9 things every leader should keep an eye on

Culture is difficult to quantify, measure and manage, but making note of nine distinct components can help leaders assess their organization's strengths and weaknesses.

In her article for Insigniam Quarterly, Editor in Chief Shideh Sedgh Bina lays out nine components of corporate culture and provides anecdotes that illustrate these facets.

1. Language and network of conversations. To understand culture, it's essential to observe how people in a company interact, what they talk about, the language they use and how they structure conversations. For instance, Ms. Bina said she worked with one company that upheld collaboration as a value and success strategy, but senior executives partook in "email wars." This suggested an adversarial "gotcha" culture within the company, which would ultimately trump collaboration. The following eight components can also be assessed via conversations.

2. Customer orientation. How the customer is viewed, served and interacted with is another important glimpse into culture. One hospital system Ms. Bina worked with had set the strategy of becoming a national leader in patient service, satisfaction and outcomes. Despite this goal, when her team interviewed hospital executives and staff, they noticed nobody brought up patients without prompting. Instead, they were more than comfortable talking about financial concerns. "If your culture is truly patient-centered, then the patient is not a background concern and the budget is not the main topic of discussion," she wrote.

3. What is actually valued. The best way to find out what values are operational in your organization is to listen to how leaders assess each other. Note what is recognized and complimented and what is looked down upon. Ask people what it really takes to succeed. "Looking at what people truly hold to be important will tell you what is framing their choices and is a far better way to gauge culture than examining values written on a poster," wrote Ms. Bina.

4. Accountability and responsibility. Accountability is being answerable for providing or governing so as to meet the conditions needed to bring about the intended results. Individual discussions can reveal how little accountability exists within an organization. For example, Ms. Bina's team was once brought in to work with a company for a project that was $50 million behind a $500 million target. "By way of getting to know the interviewee, we asked executives to describe the jobs and the results for which they were accountable," she wrote. "One after another, we heard answers that talked about a series of tasks. Not one person other than the person who hired us talked about results. One of the senior leadership executives even shrugged and said that in his role he had absolutely no accountability for business results. How about that for a bird’s-eye view of culture and its impact on performance?"

5. Traditions, rituals, heroes, legends and artifacts. Companies have legends or stories that are referred to almost on a daily or weekly basis, and certain status symbols within an organization give people a sense of belonging. It's critical to ensure these stories and artifacts are consistent with the culture you are trying to create. For instance, a CEO Ms. Bina worked with believed one way to improve competitiveness was through a thrifty corporate culture. "But what we discovered was that a sign of being a successful executive at this particular company was wearing a diamond-encrusted Rolex," she wrote. "How can you authentically drive a culture of thrift while sitting in a room full of diamond-encrusted watches?"

6. Leadership dynamics. How leadership is viewed and overall leadership style in a company is another significant contributor to culture and the ability to execute on strategy. If leadership promotes patient-centeredness, for example, how do executives reinforce that value? How do they interact with patients? There should be behaviors and structures in place that show executives are involved in those efforts, too.

7. Unwritten rules for success. Recognizing an organization's unwritten rules is an essential part of a cultural transformation. "As much as we'd like to think otherwise, all of the avenues to success within an organization are not spelled out in the employee handbook," according to the report. For instance, what really determines an employees' likelihood for promotion — job performance or their standing with certain executives? The latter may ultimately distract employees from the overall success of the company as they navigate an ambiguous professional dynamic. Unwritten rules sometimes demand alteration.

8. Decision rights and processes. Another component of culture is who makes what decisions, at what pace and whom they must consult to make those calls. Some companies like Ritz-Carlton allow each employee to spend up to $2,000 per day to please a customer or fix a problem without consulting a manager. Other companies keep such decision rights extremely limited, such as one with 45,000 employees and a rule that no contract involving more than $25,000 or travel over $500 could be approved by anyone outside the C-Suite.

9. Legacy. Every company has a story about its origins, founders and successes and failures along the way. "Spend more than a day in any Johnson & Johnson Company and someone will bring up the J&J Credo as a reference point for action," wrote Ms. Bina. "The credo is a clear-cut statement aimed at generating an allegiance to the mission of serving patients, physicians, nurses, and so on — and makes a point to list shareholders last in a long list of stakeholders. And whilst the company has at times had breakdowns, the credo always serves as a mechanism to get back on course, resulting in one of the most consistently high-performing companies of all time."

 

Read the complete article from Insigniam Quarterly.

 

© 2014 Insigniam

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