What is organizational culture?

Organizational culture is a powerful and enduring force that affects the direction and performance of an organization. Strategic plans define what you want to accomplish, how resources will be allocated, and the metrics to measure success. Culture is how to operate. 

What do I need to do to be successful here? This question is a powerful way to understand the culture of an organization. 

Culture is defined by the social expectations in the organization. Culture is a social control system. The control comes from the knowledge that someone who matters to us is paying attention to what we are doing and will tell us when we are doing poorly. To know what is important in an organization’s culture, we rely on information from our peers – their approval or disapproval – and from signals sent by leadership. 

Why is organizational culture important for innovation?

Expectations that promote innovation and change are universally applicable across organizations, regardless of their size, industry, and age. Studies of innovation reveal that expectations that support risk-taking are important as well. 

What are the elements of a strong organizational culture?

The criterion for a strong culture is high levels of agreement about what is important and high degrees of intensity. You create a strong culture through clarity, consistency, and comprehensiveness that encourages people to care. 

Strong cultures enhance performance in two ways. The first is by energizing employees because the culture provides identity and meaning. The second way is by shaping and coordinating behavior. The clarity about what is expected guides behavior and decision making, without impinging on employee autonomy. 

What are examples of strong organizational culture?

Examples of companies with strong organizational cultures are Disney, Google, and the US Navy Seals. 

Another example of a company with a strong organizational culture is Zappos: Prior to its acquisition by Amazon, Zappos’ strong culture focused on above and beyond customer service, hard work, and quirkiness. They hired based on cultural fit and offered a $2000 bonus to quit. If you didn’t fit in, you had the incentive to leave. They provided four week training on culture, core values, and customer service training to reinforce the needed culture. 

How do you change an organization’s culture?

You can change organizational culture by doing the following:

  • Assess the culture you have
  • Define the culture you need to execute the organization’s ambition and long term strategy
  • Align senior leadership on the needed culture
  • Diagnose what reinforces the current culture and identify how to realign execution to reinforce the new expectations. This includes the priorities, processes, structure, systems, and skills. If you don’t realign how the organization executes, the result will be no change. 

It is essential to involve senior leadership when shifting an organization’s culture. Leaders are signal generators: what they say and do gets noticed by others. When there is inconsistency between what they say and what they do, it creates cynicism and dilutes commitment. We encourage leaders to pay attention to the following signals:

  • Where you spend time is important. For example, if an organization says client focus is important, yet they spend 90% of their time focused on internal issues, this inconsistency between what they say and do will dilute the importance of customer focus. 
  • Who you recognize for outstanding performance sends signals about what is important. 
  • What information you share with others.
  • Who you promote. 

It is also essential to create systems of participation, to find ways to involve people at multiple levels in the organization to embrace the new expectations. Give them forums for dialogue and discovery. Encourage them to get involved.

Culture change is not a quick initiative. It requires commitment, experimenting with creative approaches to identify what will gain traction, and removing barriers that exist in the company’s processes, structure, and compensation systems. Select a tool to measure progress. Celebrate progress.