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How do organizations go about identifying the exact elements of the culture it has in place? Many conduct an audit of the existing culture. The beginning step of this process is to ask the senior executives how they would describe the culture, followed by an organization-wide survey of employee opinions to validate the information provided by executives.
Such audits can identify any conflicting values and analyze actions taken by employees and management to determine if those actions support or detract from particular values the company desires as part of its culture. A gap analysis is performed to identify how far away the actual culture is from desired culture. This represents a considerable opportunity for the senior management team to develop actionable plans to close the gap. It is important to remember, however, that the success of any planned changes will be in direct proportion to the level of commitment given to the change. In addition, once commitment is given by the CEO and senior management to the need for changes to attitudes, beliefs and behaviors, it will take some time before these changes become part of everyday culture.
A culture borne out of effective leadership, empowered employees, strong development programs, good communications and a real focus on customers, will result in enhanced productivity and improved workforce retention. In 1992, John Kotter and James Heskett published Corporate Culture and Performance, a landmark study of more than 200 US companies. They concluded that over time, organizations that managed their staff well saw their share prices increase more than 10 times higher than organizations that did not. Studies have also demonstrated that poor cultural fit is a major factor behind failed mergers.
Gallup conducted a survey of over 3 million American employees regarding engagement levels. Analysis of the survey results showed that 71% of Americans who go to work every day are not engaged in their job. American businesses are operating at one third of their capacity. The cost to the American economy could exceed a trillion dollars in lost productivity.
Unfortunately, organizational culture has its drawback. Firstly, it is not easy to demonstrate a hard and fast link between cultural change and business improvement – a majority of the evidence is based on common sense. For these reasons, changing culture is virtually impossible without commitment from top and middle management and tangible benefits or rewards for everyone else.
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