Creation of Organisational Culture
Organisational culture is a set of values, attitudes and beliefs that determines how people interact with each other internally and adapt to the external environment.
A strong culture enables people to improve organisational performance by solving problems quickly. Thus, it is of paramount importance for an organisation to develop a culture that promotes shared learning and problem solving.
The development of organisational culture is not a one-day job; it is developed over the years. It starts developing right from the inception of an organisation and keeps evolving throughout its lifetime. The initial culture of an organisation is developed by the founder of the organisation.
However, different organisations have different cultures based on their philosophy, vision and mission. For example, Flipkart, an Indian e-retailer, has a culture that focuses on fast delivery of products, whereas retail giants like Walmart and Big Bazaar have developed a culture of providing nominal prices, convenience and quality to customers.
Organisational culture is created by establishing beliefs, behaviours and values that are acceptable by individuals in an organisation. An organisation always wishes to hire individuals that would best fit into its established cultural norms.
Steps in Creating Organizational Culture
The top management of an organisation plays a significant role in creating and maintaining a culture. The culture of an organisation is created by following a five-step process.
- Performing a Culture Audit
- Assessing the Management Team
- Focusing on Results and Building Accountability
- Managing the Drivers of Culture|
- Communicating and Rewarding
- Creation of Organisational Culture at General Electric (GE)
Performing a Culture Audit
Culture audit is undertaken to determine the strengths and weaknesses of existing organisational culture. It also involves reviewing the vision and mission statements of the organisation. Further, one-toone interactions are carried out with employees to understand their viewpoints on the existing culture and their expectations.
This ultimately helps the organisation to create a new culture by considering the strengths and weaknesses of the existing culture.
Let us take an example of St. George Bank, Sydney. In 2002, Gail Kelly, the then CEO of the bank, found that the bank had a customer-centric culture, where employees were friendly and service-oriented. However, a culture audit revealed that managers were slow to make decisions and unable to collaborate across different departments. Employees were hesitant to offer additional products to customers.
Thus, Kelly set new cultural norms in which every employee of the bank was made responsible and accountable for the tasks performed by them. The bank also added a culture of providing value to customers by introducing new products.
Assessing the Management Team
In this step, the members of the top management of the organization are assessed. This assessment helps in revealing which managers are flexible to adopt the new culture. In case managers resist change, they are given proper counseling. Even after that, if they resist change, they are moved out of the organization.
Focusing on Results and Building Accountability
A positive culture is necessary for an organization to achieve its long-term strategic goals. For this, the roles of each manager are set so that they can work towards achieving the strategic goals of the organization.
Moreover, the performance of managers is reviewed against the prescribed standards on a weekly or monthly basis. In the case of St. George Bank (as explained in point 1 above), Kelly developed a culture where managers were required to be accountable for all tasks performed by them.
Managing the Drivers of Culture
The culture of an organization develops as a result of various drivers. These drivers include the attitude, perception, and thought process of employees; the nature of the business; the customer base; management style; etc.
In order to create or implement new organizational culture, all drivers of cultural change must be managed efficiently. In the case of St. George Bank, drivers such as the framework of management, discipline, and strategy need to be strengthened for creating a culture.
Communicating and Rewarding
A strong culture can be developed if there is effective communication among all stakeholders of the organization. For example, frequent interaction between the management and employees would help in identifying ongoing problems at the workplace.
Similarly, communicating with customers regularly and getting their feedback would help the organization in making improvements in products and services. Taking the example of St. George’s Bank, Kelly made a habit of calling customers every week and hearing their concerns.
In order to promote the change process, the employees should be motivated to make change efforts. For this, they should be rewarded appropriately with incentives.
Creation of Organisational Culture at General Electric (GE)
In 2001, Jeff Immelt became the new CEO of GE. He identified the need for a major shift in GE’s focus from execution and efficiency to growing globally. Therefore, he decided to create a culture for promoting growth.
In order to achieve this, he renamed the organization’s strategic planning process as ‘Growth Playbook’. He identified the requirement for a new set of values called growth values. These values served as the foundation for leadership and performance culture.
Immelt created a team of experts in 2003 to modify and define the core values of the organization and align these values for promoting overall growth. The members of these teams included top and middle-level managers.
They were asked to list leadership strategies they would follow and also the ones they would avoid. They were also asked to make suggestions about how the organization could grow. The opinions and reviews of all managers were collected and analyzed.
The results were studied by Jeff, and he converted these into five basic growth values. These values included external focus, clear thinking, imagination and courage, inclusiveness, and expertise.
All functional units of GE started incorporating these values into their operations. These values were also included in the performance management system of the organization.
The five growth values can be understood as follows:
- External focus: The organization tries to connect with its external stakeholders. This shows that the organization thinks from a global perspective.
- Clear thinking: The organization has a clear vision of uncertainties or problem areas. Moreover, it develops strategies to overcome those uncertainties or problem areas.
- Imagination and courage: The organization promotes innovation and creativity. It accepts risk-taking as a part of the culture.
- Inclusiveness: The organization has maintained a culture where all employees are free to give their suggestions and ideas.
Their ideas are taken with respect and humility. Such a culture of inclusiveness treats the organization’s employees as a part of some big family. - Expertise: The organization promotes specialized knowledge and skills to facilitate overall development.
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