What is organizational culture?
In today's competitive business world, any company that wants to thrive must clearly define its objectives and have a clear roadmap for achieving them. At the core of achieving these goals is the existence of a consistent organizational culture.
The article “What really works” of Harvard Business School, written based on a survey of 160 companies over 10 years, highlights the importance of organizational culture when taking into account the longevity of companies. The study points out that one of the four essential pillars for a successful company is to have a high-performance organizational culture (along with the other three: Strategy, Execution, and Organizational Structure).
When comparing ordinary companies with high-performing companies, it's clear how culture has a direct impact on results. This is due to the fact that we can summarize the elements that enable superior performance in just two: 'what is done' and 'how is it done'. While product quality and price are linked to the first element, however complex the product may be, it can still be copied. Already the 'how is it done' it's much harder to copy.
In the view of Edgar Schein, writer of the book “Organizational Culture and Leadership”, we can divide culture into 3 main aspects: artifacts, values, and beliefs.
1. Artifacts
In 1995, when comparing the prices of desks and doors, Jeff Bezos decided to buy doors and set up the first Amazon tables with them. To this day, they have become a symbol of cost-cutting and simplicity for the company, a clear example of cultural artifact. The artifacts are visible and easy to identify, such as dress codes, company facilities, its ceremonies, language, etc.
2. Values
They are built with time and leadership, making it clear what are good examples and bad examples to follow. According to Schein, they are built on actions that have proven effective over and over again and have been enshrined with collective acceptance.
3. Beliefs
As Beliefs they are the perceptions, feelings shared by the members of the organization that gave positive results, were consolidated and accepted, incorporated and consolidated at the level of the unconscious and becoming a basic assumption. To take a practical view, at Amazon there is the belief that “the best way to fail to invent something is to do it with someone part-time”. After that, every most critical project is led by some talent empowered to be a full-time owner, this good practice is called a single-threaded leader.
In the article The Leader Guide to Corporate Value the authors present a framework for interpreting and classifying a company's culture. They suggest segmenting it into two main axes:
- Interaction between employees: cultures inclined to autonomy and competitiveness those that value the integration of people and teamwork the most.
- Response to the change: differentiates cultures that prioritize consistency, rules, hierarchy, and predictability from others that prioritize innovation, diversity, and flexibility.
This framework can be used to assess the characteristics that a company's culture reinforces the most, or to predict/understand cultural problems. For example, a culture that values Reception and Order benefits from loyalty, high retention, and team feeling, but a detachment from focusing on results can lead to decisions based on consensus and a lack of honest criticism to avoid conflicts. Another example is cultures focused on Results and apprenticeships they can enjoy great agility and the development/attraction of young talent, but they can suffer from high turnover. Thus, it is up to leaders to carefully decide how to make the most of the company's culture, and where to transform it if necessary.
O MIT conducted a survey evaluating the culture of 500 companies showing what differentiates leading companies from others through interviews with employees. The report on Amazon, for example, showed that the company received well above average evaluations in the Innovation criteria (apprenticeships), Customer Focus (Results) and Execution (Results). Its expressive growth over the last decade highlights the power of this culture. To maintain high execution, it has aggressive goals of firing employees with below-average performance, in addition to offering employees money to resign when they are not passionate about the company. It has a culture that is extremely focused on apprenticeships and Outturn Giving up high levels security and Reception for your collaborators.
What are the challenges of creating a digital culture?
The main characteristics of digital cultures are well known: fault tolerance, experimentation, psychological safety, high collaboration, and horizontal hierarchy. They promote agility in the operation and also enable constant innovation in products, services, and internal processes. There are several native digital companies such as Amazon, Netflix, Google, and Apple that have successfully adopted such practices in recent years, in addition to several other “traditional” companies that have managed to mimic these practices in their cultures. However, despite the vast literature on the subject and examples that are not lacking, many companies fail to adopt a digital culture.
Gary Pisano, professor at Harvard Business School, concluded that digital characteristics are often misunderstood, for example, much is said about the culture of experimentation, but not everyone has the discipline to execute them. Pisano's ideas were brought together in the article The Hard Truth about Innovative Cultures, explaining what are the essential complements, generally overlooked, for the characteristics of a digital culture:
Additional Features How to do it?Fault ToleranceIntolerance to Incompetence - Fault tolerance requires extremely competent people. Hire the best!
- Align expectations with expected performance and make clear the difference between productive and unproductive failures
- Communicate well with the team, otherwise dismissals may be interpreted as a punishment for failureExperimentationHigh discipline- Carefully select experiments based on your potential
- Have clear criteria for Abandon or continue With an idea
- Learn from mistakes and follow more promising paths
- Data is fundamentalCollaboration/Individual Responsibility - Get help From colleagues it must be natural, even if this is not in the job description
- Individuals make the decisions and they need to be Accountable For them
- Leaders must have the behavior “You take the risk and I take the blame” Horizontal Hierarchy Strong leadership - Low hierarchy is in culture much more than in the organization chart
- Autonomy for decision-making based on Competence and not in the title, by those who are closest to the problem
- Strong and visionary leadership that communicates well priorities and directionsPsychological Safety Directly Challenging Openness is fundamental For innovation, this is how ideas evolve and improve
- Brutally honest organizations generally They are not the most comfortable places To work
- Leaders must lead by example and ask for criticism of your ideas and suggestions
Although they seem conflicting and counterintuitive, these elements are quite common among the most innovative companies in the world. Although they are not as publicized as the “cool” characteristics of culture, they are the difference between sustainable innovation and frustrated initiatives.
How to implement digital culture?
The challenge of transforming the culture present in a company takes time and requires great efforts (and sponsorship). Throughout our experience, we have helped our partners to establish processes and rituals that allow the persons Feel Encouraged Working towards a vision and purpose sets.
One of the fundamental elements in changing culture is the definition of vision of the company. This approach will let people know what to pursue in the long term and, in addition, it allows leadership to create a sense of urgency collective design of the possible scenarios if the company does not change. In addition, merging internal talents with people who come from outside the company and who bring the desired cultural aspects helps accelerate the process, raising the necessary questions and with an unbiased vision.
O Example coming from leadership and constant communication they guarantee the unfolding of culture to the middle management layers, coordinators and, finally, the employees. This stage is so important that changes in the executive cadre are common to promote alignment with the desired cultural vision. Cultures are selective, promoting those aligned with them and pushing others away. According to The Leaders Guide to Corporate Culture, this characteristic causes high durability and difficulty in the transformation of crops.
At times of changing habits, routines, and patterns, it is common to use tangible artifacts that facilitate a glimpse of the new culture, such as symbols, redesigns of the layout of the work environment, slogans, and guidelines described in manuals. Novos rituals and management standards can be a starting point for a more comprehensive change in the company's organizational model, allowing people to have constant contact with the new way of working and questions.
Continuous feedback for each collaborator guarantees a constant realignment of expectations, giving visibility to misalignments and ensuring the promotion of desirable cultural aspects. As performance reviews are just another way to process and reinforce these aspects, although constant and timely feedback should be encouraged. In addition, inducements financial or qualitative offerings offered to those who act as expected are an efficient way to engage employees (cultural artifacts may even be created for these awards).
Conclusion
There are several characteristics that can support a successful organizational culture. There is no single and exclusive set of attributes for this, but rather a balance between the advantages and disadvantages of the values desired by the company, which will naturally guide practices.
Although there is no correct answer for defining the characteristics of a digital organizational culture, we can find synergies in the process of implementing such a culture, that is, even if we do not have a single desired standard, there are several aspects in common between the cultures of higher performance and innovation. It is important for the company to understand these aspects well, which fit its own reality and decide which are the most urgent changes.
One way to accelerate the implementation process is to provide constant and sincere feedback, in order to direct each employee to a single objective: to achieve a culture of excellence by delivering sustainable results.
