Organisational culture and its effect on business performance

Organizational culture is more often than not something which is unplanned. It develops over time as a reflection of the way managers and teams learn to do things.  It reflects behaviors, routines, and standards that have come to be seen as preferred.

As organizations grow the culture starts to change and often not for the better.  Confusion sets in because things that were once acceptable are not anymore.

What would happen if you, as a leader, managing the evolution of your organizational culture?  How much more smoothly could your teamwork if you planned for the change of your culture instead of letting it just happen?

A 1992 study by Kotter and Heskett reported that companies that managed their cultures well saw revenue increases of 682% versus 166% for the companies that did not.  An even more recent survey by Denison Consulting concludes that companies demonstrating higher levels of performance in key areas of corporate culture, including adaptability, consistency, mission, and involvement, deliver better results when it comes to return on assets, sales growth and increased value to shareholders.

Why are the results too much better for organizations that manage their cultures?

It’s simple.

When you manage your culture as well as you manage your people, it creates an environment which supports and guides teams to do their work properly.

A strong organizational culture has a direct impact on employee performance;

  • It creates an environment of trust and cooperation.
  • There is an agreed understanding of process, standards, and goals
  • Clarity leads to more efficient decision making.
  • It boosts individual and team confidence
  • It establishes a common ground for every member of the organization
  • Employees become committed to the organization’s goals and purpose.
  • Communication is less complicated so messages are readily understood.

When you create a positive organizational culture you help people to work together constructively and cooperatively.  It allows them to grow, contribute and adapt to the environment around them.  If your organization can adapt to change and harness the energy and positivity of its people, it is far more likely to be successful.

Have you invested time and energy into creating the corporate culture that you want?

Phone 1300 719 665 or +61 424 447 616



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