Why is it Important?
“Organisational culture is the key to organisational excellence …. and the function of leadership is the creation and management of culture …” Edgar Schein | Organisational Culture and Leadership
These words have been written over a score of years ago. In the mid 1980’s, organisational theorists stated bluntly that the ability for corporate leaders and human resource professionals to interpret and understand their organisational culture affected all strategic development.
Some of the issues facing the 21st century global business terrain are:
- The need to form cohesive membership based on cross-generational team work and collaborative knowledge-sharing,
- The determination of effective entry criteria to ensure optimum ‘fit’,
- The designing of internal career and succession planning that work and can change as needs and market opportunities shift,
- The focus on talent nurturing and retention,
- And the heightened awareness to increase productivity and learning at all levels.
In short, as we look at these issues, it is argued that the tools of cultural analysis, formation and change have never been more important.
In July 2007 Scott Cawood, a noted business strategist, described organisational culture as potentially the ‘the truest competitive differentiator for businesses today” as well as being “the one most overlooked.” As Cawood stated bluntly:
“Culture can be the deciding point for an employee who chooses to just show up at work – or to actually contribute to your organisation. It is today’s greatest business imperative. It requires leaders to leverage the talents of their people to grow a business by connecting their people to the heart of the business – all through the culture they have intentionally groomed. Connected people are motivated to be effective. They’re willing to do to see the organisation succeed because they are part of something special”.
The real question becomes: If theorists were stating this in the 80’s, why haven’t the corporate world taken notice yet?
The answer is very simple. Leadership didn’t recognise how much culture affected their bottom line – that it was the substratum of their bottom line and they didn’t know what to do.
With respect to the latter point, companies weren’t on the same page with respect to realising that the difference between their espoused values and behaviours and what they actually enacted on a daily basis mattered profoundly to their employees. They did not understand that organisational behaviour was intrinsically linked to human emotions or that emotional intelligence was responsible for, at bare minimum, 85% of individual and social behaviour i.e. what made their companies functioning or non-functioning organisations. Beginning with a sound understanding as to what culture really means, which naturally incorporates the essential connection to behaviour and emotional intelligence.
What is Culture?
Culture is the unique whole, the heart and soul that determines how a group of people will behave. At the same time, recent studies are recognising more and more that culture cannot be ‘imposed’ from above. It can, however, be attentively guided and shaped. Companies are created by people and while concepts like ‘mission, vision, values, rites, rituals and goals’ are indisputably essential components, they are no more than empty phrases if attention is not placed on employee perception, interpretation and enactment of ideals in conjunction with consistent leadership emphasis on and role modeling of what is truly valued. More than a quarter of a century ago, Edgar Schein subtly argued that culture as “shared meaning, shared understanding and shared sense making.” That it could only be seen as “an active, living phenomenon through which people create and recreate their worlds.” As he put it succinctly, “an organisation has no presence beyond that of the people who bring it to life.”
But for years this has been practically ignored by corporate leaders because they did not understand the concrete importance of culture with respect to organisational wholeness, productivity and competitive success, and because they did not have the tools for understanding and changing an inherently ‘dynamic, evolving process.’
Cultural Concepts about Culture as a Dynamic Force
Professors Ken Thompson (DePaul University) and Fred Luthans (University of Nebraska) highlight the following characteristics of culture:
- Culture = Behaviour
Culture is a word used to describe the behaviours that represent the general operating norms in your environment. Aspects of your culture likely support your progress and success and other aspects impede your progress.
- Culture is Learned Through Behavioural Interaction
Employees learn culture by interacting with other employees. Most behaviours and rewards in companies involve other employees. An applicant experiences a sense of your culture, and his or her fit within your culture, during the interview process. An initial opinion of your culture can be formed as early as the first phone call from the HR department.
- Behaviour is Derived from Emotion
Emotions are indications of values. People do not get excited or upset about things that are unimportant to them. This is what they truly value; what they hold dear. This is the indicator of the integrity of the company as a productive community. Yet at the same time it is pivotal to remember that emotional interpretation is not fixed, although values are formed very early on in life. Emotions are always a choice.We respond to others or our environment because we choose to, as a result of our values in conjunction with previous conditioning. Think for a moment. The last time you said “What a depressing environment!” What was going on in that room? In your mind? In Your life? Could you have looked at that same environment and not been affected at all? Not even noticed? There is no contradiction here. Emotional knowledge of your company tells you much about the composition. If someone highly values their ‘independence’, they will be much harder to integrate into a ‘we’ culture. At the same time, emotions are shaped by life experience and associations, therefore the more you know about your employee’s emotional make-up, the greater your knowledge of their values, their behavioural expressions, and insight into changing undesirable patterns of behaviour while honouring their core, most deeply held values.
- Behaviours can change.
What must be in ‘resonance’ are the core values of your company’s mission, vision and goals.
- Emotions are the Generator of Human Functioning
Only within the last decade have we discovered that not only is the hippocampus, thalamus, hypothalamus and the amygdale (the emotional brain), the key parts of the primitive brain that gave rise to the cortex and the neo-cortex (the logical brain), but it is these precise limbic structures that give rise to most of the brain’s thinking. As Daniel Goleman puts it, “the fact that a thinking brain grew from the emotional reveals much about the relationship of thought to feeling, there was an emotional brain long before there was a rational one.”What does this mean? With over 150 000 bits of data per minute being processed by our limbic brain vs. the 36000 bits processed by our cognitive centers, we ignore vast quantities of information at our peril. It is information that largely determines the rational decisions we make, our mores, ethics, the values we adhere to and the ones we ignore; thus comprising our fundamental behaviours as individuals and in social collectives. And unlike cognitive conceptualisation (IQ), the emotional brain can always be stimulated to learn. In short, the culture of an organisation can only be shaped by understanding how the human brain works and how human beings truly function.
How Important is Emotional Intelligence to a Healthy Organisational Culture?
Where, at one point, corporate analysts felt that EI was beneficial, it is now being seen by visionary leaders (not just theorists) as the glue that makes an organisation whole. The following reasons are representative of this discourse:
- It enables an organisation to hire capable people – no matter how talented someone is they are not ‘capable’ if they do not gravitate strongly to what they do, and contribute to the big picture. Cultural ‘resonance’ is now seen as being widely seen as even more important than ‘competence’.
- It puts the focus where it should be on job satisfaction – recent studies have linked only 9% of organisational growth to “productivity” and from 58-70% to job satisfaction – where needs are fulfilled, where networking is encouraged as well as other learning opportunities, where individual growth and optimal fit are natural expectations.
- It ensures that your managers can manage. They can be empathetic and coach individuals during periods of low performance; they can delineate paths of employee growth, they can leverage talent; they can optimise diversity. EI created positive, productive companies by naturally instilling managerial recognition that the #1 reason people leave a position is their relationship with their immediate manager. Most importantly, good managers create trust, the highest form of cultural capital in any company.
‘The Fish Rots from the Head’
In recent studies, 40% of employees at the nation’s largest companies said ‘water cooler’ conversations increase productivity by providing opportunities for employee bonding. But only 21% of executives agreed.
Ignorance persists, companies suffer high turnover and bewail the problems of ‘talent retention and knowledge transfer’ knowing that the 70 million Boomer retiree gap will intensify these problems beyond their very conception, let alone remediation. But the real bottom line is: it doesn’t have to be that way.
As the patriarch holds the family together, so does an organisation’s leader – that has been the proverbial truth since the beginning of modern commerce. But the ‘real-life’ story shows many organisations which have leadership that is formally respected but informally despised or simply the butt of grapevine jokes.
However with the science of EI – and now it truly is a science – real leadership realises they are the models and creators of the ethos that will empower or disable their organisation. They balance assertiveness and independence with a non-judgemental flexibility that responds to changing contexts. They are self-reliant and take responsibility for their actions as authors for their own lives, and authors of a collaborative vision. And they never forget that they have a responsibility for others beginning with their employees – the embodiment and emissaries of the company. In doing so they know their clients will receive the best service and every stakeholder will reap rewards.
The Democratization of Success
Twenty-five years ago, 7 people died after ingesting Tylenol caplets which had been laced with cyanide. Now the poisoning had clearly not been done on corporate premises and was limited to the Chicago area, but Johnson and Johnson withdrew the product nationally at a cost of over $100 million. They then invested more than half that amount in a concerted campaign to change pharmaceutical product packaging. In response to a post-facto flurry of commendations, former CEO Jim Burke refused to ‘take credit’. He cited the importance of the company’s credo – responsibility to consumers first and foremost – as a meaningful barometer of what the company was as an organisation. In doing so he created a story that, to this day, every new trainee hears during orientation. Importantly, it remains a gauge of organisational health. As one executive put it, “We’ve given them a reason to be proud to join us, now it’s all of our jobs to maintain that pride.”
Are you going to be a company that looks at the water cooler, sees disinterested faces, and then focuses on work? Are you going to be a company with a beautiful Annual Report on rich high gloss paper filled with glowing statistics and a turnover rate in excess of 40%? The difference is now you don’t need to be a stand-alone, a maverick. You can be a visionary by using tools to make each and every member of your organisation a participating partner in that vision. You can bring in people who fit, who will give their utmost because they feel part of an entity that gives meaning to their lives. Managers will understand that their job is to promote productivity by understanding that overseeing technological competence is the least of their skills, and they will enthusiastically take on these tasks. Your company will succeed because you have designed a culture that promotes productivity and cohesiveness. The ‘rah-rah’ speech ritualistically given at a corporate banquet and soon forgotten has become the functional ethos of the successful 21st workplace.
Are you ready to start the conversation?