Organizational culture

Five things you need to know about Organisation Culture

 

  1. What is Organisational Culture:

In simple terms, Organisational Culture is the way in which people in an organisation relate to each other, their work and the outside world, in comparison with other organisations. Your Organisational Culture shows how your organisation works: how things get done, the interactions between people, and employee relationships to their work and the outside world.

  • Why is it crucial for your organisation:

Organisational Culture determines how and if you are reaching your goals or key performance indicators (KPIs), so, it’s crucial to ensure that your way of working supports what you want to achieve, rather than hinders it. By shaping an Organisational Culture that fits your needs, you will be positioning the organisation to be able to reach these goals. 

  • There is no one best Organisational Culture to aim for:

There’s no one template for organisational culture. The best Organisational Culture is always contextual. The best Organisational Culture your organisation should aim for should be a culture that best supports your strategy. If you’re an up-and-coming start-up you will need a very different strategy than an already established international organisation. Also, expect that your optimal culture will probably change over time. Bigger organisations tend to operate in different contexts and face different requirements and restrictions and, therefore, one day there may be a need for more structure and processes.

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  • What are the different types of Organisational Culture?

We divide Organisational Culture into four different themes:

Optimal culture: one size doesn’t fit all. It’s never a good idea to try to apply the culture of another organisation as the optimal culture for yours. Optimal culture is the organisational culture that best supports your organisation’s strategy in order to be successful. It is crucial to keep in mind that optimal culture should always be tailored for each organisation, or function of an organisation.

Actual culture: is the culture your organisation or department currently has and should be the basis for all Organisational Culture change projects. In order to guarantee accuracy and objectivity, actual culture should be measured using a valid and objective method, such as our Multi-Focus ModelTM on Organisational Culture that thousands of global organisations have relied on for shaping their culture, since 1985.  

Perceived culture: the culture people in the organisation think it has. It is also the culture you think your organisation has. You can get more insight into the perceived culture by asking others and this might change your perception of your organisation’s culture. Implementing changes based on perceived culture alone, without measuring the actual culture, is one of the reasons why many Organisational Culture change projects fail.

Ideal work environment: is measured exactly the same way as actual culture, except that instead of asking questions about the current work environment, the respondents describe the Organisational Culture they would love to have. Measuring the Ideal work environment gives valuable information about the preferences of the people working in the organisation.

  • Your organisational culture can enable or hinder your strategy.

Our Research-backed Multi-Focus Model on Organisational Culture is a strategic tool aimed at helping organisations to have a functional culture. It consists of six dimensions:


D1     Means-oriented vs. goal-oriented
D2     Internally driven vs. externally driven
D3     Easy-going work discipline vs. strict work discipline
D4     Local vs. professional
D5     Open system vs. closed system
D6     Employee-oriented vs. work-oriented

Learn more about the organisational culture model 

Set a meeting with one of our consultants to discuss the challenges faced by your organisation and practical steps to align your Culture and Strategy.

Based on the results of your Organisational culture scans we can help you go through:

Mergers and Acquisitions are commonplace in modern global business. However, organisational culture is often overlooked in M&A processes despite it being a crucial element to success.

Change management (CM): focuses on how people and teams are affected by the organisational transition. Organisational culture plays a significant role in change management. Organisations with highly engaged employees and open and effective internal communication are more likely to succeed in their change management initiatives. We help you to:

  • Measure your organisational culture and define your optimal culture
  • Shape your organisational culture
  • Understand how your organisation culture helps or hinders you to implement your new strategy/new performance management/IT/HR system
  • Understand the importance of the role of your leadership team in organisational change.
  • Plan and implement change by working closely with you throughout the process (Change Levers) so that the process of change is as effective and streamlined as possible.

Organisational Culture Consulting:

We offer you a structured approach to measure, understand and shape your Organisational Culture. Our approach is based on data.

Our effective 5-step consulting process:

Read more about our approach to Organisational Culture 

Reach out to us to discuss the challenges faced by your organisation and practical steps to align your Culture and Strategy.

How organisational culture and national culture impact your organisation

Think of a typical restaurant experience and how it plays out in each country you have visited. From how the food is produced to how it is presented in a restaurant as well as the social etiquette you have to follow at that restaurant. Just that one experience is a reflection of how culture is a phenomenon that can be seen in everything we do.

A buzzword – demystified:

Culture has become a buzzword over the past couple of years. Culture is specific to a group of people and a learned, rather than inherited behaviour. Culture has many layers and is about how different groups of people distinguish themselves from each other.

National culture vs Organisational culture:

National Culture:

Refers to a group of people who have been brought up within a given country. In comparison to others, these individuals tend to share certain expectations of how things should be done and values around these expectations. National culture takes shape at a formative age, these impressions are completely formed by the age of 12 to 14 and are a product of the environment we grow up in. It’s easier to sense National Culture in larger groups because individual qualities supersede national qualities in smaller groups or if you interact with one individual.

If you deal with a large number of French people at the same time, the individual qualities of each will be less noticeable and you’ll begin to see what they have in common. However, this only becomes truly clear if you are able to see them in comparison to another group. For example, how a large number of French business people compare in a meeting with a large group of British business people. When all other elements are relatively equal, this is when the differences of National Culture will become most apparent.

national culture

Organisational Culture:

A large group of German people from a specific organisation in comparison to a another similar-sized group from a US corporation can demonstrate differences in National Culture. However, this group of people would not represent German or American culture as a whole. In this case, it would be wrong to assume that the culture of their organisation is identical to the culture of their country. This is because it involves two different levels of society. The company would have a culture of some sort; this is what we call Organisational Culture.

 

The definition we use for Organisational Culture is the way in which people in an organisation relate to each other, their work and the outside world, in comparison with other organisations. Your Organisational Culture shows how your organisation works: how things get done, the interactions between people, and employee relationships to their work and the outside world. Organisational Culture is a phenomenon that is measured by looking at the practices within the organisation, and how those practices differ from other organisations. Most of the activities within the organisation are then designed to meet those objectives and requirements.  You can lean on Hofstede Insights’ advanced tools  to measure the practices within the organisation to establish if the culture is functional or not. We can tell you whether the current way of working supports the execution of the goals the organisation has or hinders them.

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How National Culture and Organisational Culture are different

National Culture is based on the values that groups of individuals prefer or expect to be carried out. Organisational Culture is based on the practices that are carried out within the organisation. The difference in the root of National Culture and Organisational Culture also impacts how fast they can change. National Culture changes very slowly as the values of a collective group of people are often based on their past experiences, as well as family and historical experiences. The changes in National Culture are relatively inconsequential over time.

 

Organisational  Culture is ‘what we do’ in an organisation, and is manifested through the Symbols, Rituals, Beliefs, Attitudes, Behaviours of the people collectively in an organisation.   National Culture determines how we emotionally relate to ‘what we do’ in an organisation.

Organisational Culture is based on practices and is something that can vary greatly from organisation to organisation, regardless of the country or industry. In addition, Organisational Culture is impacted by a CEO or a charismatic leader or management team, and can shift over short periods.

Creating Organisational Culture change can create a lasting impact on intercultural management

Most organisations wanting to learn about Organisational Culture are interested in the possibility of transforming their culture. Hofstede Insights has vast experience in aligning working practices and communication in multicultural teams. We have helped companies improve cross-cultural teamwork. We truly believe that for lasting transformation, we have to focus first on the Organisational Culture.

The first step is choosing the best Organisational Culture for you. At the end of the day, if you want to create cultural change, you have to understand where you currently are, where you want to go, and the actions that will take you from point A to point B. We can help you in this transition with our advanced tools.

Reach out to us to discuss the challenges faced by your organisation and practical steps to align your Culture and Strategy.

Why an ESG strategy is critical for a ‘future-proof’ corporation

In September 2021 shareholders of Exxon Mobil stunned Industry observers when they elected two Directors nominated by a coalition of investors who believed the company need to move towards cleaner energy. “How the industry chooses to respond to this clear signal will determine which companies thrive through the coming transition and which wither.” Andrew Logan, a senior director at Ceres, a non-profit investor network that pushes corporations to take climate change seriously was quoted in a New York Times report. This massive development reflects a trend that is here to stay – Investors are going to exert more pressure on companies to pursue demonstrable environmental and social goals

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ESG defined:

Not long ago, ESG was just a buzzword, investors looked at it as a ‘good to have’. Not anymore. ESG is Environmental, Social and Governance (Corporate Governance). A growing number of Socially responsible investors are now looking at the ESG factor of their investments and no longer just the classic risk vs. return scenarios for future investments.

Younger, millennial investors are reshaping the landscape:

A 2019 survey by Morgan Stanley confirmed that ESG investing is becoming increasingly popular. More than 8 in 10 U.S. individual investors (85%) now express interest in sustainable investing, while half take part in at least one sustainable investing activity. By 2018, $12 trillion worth of investment assets (in the United States alone) were selected based on a socially responsible investing strategy. Morgan Stanley predicts this number is like to expand given the growing percentage of millennials within the larger segment of investors.

 

ESG components

ESG combines Environmental, Social and Governance factors. Environment includes everything from a company’s attitude towards climate change to the company’s use of renewable energy and how it manages waste. In certain cases it also involves direct environmental impact from a company’s operations such as deforestation or water management. The key area under the Social part of ESG is employee relations. For e.g.: do you pay your employees a fair wage or do you provide employees amenities like a cafeteria or a childcare centre on site. Diversity and inclusion are also under the scanner of many investors. Governance relates to the company’s management and how they respond to the interests of the external stakeholders like consumers and the wider community where your manufacturing facility or Corporate HQ is located. In many cases a strong and vibrant organisational culture improves a company’s ESG evaluation.

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ESG provides direction, clarity — and profits

 A new research report from Infosys Knowledge Institute (IKI) reveals that digital adoption alone is no longer enough to meet business objectives and drive profits. The study reveals that companies must now use digital to differentiate beyond traditional IT metrics, reaffirming the importance of people-focused transformation and ESG in achieving business success.  “Enterprises are at an inflection point post-pandemic. While some enterprises have seen this as an opportunity to move beyond the questions of whether and how far to digitize, some still haven’t realized the need to use these digital tools to engage their stakeholders more purposefully and respond to calls to serve people, planet, and community.” – Salil Parekh, CEO, Infosys.

The IKI report adds that when companies have high levels of tech adoption and strong ESG commitment, four out of five times (81%), they also use technology most effectively. ESG and technology effectiveness are connected because ESG informs company culture, shapes mindset, and provides a purpose that guides decision-making up and down the line. It’s why in a post-pandemic world technology alone is not a differentiator. It needs to be backed by a strong commitment to people and purpose.

Reach out to us to discuss how you can future proof your company with our structured programs that can help you meet your ESG goals.

Organizational culture

Building a flexible organisational culture for a transformative era

82% of millennials said that they consider the workplace’s technology when deciding whether or not to accept a position and 45% of this group are likely to quit a job with sub-par technology. Blended work environments might have become the norm in a post-pandemic world, but these findings pertain to Dell and Intel’s third Future Workforce Study. that was undertaken in 2016. While the pandemic might have exacerbated remote working, this transformation has been building up for much longer. Professor Walter Russell Mead (in an article in the Wall Street Journal) claimed that the world has entered a transformative era and that we need to prepare for more chaos and instability.

A flexible organisational culture is better poised to embrace the transformative era

Professor Mead called the pandemic a dress rehearsal for the transformation that is coming. The buzz around adaptive culture and flexible organisations is building as companies attempt to transition towards more flexible work environments that are ready to embrace the transformative era. David Windley, a veteran human resources leader and a Forbes council member emphasises on the need to manage outcomes and results, not inputs and processes. Having a performance-driven culture will result in successful outcomes. He believes Flex-work employees must know the level of performance expected and what metrics will be used to measure their work. The more information an employee has about expectations and key performance indicators (KPIs), the more they will flourish in a flexible environment.

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What is a flexible organisation?

A flexible organisation can adapt to new, unexpected challenges quickly and effectively. In our data-based approach to Organisational Culture, flexibility is mainly characterised by two dimensions of the Multi-Focus model™:

Organisational Effectiveness: we measure Organisational Effectiveness on a scale ranging from Means-oriented (score towards 0) to Goal-oriented (score towards 100). In a Means-oriented culture, the way in which the work is done matters the most. People focus on how they do their work. In a Goal-oriented culture, what matters the most is the outcome. Employees strive to achieve internal goals and results, sometimes even taking risks to achieve those goals. People focus on what is being done.

This graph (below) gives you an overview of what kind of behaviour you might expect in organisations along different parts of this scale

If you want your organisation to be as flexible as possible, you should aim to be as Goal-oriented as you can. But remember, Organisational Culture should always support your overall strategy.

COntrol

We measure Control as ranging from Easy-going to Strict work discipline. A very easy-going culture has loose internal structure, little control and discipline, and lacks predictability. People are free to improvise a lot and, as a result, there are many surprises. In a very strict culture, there is a great deal of internal control. People focus on being cost conscious, punctual and serious.

In the graph below, you’ll find an overview of what kind of behaviour you might expect in organisations landing in different parts of the graph.

When aiming for a flexible culture to thrive and succeed, organisations should have a culture more towards the easy-going direction. This isn’t as easy as simply aiming to score 0 (Easy-going) on this dimension. Most often there is a need for some control, like working-hours or some form of reporting, even for the most easy-going teams or functions of your organisation.

Flexibility requires easy-goingness to ensure people can think creatively and on their feet. At the same time, in most teams, you also need a goal to direct the efforts of these very easy-going workers. Just remember, the more rules and practices you implement, the less the people will be able to think for themselves and be flexible.

Many organisations want to become more flexible but also want to increase Control, in order to avoid surprises. However, avoiding surprises isn’t flexibility; Flexibility is the ability to deal with the surprises.

Reach out to us to discuss how you can future proof your company with our structured programs that can help you build a flexible organisational culture.

5 tips to manage global virtual teams more effectively

The pandemic has exacerbated virtual working environments like no other event has done before. While many companies have shifted from a WFH model to hybrid work models, business travel is unlikely to hit pre-pandemic levels any time soon, if ever. This is likely to have a lasting impact on how global virtual teams are managed. A recent survey  by Global Work Place Analytics found that culture, collaboration and connection are what people miss the most in remote work environments. The same survey estimates that 56% of the US workforce holds a job that is compatible with remote work.

how to manage virtual team effectively

Challenges of global virtual teams

The concept of remote teams is certainly not a product of the pandemic. The first decade of this millennium saw the emergence of global virtual teams as workplace technology and collaboration tools began to evolve. The challenges your organisation faces in 2022 haven’t changed much. An Economist Intelligence Unit survey back in 2009 revealed that leading people from a distance is the second-biggest challenge for virtual team managers. Back then, one in three executives agreed that virtual teams are badly managed. Just one in 20 executives said that they never experienced any difficulty in managing a virtual team.

The single most common challenge, selected by 56% of executives polled, relates to the misunderstandings that emerge as a result of cultural and language differences from teams operating globally. Nevertheless, 65% of those polled believe that the advantages of working in such teams outweigh the disadvantages. Global virtual teams are here to stay and we share five simple tips that could help you manage your global teams more effectively

1. Manage Time and distance:

The most obvious challenge can often be the most tricky. You might think it’s easy to straddle a team across time zones until such time you actually get down to setting up a call with your global team. Do keep these time differences in mind during all communications, if possible, try to rotate calls; schedule in a way that is evenly spread and that it’s not always the same people suffering from awkward call times. If team members are scattered all over the globe, the convenient window of time for a call might be very narrow, you may find yourself sending a lot of emails. Remember that even if you email someone first thing in the morning, the recipient might have just finished his or her workday and will not even see the message until the next day.

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2. Build trust

Is it possible to trust someone you’ve never met? This has been particularly challenging during the pandemic when many new team members never got to meet their colleagues even in the same city. A virtual environment and a mix of cultures both add an additional layer to that challenge. But that doesn’t mean it can’t be done.

  • Speak the truth clearly and appropriately: online environments have a tendency to increase miscommunication in general. Often, cultural differences fuel these misunderstandings. This is why clear communication is crucial. When you express yourself honestly and tell the truth, you become more reliable in the eyes of others because you increase the predictability of your behaviour.
  • Clarify and align intentions and expectations: when your intentions or expectations are implied, not clarified, you risk misinterpretations. If as a result of these misinterpretations the results are not what was expected, the level of trust in the team will decrease. When you clarify your intentions, expectations, and requests, you promote transparency in the team and increase trust. .
  • Keep your word and honour commitments: one of the oldest and simplest ways to foster trust  in a relationships between people and groups is to keep your word. Remember that a promise is a promise. When you make appointments, do it carefully, and, once set, honour them. Make it one of the things you are known for. If you are unable to fulfil a promise due to factors out of your control, let the people know that you will not be able to do it.
  • Practice consistency between speech and action: what you do is what people trust you to do.  Actions really do speak louder than words when building trust.

3. Overcome technology challenges

Even the best organisations and teams often encounter technological challenge. For instance, you might have a steady internet connection but someone else might be relying on a much slower or unreliable one. If you manage a global virtual team, you should start preparing for the first meeting way in advance. You should find out what kind of internet connections people have, and if they would be able to access a better one for the meetings if needed. You should make sure everyone is able to install and use the meeting software and maybe consider having a short call with everyone in advance to make sure everything works. And still, you should make sure everyone joins the meeting a bit before it is scheduled to officially begin in case of unexpected technical issues. You should also consider the option of having someone provide technical support if needed at the beginning of the meeting.

How Virtual Team Overcome Technology Challenges

4. Be an effective leader 

When you manage a global virtual team, you need to be visible all the time. You need to reach out to people between meetings and make sure things are going as planned, there aren’t any unexpected problems and that people know what’s expected of them. You will have to invest much more time to this than you would in a co-located setting.

The cultural element enhancing the importance of this is that you also have to know how to approach this. In some cultures, the manager is expected to follow up closely. However, in other cultures constant follow-ups may seem like a sign of distrust. Therefore, you should know who you’re dealing with and approach the situation accordingly.

5. Develop a deep understanding of global cultures

In many cultures managers are expected to focus on managing the people and make sure they have what they need in order to be effective. But in many other cultures a manager is expected to be an expert on the field he or she operates in.

Using the renowned Hofstede 6-D Model, we can show you how to manage international workforce and projects to become more successful across borders.

Culture, inherently plays a role in everyone’s behaviour. What people expect from you or other team members will depend on culture. How they interpret things, how they behave, what they signal with their behaviour and what they prefer will also depend on culture.

Reach out to us to find out about our programs and solutions that can help you build an effective organisational culture and manage global virtual teams.

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