How important is culture to the success of an organization?

It is everything!

I am the managing partner of an accounting, technology and business consulting firm. I have learned from experience that organizational culture impacts everything in business. The most sophisticated strategy, the best people and outstanding execution won’t guarantee your organization is successful. But, if you start with the right culture and build from there, you might have something. So what exactly is culture in an organization? The definition of organizational culture is slippery; you run the risk of alienating certain components when presenting one succinct definition. Let’s take a look at two definitions from well respected management theorist and see what they have to say about Organizational Culture:

Organizational culture is…

“a pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems” - Edgar Schein

“the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization” - Charles W.L. Hill and Gareth R. Jones

An amalgam of the two sounds like a reasonable definition to me. Let’s take a closer look at one of the components of this definition in order to gain a better understanding:

Human Behaviors

I am a CEO, not a psychologist, so what do I know about culture and human behavior? Maybe nothing, but in my experience, who we are and what we do plays out daily throughout the culture of our organizations. If our behaviors truly reflect the Vision and Values of our organizations then we should be able to create an organizational culture that performs in a way that supports our strategic goals.

Simply put, managing for the culture you want should be a matter of defining the culture and then acting consistently in a way that positively impacts how the people around you think, feel and act (the organization’s culture). But is it really that simple? If it is, why do so many organizations fail to achieve a culture that successfully supports their mission?

The most effective way to bring about cultural change and improve organizational performance is to improve the collective behaviors of the organization’s leaders. If you’re like me, you’ve tried many techniques, programs and initiatives to improve culture throughout the organization, only to have them fail the first time a senior leader chooses not to follow them. Your staff says, “why should I do this when he (and he points at you) does not?” Experience tells me that I must take the path of working to improve leadership behaviors if I want to have an impact on organizational culture. Everything leaders do, say and don’t say is picked up and mirrored in the behaviors of their peers and staff. Because of its impact on the rest of the organization, leadership behaviors drive culture and ultimately organizational performance.

More on Vision, Values and Culture in my next entry.