Organisational culture as a driving force Dusan Basalo, Senior partner Prague, September 2016

Organizational Culture: Organisational culture as a driving force Organizational Culture: The basic assumptions, shared values and beliefs that guide the way organizational members behave toward each other and approach their work.

Culture vs. Structure Structure Culture Management Leadership Vision Organisational culture as a driving force Culture vs. Structure Management Leadership Vision Mission Values Objectives Principles Structure Culture Strategies Styles Plans Behaviours Results Predictability Change

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Organisational culture as a driving force Climate Culture

Culture vs. Structure Culture Climate Organisational culture as a driving force Culture vs. Structure Culture Understanding (beliefs, values, assumptions) “What way of work is expected from employees around here?” Climate Perception (sensory) “How things are done around here?”

Organisational culture as a driving force Challenger - 1986

Organisational culture as a driving force Columbia - 2003 According to investigator’s report, tragedy occurred as a consequence of NASA organizational culture

Organisational culture as a driving force Influence of organisational culture on long-term financial results of a company Research Kotter and Heskett Lasted for 11 years with over 200 companies of different size Identified substantial statistical correlation betwean organisational culture and financial results

Culture and business results Organisational culture as a driving force Culture and business results Adaptive (Constructive) Unadaptive (Defensive) Revenues 682% 166% Work Force 282% 36% Stock Price 901% 74% Net Income 756% 1% Corporate Culture: Kotter & Heskett 1992

Two General Types of Culture Organisational culture as a driving force Two General Types of Culture Defensive Cultures - Inactive/Reactive - How people see you is more important than what you do - Focus on blame Maintain the status quo Constructive Cultures - Proactive - Fosters innovation - Reinforces personal responsibility and accountability - Values performance

Defensive Culture Systematically undermines long term performance. Organisational culture as a driving force Defensive Culture Systematically undermines long term performance. Prevents the organization from identifying and implementing strategies and tactics that are needed to compete in an increasingly competitive world. Turf wars drive decisions. Win or lose based on beating your associates rather than competitors. How you look, not what you accomplish is most important.

Defensive Culture Syndrome Organisational culture as a driving force Defensive Culture Syndrome Achieve a dominant market position due to success, vision or luck. Success leads to more success. Begin believing its because of their brilliance. Arrogance sets in. Internal focus begins to build a bureaucracy. Deterioration of long-term performance. It’s always someone else’s fault.

Constructive Culture Everyone is expected to provide initiative. Organisational culture as a driving force Constructive Culture Everyone is expected to provide initiative. Low distortion in communication. People are encouraged to be decisive, take moderate risks, take initiative and be accountable. Grow people rather than use them as career advancement tools.

Constructive Culture Pursue standard of excellence. Organisational culture as a driving force Constructive Culture Pursue standard of excellence. Externally focused -- beat competitors not each other. Open, candid discussion and decision-making. Non-political atmosphere. Leadership vs. Management facilitating goal accomplishment rather than monitoring activities.

’How Culture Works’ Preferred Culture Actual Culture Espoused Organisational culture as a driving force ’How Culture Works’ Organisational Quality Customer Service External Adaptability Group Teamwork Co-ordination Co-operation Individual Motivation Performance Satisfaction Stress Structures Roles Influence Decision-making Systems Selection Training Appraisal Rewards Technology Job Design Complexity Interdependence Espoused Direction & Vision Philosophy Mission Goals Strategies Values Preferred Culture Actual Culture Skills/ Qualities Leadership Communication Bases of power ‘How Culture Works’ Model Copyright © 1997 Robert A Cooke PhD

When it should be changed? Organisational culture as a driving force When it should be changed? Mergers Change in ownership/management structure Major change in processes Big changes in the market Strategy change …

Top management workshops Organisational culture as a driving force Top management workshops Vision and mission Current culture Ideal culture (Culture measurement among employees) Values Behaviours (leadership) principles and indicators

Leadership Equity Assessment - LEA™ Organisational culture as a driving force Leadership Equity Assessment - LEA™ Based on the research of Gallup company - the most extensive research on motivation and engagement of employees that has ever been carried out Supplemented by the latest data from last year's survey done by Persona Global company Takes into account 13 key areas for organizational culture, motivation and engagement of employees Gives a clear picture and recommendations for improving these areas

Workshops for Culture change agents Organisational culture as a driving force Workshops for Culture change agents Employees with personal values similar to defined organizational values Employees with behaviors according to defined organizational behaviors Employees with strong personal credibility Training: How to promote new culture and react during projects and meetings

Organisational culture as a driving force Internal campaign

Organisational change sub-projects and shadowing Organisational culture as a driving force Organisational change sub-projects and shadowing Sub-projects for: Selection of new employees and induction process Career path and criteria for promotions Values and behavior principles: how to spread it Efficiency of processes and meetings Innovation, engagement, company branding … Consultants do shadowing during those meetings

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Organisational culture as a driving force Thank you!