Impact of Organizational Culture on Performance

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Impact of Organizational Culture on
Performance
Leadership Forward Group, LLC

• Michigan Local Government Benchmarking Consortium

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What is a Culture?

• Hutchinson Encyclopedia definition In biology,
  the growing of living cells and tissues in
  laboratory conditions.

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What is an Organizational Culture? Definition

The specific collection of values and norms that
are shared by people and groups in an
organization and that control the way they
interact with each other and with stakeholders
outside the organization. Wikipedia
In sociology and anthropology, the way of life
of a particular society or group of people,
including patterns of thought, beliefs, behavior,
customs, traditions, rituals, dress, and
language, as well as art, music, and literature.
Archaeologists use the word to mean the surviving
objects or artifacts that provide evidence of a
social grouping. Hutchinson Encyclopedia
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Value Proposition

• If an organization can identify its cultural
  constraints and dissonance then it can remove
  social system barriers leading to improved
  employee optimization, business practices, and
  overall organizational performance

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The Effects of Organizational Culture on Business

• Structure does not support the required
  activities
• Employees who know where things are and who to
  talk with and how to get things done leave the
  organization stranded
• Situations change, ideas change, however the
  organizations practices do not respond to those
  changes
• Employees who know or think they know how to
  improve the organization attempt to implement
  change and find that they are defeated by known
  conventions

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Result

• If leadership does not orchestrate systemic
  change the organizations culture will at best
  remain stagnant loosing the curve on performance
  and productivity

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Cultural TransportabilityBest Practices

• Practices work based on the founding
  organizations structure and practices
• Practices are based on the organizations
• unique culture
• Organizations need to understand
• their constraints and dissonances

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Identified need Way for Leadership to Determine
Performance Constraints

• Cultural Constraints
• Cultural constraints are imposed social behaviors
  that inhibit or detract the ability of the
  organization to perform to its desired vision to
  lead to desired outcomes in an optimized way.
• Dissonance
• Cultural dissonance is the internal conflicts
  that take away from effective and efficient
  performance. Dissonance is measured both
  horizontally (between similar levels i.e., peers,
  and departments) and vertically (between job
  levels i.e., CEO and the lowest level worker).

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Evaluation Process

• Intent (purpose)
• Identify municipality social strengths that help
  achieve the organizations vision/mission
• Identify challenges that constrain its
  fulfillment (performance)
• Measure cultural constraints and dissonance
  within an organization that leads to performance
  limitations

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Measurement Focus

• Key areas
• Organizational Design (Organizational Structure)
• Knowledge Management (Intellectual Capital)
• Strategic Direction (Knowledge)
• Culture (Organizational Culture)

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Measurement Focus Organizational Design

• Organizational Structure
• Infrastructure
• Interrelationships of work units
• Physical environment
• Reporting structure
• Reward and punishment structure
• Work process management
• Technology

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Measurement Focus Knowledge Management

• Intellectual Capital
• Structural how the organization is organized
• Collaborative worker external relationship with
  suppliers, customers, and the community at large
• Human employee knowledge, skills, and
  experience
• Social Capital internal exchanges that create
  benefit

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Measurement Focus Strategic Direction

• Knowledge of
• Key business drivers
• Constituent desires
• Strategic direction
• Organizational
• Operational principles and practices
• Guiding leadership principles
• Success measures

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Measurement Focus Culture

• Organizational Culture
• Espoused leadership philosophy
• Organizational values
• Aligned practices
• Supervisory
• Work
• Employee attitudes and beliefs

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Measuring Organizational Culture

• Representative random sample
• Response methodology
• Liker Scale
• Multiple choice Yes/No/Dont Know/NA
• If yes Explain
• If no Explain
• Ratings
• Fill in

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Summary

• If an organization can identify its cultural
  constraints and dissonance, then it can remove
  social system barriers leading to improvement in
  employee optimization, business practices, and
  overall organizational performance

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• Question Answer