Organizational Culture — Trends You Need to Know

by Michael Gugel, CPO @ GoCo

It’s hard to believe that the term “corporate culture” didn’t appear on the business landscape in a meaningful way until the early 1980’s. By contrast, another business term, “money”, developed almost 5,000 years ago! While corporate culture may seem like a newborn to the business world, important trends are emerging.

CEO’s are starting to get it

CEO’s are starting to get the business case for a strong positive culture. Organizational culture is no longer some fuzzy, intangible concept from another universe. The Katzenback Center at Booz and Company surveyed 2,219 executives to better understand current perceptions of culture.

Key findings include:

  • 86% of C-suite respondents believe their organization’s culture is critical to business success
  • 60% said culture is more important than the company’s strategy or operating model
  • 96% said some form of culture change is needed within their organization
  • 45% do not think their culture is being effectively managed.

The issue CEO’s face now is how to manage culture. The opportunity exists to stop promoting the business case and start educating CEO’s on the assessments, tools and processes available to help define, promote, evolve and monitor organizational culture.

Culture “fit” is becoming a major recruitment factor

Whether you’re doing the recruiting or you’re applying for a position, culture is a hot topic at either end. Employees are tired of working in environments of high stress. High stress comes when employees find themselves in jobs where the values of the organization are not aligned with their own personal values. The classic case of round pegs in square holes. And organizations are seeking good cultural fits in order to maximize productivity and minimize turnover.

In Milewalk’s 2014 Annual Employee Survey respondents were asked to identify the top ten elements that they consider when looking to change jobs. While compensation and employee benefits still rate number one, culture was a close second.

Company websites are now advertising their values and promoting their culture. Recruiters are going beyond competencies and skills assessments by including questions to elicit information about a candidate’s motivation. Candidates are observing the organization’s environment to get clues about the culture. They’re checking out future employers on-line to see what others have to say about the organization’s culture.

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The scariest trend of all

Okay so maybe this one isn’t quite a trend yet…but look out. According to the Financial Times, the Chartered Institute of Internal Auditors in the UK is recommending that an organization’s Board of Directors must define the culture required for success and put in place polices and systems to monitor the organization’s culture. This call is in response to the lack of accountability in the banking industry during the recent financial melt downs.

If CEO’s aren’t already motivated to manage the culture of their organizations, this move will most certainly make it a priority, at least in the UK. Could it be that we are heading down a path of compulsory culture checks?

What these trends tell us is that now more than ever, its time to focus on the cultural frontier. Organizational culture can either be your greatest asset or your greatest liability. Yes, as leaders, we owe our shareholders and business owners a profitable bottom line, however we also owe our employees the best possible workplaces. Pushing for the right culture for today and evolving as we grow into tomorrow is an obligation I believe we should all own. It doesn’t matter where we are in the organization; we can make an impact on culture.

Aligning employees with your company vision and mission statement. Discover how GoCo an help you build a wonderful culture of happy employees.

This article is by Carol Ring from carolring.ca.

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