9 Dimensions of Organizational Culture Employees Care About
When business leaders think of digital transformation, they need to focus on four levers – innovating around the business model, the talent strategy to complement the business model, the leadership style and percolating the cultural norms to the rest of the organization. Changing the culture of the organization is arguably the toughest lever of the four. The talent strategy complements the business model and the leader's role lies in leveraging the team at the top to change how every employee drives the transformation in every day behavior.
Values and behaviors
When organizations look at the values they articulate on the posters, most organizations sound the same. Customer obsession, integrity, teamwork, innovation, diversity, courage, saving the planet, have all been used by organizations. If the posters have now become interchangeable. Yet when you read what employees say anonymously, you get a clear sense that the same value may get implemented very differently in different organizations.
Innovation at Pixar may mean something different from the behavior it evokes at Amazon. The employees are often the best people to tell you what it feels like to work in an organization. What makes them stay and what makes them leave can be a rich source of insight about the culture, its leadership style etc. Microsoft today has a market cap more than any other company in the world. It is bigger than the three A’s (Apple, Amazon and Alphabet) on that count. Satya Nadella, humbly attributes it to the cultural change. He describes it as a learn-it-all culture.
When Satya Nadella took over, this was the company that was stagnating. But Nadella’s predecessor Steve Ballmer had shouted to all 13,000 employees on the day of his retirement, “Soak it in all of you. You work for the greatest company in the world.” Microsoft had a know-it-all culture. Employees were hesitant to surface new ideas for fear of breaking from the charted course. A new leader often has to translate the values into norms of behavior. That translates an abstract concept into tangible behavioral norms.
The cultural norms
Nadella’s translated the cultural shifts by three shifts in norms:
Customer-centricity:Nadella hired almost 5000 specialists to make people understand how customers were using cloud-based services.This told the rest of employees that the customer mattered.
Speed of response:Meetings are often the by-product of hierarchical structures. Nadella freed up the sales people from several obligatory meetings. That greased up the organization and built speed.
Incentivize the new norms: Nadella used performance bonuses to encourage sales people to go beyond selling fixed-contracts. This is a great example of partnering with HR to change culture.
When Ed Catmull of Pixar made “Incredibles” he took a bold bet. Disney was already successful. Yet he decided to move from 2D animation to creating 3D animation through code. He took a bet on a director whose last movie was a giant failure. That action creates the cultural DNA of the organization. It changes the behavioral norms. Everyone around understands what the word Innovation translates to.
The Culture 500
If Microsoft’s growth is a by-product of the company’s culture, so could Wells Fargo – the third largest bank in US. In February 2018, Wells Fargo lost nearly $30 billion in market capitalization in a single day. The company had reportedly opened more than 2 million accounts without authorization from customers. The bank’s financial fraud was simply an extension of the porous norms of corporate ethics at Wells Fargo much before the fraud was discovered. The feedback from employees of Wells Fargo on the job site Glassdoor had been consistently pointing out the toxic culture that encouraged such behaviors.
Glassdoor has collected more than 49 million reviews and employee insights, covering approximately 900,000 organizations over more than a decade. Employees submit anonymous reviews which employers cannot remove (especially the critical ones). Employee feedback can often be the weak signal that describes the organization’s culture.
Recently MIT partnered with Glassdoor – one of the go-to sites for jobs to understand if they could create a measure of organizational culture. Using Machine Learning and human judgement, the employee feedback was used to create a measure of culture.They identified nine cultural values in the study they term as Culture 500. These nine values are:
Agility/ Nimbleness:Employees can respond quickly and effectively to changes in the marketplace and seize new opportunities.Does the internal bureaucracy of the organization come in the way of course corrections?
Collaboration/ teamwork: Employees work well together within their team and across different parts of the organization.
Customer focus: Employees put customers at the center of everything they do, listening to themand prioritizing their needs.
Diversity: Company promotes a diverse and inclusive workplace where no one is disadvantagedbecause of their gender, race, ethnicity, sexual orientation, religion, or nationality.
Execution excellence: Employees are empowered to act, have the resources they need, adhere to process discipline, and are held accountable for results.
Innovation: Company pioneers novel products, services, technologies, or ways of working.
Integrity: Playing by the rules. Honesty.
Performance driven: Company rewards results through compensation, informal recognition, and promotions, and deals effectively withunderperforming employees.
Respect: Employees demonstrate consideration and courtesy for others and treat each other with dignity.
While these nine values (and their synonyms) seem to be the most frequently occurring in stated values, what employees look for are the behaviors that people display in their day-to-day interactions. While Travis Kalanick was the CEO, Uber taught its new hires the 14 values at Ubervarsity.
The world celebrated the valuation of Uber and ascribed it to its values like “Always be hustlin’” and “Step on toes”.It was built on a view that for me to succeed I must kill my peers. The value of “principled confrontation” was designed to encourage employees to challenge authority without fear. On the ground, it translated to bullying the weak colleague.When Travis was sacked by the Board, there were more than 200 cases of harassment, bullying and gender discrimination. There were reports of interns working a 100 hours a week and being paid for 40.Read: Culture Eats CEO for Breakfast on the removal of Travis Kalanick as CEO of UBER
Comparison of culture
The reportshows how it is possible to understand which values are the strongest and which ones need attention. Amazon employees find the organization high on Innovation, Customer-centricity & Diversity but rate it low on Respect and Collaboration.That seems consistent with New York Times article about Amazon’s culture. The title was Inside Amazon: Wrestling Big Ideas in a Bruising Workplace.https://youtu.be/B-xdfQv3I1kThe framework makes it possible to compare one’s organization against the peers.It allows comparison with benchmarks that cut across industry sectors. Amazoncomes out way ahead of Apple, Google and Netflix when it comes to Innovation. When compared on the dimension of Customer-centricity, Disney, Four Seasons and Nordstrom are ahead of Amazon. Read: How to change organizational culture
Putting this to work
What does this Culture 500 framework mean for an organization that is not featured in this report?
These nine common values can be a great place to start getting an understanding of the organization’s culture. Ask your employees to rate your organization on these values. Get them to rate each value on a scale and also share qualitative remarks to explain what makes them feel so.
Keep it anonymous. That gets people to be honest.
Visit the Glassdoor site and see what employees have liked or disliked about your company culture.
Share the results with your employees. They anyway know what they say about the culture in informal settings. Your candor and courage will be greatly appreciated.
Ask the employees for ideas on how to address the weak spots.
Repairing a broken culture takes much longer. A number of start-ups laugh at these needs of articulating values. Quite often the founding team gets together and chooses values that support revenue growth but ignore elements like diversity, respect etc that they think comes in the way of achieving scorching rates of growth. There is no doubt that it is well worth the investment.When someone asks you if culture change can help the company make money, you can point to the Microsoft market-cap and share the evidence.
Written for my Business Line column dated 18 July 2019
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