best way to analyze the organizational culture is to understand the organizational chart which includes all the employee positions such as executive, managerial, supervisory, temporary salaried, contractors, and other workers. Then analyze how the business is organized, is it department based or product based. If it is department based, determine how the authority and responsibility move inside the departments and also analyze how it differs in various departments. Then determine how remote and travelling employees fit into the organizational structure- who they report to, who they submit their expenses to, who they ultimately work for, since a remote employee, might report to an operational manager, might submit expenses to a financial manager and might work for the customer. Once it’s done, meet with the CEOs and other board members to determine what organizational culture they prefer and follow and finally request a feedback from the employees on how satisfied they are with the current organizational structure and what improvements they might want. The survey is not meant to brainstorm ideas or speculate what they want, but should ask questions which will determine their preference of culture.
Based on the same evaluate the changes to be made and incorporate the same in order to establish a culture which drives balance between innovation, technology and ethical ideals. This idea is similar to the Quinn Model of leadership to determine the internal culture of an organization and how the organizational structure and leadership can have impact on the cultural beliefs and values of an organization.
2 Control Systems: The organizational control systems helps the executive managers to identify and address the issues and concerns and track the performance of an organization. It is a management function to keep an eye on the products, processes, people, market and thus helps in the overall functionality of the business. In simple words, it educates the higher ups about what is working and what is not and who is responsible for the same.
There are three types of organizational control: Market control, Behavior control, Clan Control as described in the above image. It is essential to analyze which type of control system works best for each organization and it can be adopted to emphasize the workplace culture. Sometimes a combination of all the three can be used too and hence it can reflect a corporate culture which inspires balance and supports innovation and ethical values and beliefs. Though a ‘team based clan control’ culture is more preferred by many management experts to improve innovation as there are more uncertainties in innovative research and processes, which can be reduced using social behavior of cohesion and consideration. I advocate a good combination of three because in an innovative environment, it is easy to measure output performance by simply aligning the individual’s goals to organizational goals, as it is near impossible to exercise behavior control in an innovative atmosphere where the behavior of the scientists or the dress codes or values or beliefs does not influence their results. Hence an innovative culture can be obtained using market and clan control, while an ethical culture can be obtained using behavior control.
3Beliefs and Values: The organizational beliefs and values are similar to the mission statement, which clearly defines the goals of the organizations, the path taken to reach the goals and the roles played by the different people in reaching the goals, through a set of ideals, guidelines and foundation principles. It gives a general idea of what the organization stands for and how the market and the society stand to benefit out of it by defining the motives behind the actions and communicate the path taken to reach an objective. It highlights the vision of the organization and the strategies needed to follow the path of vision by determining the core principles of governing and decision making on a daily basis. It defines the individual and the organization as a whole in their work to serve their customer, the processes and procedures used by them, the way they interact and identify themselves in the market and specifies
‘what is acceptable in the workplace and what is not’.
It toots the resourcefulness, the efficiency and the innovative procedures in their operations to the outside world. It communicates the purports of the ethical integrity followed by the employees and the organization through evaluating the respect of the employees to one another and to their vendors, customers and the rest of the community. It defines the ways through which the responsibilities are carried out. It identifies the difference between the pro- behavior and a con- behavior and helps to drive the workforce towards the pro- behavior which enables the organization to take the success path.
4Priorities and Language: Priorities determine the order of actions taken by the organization in determining the objective. It identifies the tasks to be taken in order to achieve the goal, one by one.
“Priorities set the ascend path towards success”.
The three types of priorities are critical, important and desirable.
The best way to set the priorities is to narrow the focus of the goal, by analyzing all the tasks and ordering them with most profitable tasks on the top and the least profitable task at the bottom and follow the top down approach. The tasks must focus on profit and success, but should not compromise the ethics and integrity. They must encourage innovation but must not leave out collaboration. The tasks must advocate risk taking, but must not compromise loyalty. The language used conveys the priorities of the organization in terms of beliefs and values and hence must be innovative but affable. It must cultivate trust while focusing on profits. It should enable the employees to identify themselves as a group, but should not prevent them to stand out or speak up.
The language must be caring, but must encourage efficiency and discourage slack behavior. The language purports the values of the organization in simple but effective ways. I often hear people say, “What’s in the name?” or “What’s in the word?” Those are the people who do not identify the eminence of language in an organizational culture, because the word is the identity of the organization similar to the name being the identity of the person. The language of the organization must be calming, caring, exploratory and must encourage open discussions. If a manager says,” I have an open door policy”, then it emphasizes team work, collaboration, access to resources, lack of ego and enables the employees to work efficiently, open up to questions and inspires them to participate in the progress of the organization.
