The main determinant of how effectively an organization performs in all other areas of organizational performance, organizational culture, is why it is so crucial. Because it is the most difficult to imitate, culture may also be the most significant competitive advantage.
High turnover rates, little to no innovation, a lack of staff buy-in, employee disengagement, customer discontent, poor decision-making, and a lack of openness and accountability are a few barriers to success for many businesses.
By building a positive workplace culture that integrates compassion into the business strategy, these challenges can be overcome. Here are nine reasons why outstanding leaders prioritize culture in their firms.
Defining Organisational Culture
Organizational culture is a set of shared presumptions, ideas, and values that direct how individuals behave within organizations. An organization’s expectations, experiences, philosophy, and values are what keep it together and are reflected in its internal workings, relationships with the outside world, and expectations for the future.
It is founded on accepted common attitudes, beliefs, traditions, and written and unwritten laws that have been formed over time. These shared values have a big impact on everyone in the company and control how they behave, dress, and do their work.
Why is Organisational Culture Important?
1. The most significant competitive advantage may be culture
What gives a business with a similar product or service a competitive advantage? What distinguishes them from the competitors and propels them to the top in their industry? Culture. A strong corporate culture offers businesses countless advantages.
Organizational culture is the key to success whether it’s attracting top talent, retaining employees, enhancing brand recognition, or fostering an environment where innovation is the standard.
The case for culture playing a significant role in job searchers’ expectations for possible workplaces is growing. This has not altered, even amid the pandemic when many individuals worked from home.
2. Culture Is Difficult To Copy
Leaders frequently are unaware of how long it can take to mimic organizational culture. Companies that try to emulate the cultures of successful firms won’t reap the rewards of having an authentic culture. The most crucial aspect of organizational culture, according to Torben Rick, is that it is the only source of long-term differentiation for any firm. Nobody can replicate a culture, but anybody can copy a strategy.
Organizational culture is difficult to duplicate, but many leadership techniques, strategies, and organizational procedures are. It is ingrained in a company’s DNA because every organization has its own culture. The culture won’t grow and change naturally if a leader isn’t genuinely invested in their team. An organization won’t achieve its vision if the culture isn’t upheld within the workplace through routine behavior.
It might not even endure long enough to acknowledge the grave error it has committed: an organizational culture that loves its personnel cannot be faked. The ability of a business to make its purpose, vision, and values a genuine part of its culture has a tremendous impact on every level of the organization.
3. Culture Goes Beyond a List of Buzzwords
Numerous businesses outline their cultural tenets at each team meeting, including chapters on it in their employee handbooks, and codify it on their websites.
You may have even had the opportunity to work for a corporation that adorned its office break area with posters touting its “mission, vision, and values.” Making a clever mission statement is easy, but getting people to work together as a team to accomplish that mission can be difficult. In conversations about culture and even in the vocabulary some businesses use to characterize their own unique cultures, you’ll frequently hear the same buzzwords spoken.
An example, the phrase “Servant Leadership” has gained prominence in recent years.
The term “culture fit” is also frequently used. Many recruiters now conduct initial interviews with prospects to determine their cultural fit before moving on to in-depth discussions about the positions they are looking to fill. Due to the financial penalties of making poor recruiting decisions, determining cultural fit during the hiring process is essential.
Even if they’ve done it a million times before, leaders should always ask themselves, “How well are we handling organizational culture?” while dealing with hiring and deciding what attributes they are looking for in a candidate. Some leaders could find it difficult to accept the answer to this question. It raises additional concerns about sincerity, planning, and execution.
4. Culture Impacts Strategy Execution Capability
Any organization needs visionary leadership if it hopes to survive. A corporation needs a solid plan and a smart, high-performing workforce in place to realize its vision through both long-term and short-term goals. But even the best plan will fall short if a team is not unified by a common goal. The value of employees is emphasized, and it is recognized that they are crucial to the successful implementation and execution of strategies.
When there is a lack of trust, transparency, and accountability, and if stress and anxiety are the norms, a workplace atmosphere won’t be healthy. Teams that function well are skilled at carrying out their strategies. Organizational culture is how you put together a high-performance team. Every company culture should provide its team with what it needs to perform at its best.
5. Culture Draws and Keeps Talent
Organizational culture can affect whether your business has the resources necessary to attract top talent in the fiercely competitive field of talent recruitment.
The public’s impressions of organizational culture and corporate branding, as determined by a company’s reputation, may be related, according to certain studies.
What does this imply for hiring initiatives?
Talented individuals will notice and desire to work for you if your company’s culture is recognized favorably outside of the organization. Therefore, leaders will use branding to express their organization’s culture effectively to attract the best candidates.
To obtain a competitive advantage in hiring, businesses must set themselves apart from rivals. They have an edge over their competitors if their corporate culture is known for putting their employees first.
Vaibhav Jain, the CEO, and founder of Hubilo claims that when applicants who are drawn to the company’s good culture are hired, the culture is reinforced and workers with the same values and vision are pulled to the company.
Talented individuals will want to join your team if you’ve incorporated organizational culture into the reputation and brand of your business. Before the first interview has ever been planned, they will already be familiar with the goals of your business.
6. Culture Increases Engagement of Employees
Over the past few decades, there has been a rise in the issue of low employee engagement. The actively disengaged employee is worse than the unengaged employee. Employees who are actively disengaged from their jobs can harm production, the financial security of the organization, and the morale of other workers.
Companies would benefit significantly from a culture that puts a strong emphasis on providing care, fostering trust, and empowering workers while also giving them the freedom they require to succeed. One of the most crucial things a compassionate leader can provide their staff is autonomy.
According to research from the University of Birmingham, employee autonomy is associated with higher job satisfaction and general well-being. One word of caution for leaders: you should never engage in a quid pro quo arrangement. The worth of employees shouldn’t depend on what they contribute to the business.
For instance, you shouldn’t attach any cultural benefits you give employees to how much money they bring in for the business. An employee shouldn’t believe that to be valued as a team member, they must put in 70-hour work weeks.
7. Culture Enhances Client Services (Internally and Externally)
Customer happiness and employee engagement are inextricably linked. Your clients won’t be happy if your employees aren’t too. Customers won’t trust you or share your vision if your staff doesn’t.
Employees will be better able to establish solid relationships with consumers if their workplace has a healthy culture that encourages open, honest, and courteous communication both internally and externally. Additionally, it will foster a culture in which top-notch customer service is standard and customer-centered innovation thrives.
Customer-focused innovation “thrives when a progressive attitude is supported by processes and mechanisms to collect staff ideas and bring them to completion,” according to Skip Prichard, President & CEO of OCLC.
8. Culture Encourages Innovation
Organizational culture has a variety of effects on innovation. Innovation will not occur at a high level in a society where failure-related fear is prevalent.
However, creativity occurs much more readily in societies when fear is absent and trust levels are high. Innovation suffers in any company without a strong organizational culture.
The ability and motivation of employees to actively participate in the creative process, which creates the foundation for ongoing innovation, is crucial. Employees at all levels of the business are shown that they are valued when senior management is receptive to various viewpoints and encourages them to participate in the creative process.
Even when they may be critical or question the status quo, ideas and suggestions must be shared to spur innovation. A culture of innovation encourages creativity and can help senior management make more informed decisions.
9. Culture Ensures Excellence
A company’s organizational culture may be excellent on paper, but if it isn’t put into practice regularly, it is ineffective.
Businesses frequently put a lot of time and effort into preserving their cultures, sometimes utilizing a lot of the same terminology that successful businesses do. They do not, however, get the same benefits as businesses that genuinely integrate culture into their organizational structure.
When a company’s culture “language” is not translated into actions, it affects both the quality of the services and goods it provides to its clients and the quality of the work its workers produce.
Organizational culture has been proven to have an impact on quality control and organizational performance, according to a study published in the Management and Economics Journal.
Employees will produce high-quality services that are beneficial to their clients and communities when their workplace has a culture that gives them the resources they need to succeed, encourages them to share their ideas, gives them the autonomy they need to reach their full potential, and makes them feel fully invested in the success of each project.