In a Down Economy, Don't Ignore Culture Issues
This is where things get sticky, with many companies stranded in the mire of a down economy that has just this week finally been declared a recession.
As the saying goes, a good economy is like a rising tide that lifts all boats. That rising tide helps float a lot of companies, sometimes even those encrusted and otherwise weighed down with organizational problems. In the bad times, however, the tide recedes and a lot of those problems beneath the proverbial waterline become both more visible and more treacherous.
How can companies avoid becoming victims of a low economic tide? One of the best ways may be to focus on their corporate cultures, suggests a major new global study commissioned by the American Management Association (AMA) and conducted by i4cp. The study, which is based on 1,967 global survey respondents, indicates that companies with positive corporate cultures - as reflected by eight specific cultural characteristics - are more likely to report greater success in the marketplace than are other organizations.
The Cultivating Effective Corporate Cultures study also found strong correlations between positive corporate cultures and the degree to which respondents report that their companies are 1) operating at their potential, 2) successfully meeting their goals, and 3) stating that theirs is a good place to work.
In short, a positive culture is linked to efficient operations and successful goal achievement. This allows companies with such cultures to float higher in the water than their competitors, and, it turns out, they can adapt to rougher seas more effectively.
Consider this: In the past, strong corporate cultures were often associated with the inability to adapt quickly. Strong cultures could benefit in stable times but were viewed as entrenched and resistant to change. The conventional wisdom was that, to make needed changes, a company needed to somehow "unfreeze" its culture, pour behaviors and values into some type of new cultural mold, and then "refreeze" it again. Needless to say, that's too often a messy, time-consuming and ultimately ineffective process.
But the new AMA/i4cp study shows something that goes against the conventional wisdom: Positive corporate cultures are more receptive to change and adapt quickly to meet new challenges. Specifically, the study found that only about a quarter of respondents said that management practices in their organizations were good or very good at the "facilitation of change initiatives" but that this ability was highly correlated with having a positive corporate culture.
Indeed, amid today's fast-changing markets, the AMA/i4cp research team assumed that one of the eight hallmarks of a positive culture is its ability to "promote quick responses to needed changes." The other seven hallmarks are as follows:
For example, the study found that only about a third of companies said that their culture "brings out the best performance in employees" to a high or very high degree. And this should be seen as especially problematic since, of the eight characteristics, this one is most highly correlated with market performance. Yet, in the bad times, when many companies are often cutting resources and staff, it's more important than ever to bring out the best performance in people.
One looming question for today's organizations is whether the down economy will have a positive or negative impact on their corporate cultures. The study asked respondents about the degree to which a variety of external factors influence their cultures. The top answer was "current economic conditions," which 61% said influence their cultures today to a high or very high extent.
In some ways, this makes perfect sense. A down economy can lead to organizational actions, such as downsizings, that can have a negative impact on culture, from reducing the trust levels of workers to eroding the resources devoted to innovation. The irony, of course, is that it's during the times of weak economies when need for positive corporate cultures is most important. Innovation, quick responses to change, strategy execution, top-notch employee performance: These are all essential to organizations striving to excel in a poor economy.
Based on the study findings, the research team developed a number of strategies that should help organizations cultivate more positive cultures. Below are a few of the highlights:
As the saying goes, a good economy is like a rising tide that lifts all boats. That rising tide helps float a lot of companies, sometimes even those encrusted and otherwise weighed down with organizational problems. In the bad times, however, the tide recedes and a lot of those problems beneath the proverbial waterline become both more visible and more treacherous.
How can companies avoid becoming victims of a low economic tide? One of the best ways may be to focus on their corporate cultures, suggests a major new global study commissioned by the American Management Association (AMA) and conducted by i4cp. The study, which is based on 1,967 global survey respondents, indicates that companies with positive corporate cultures - as reflected by eight specific cultural characteristics - are more likely to report greater success in the marketplace than are other organizations.
The Cultivating Effective Corporate Cultures study also found strong correlations between positive corporate cultures and the degree to which respondents report that their companies are 1) operating at their potential, 2) successfully meeting their goals, and 3) stating that theirs is a good place to work.
In short, a positive culture is linked to efficient operations and successful goal achievement. This allows companies with such cultures to float higher in the water than their competitors, and, it turns out, they can adapt to rougher seas more effectively.
Consider this: In the past, strong corporate cultures were often associated with the inability to adapt quickly. Strong cultures could benefit in stable times but were viewed as entrenched and resistant to change. The conventional wisdom was that, to make needed changes, a company needed to somehow "unfreeze" its culture, pour behaviors and values into some type of new cultural mold, and then "refreeze" it again. Needless to say, that's too often a messy, time-consuming and ultimately ineffective process.
But the new AMA/i4cp study shows something that goes against the conventional wisdom: Positive corporate cultures are more receptive to change and adapt quickly to meet new challenges. Specifically, the study found that only about a quarter of respondents said that management practices in their organizations were good or very good at the "facilitation of change initiatives" but that this ability was highly correlated with having a positive corporate culture.
Indeed, amid today's fast-changing markets, the AMA/i4cp research team assumed that one of the eight hallmarks of a positive culture is its ability to "promote quick responses to needed changes." The other seven hallmarks are as follows:
- A cooperative culture
- A culture that is aligned with strategy
- A culture that encourages innovation
- A culture that encourages strategy execution
- A culture that fosters trust
- A culture that brings out the best in employees
- A culture where decision-making authority exists at all levels.
For example, the study found that only about a third of companies said that their culture "brings out the best performance in employees" to a high or very high degree. And this should be seen as especially problematic since, of the eight characteristics, this one is most highly correlated with market performance. Yet, in the bad times, when many companies are often cutting resources and staff, it's more important than ever to bring out the best performance in people.
One looming question for today's organizations is whether the down economy will have a positive or negative impact on their corporate cultures. The study asked respondents about the degree to which a variety of external factors influence their cultures. The top answer was "current economic conditions," which 61% said influence their cultures today to a high or very high extent.
In some ways, this makes perfect sense. A down economy can lead to organizational actions, such as downsizings, that can have a negative impact on culture, from reducing the trust levels of workers to eroding the resources devoted to innovation. The irony, of course, is that it's during the times of weak economies when need for positive corporate cultures is most important. Innovation, quick responses to change, strategy execution, top-notch employee performance: These are all essential to organizations striving to excel in a poor economy.
Based on the study findings, the research team developed a number of strategies that should help organizations cultivate more positive cultures. Below are a few of the highlights:
- View culture from a performance perspective, not just an employee satisfaction or ethics perspective.
- Harness culture to facilitate change.
- Use positive cultural characteristics to manage talent better; there is a strong correlation between culture and good talent management.
- Develop leaders who model desired behaviors.
- But look beyond leaders to issues such as the strategic direction of the company.
- Clearly communicate values to everyone; for example, tell stories about past successes and how challenges were met.
- Don't forget to include those who work remotely in your plans to nurture a positive corporate culture.