1. September 30, 2016 Culture Accreditation Workshop Day 1 1

2. Workshop Objectives Introduce the How Culture Works model, which incorporates organizational climate and culture Present the OCI Circumplex Interpret and apply the OCI and OEI information presented in the Feedback Reports Make connections between Ideal Culture, Causal Factors, Operating Culture, and Outcomes Identify areas of improvement and levers for change to develop a Constructive culture Use case study to learn how to debrief and apply feedback reports 2

3. 3 Culture: An Organizational Imperative Culture needs to be the top priority of top executives because—regardless of whether they pay attention to it—culture exists and affects everything that matters most to the organization and its stakeholders. Janet L. Szumal, Ph.D. Human Synergistics/Center for Applied Research, Inc.. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved

4. 4 Constructive Cultures Matter Better Financial Performance Does your organization have a Constructive Culture? Positive Customer Experience Greater Employee Engagement Higher Productivity Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

5. Copyright © 2015 by Human Synergistics International. Research and development by R. A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. 5 Why Constructive Culture Matters Correlations from Szumal, J.L. Reliability and Validity of the OEI. Arlington Heights, IL: Human Synergistics/Center for Applied Research. Constructive Passive/ Defensive Aggressive/ Defensive Intention to Stay Teamwork Quality Adaptability Satisfaction Turnover Stress EngagementDisengagement

6. Copyright © 2015 by Human Synergistics International. Research and development by R. A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. 6 Human Synergistics and Towers-Perrin Research on Culture and Profitability Type of CultureProfitability (Over 3 Years) ConstructiveHigher earnings Passive/Defensive No Statistically Significant Correlation Aggressive/DefensiveGreater volatility Profitability data provided by Towers-Perrin: Profitability measured by earnings/sales ratios based on averages for the three-year period; volatility scores based on standard deviations. Culture types measured by the OCI ®.

7. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. 7 Improved Culture and Financial Performance at Lion Y1Y3Y5Y7Y9

8. Copyright © 2015 by Human Synergistics International. Research and development by R. A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. 8 Readership Institute Research Study Strength of Cultural Norms 1 Profit 2 Readership 3 Customer Satisfaction 3 Constructive++0 Passive/Defensive000 Aggressive/Defensive00-- N=79 newspapers; one-tailed correlations with list-wise deletion. + signifies positive correlation significant at p<.05. 0 signifies relationship is not statistically significant. 1 Organizational culture measured by Organizational Culture Inventory ®, based on factor scores. 2 Regression residual of profit not explained by revenue and circulation strata. 3 Based on surveys of newspaper readers carried out by the Readership Institute (Northwestern University) Analyses by Robert A. Cooke, Ph.D. Copyright © by Human Synergistics International. Northwestern University’s Media Management Center Correlations from research with newspaper organizations

9. Integrated Diagnostic System 9 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

10. OCI Circumplex Assesses 12 sets of norms required for people to “fit in and “meet expectations” Norms specify the ways in which all members are expected to approach their work and interact with one another 10 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

11. OCI Circumplex—Dimension 1 11 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Concern for Task Reflect expectations for behaviors that are task-oriented Concern for People Reflect expectations for behaviors that are people-oriented

12. OCI Circumplex—Dimension 2 12 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Higher-Order Satisfaction Promote behaviors directed toward the fulfillment of higher-order satisfaction needs Lower-Order Security Promote behaviors directed toward the fulfillment of lower-order security needs

13. Types of Organizational Cultures 13 Constructive Passive/Defensive Aggressive/Defensive Encourage members to interact with people and approach tasks in ways that will help them to meet their higher-order satisfaction needs. Encourage or implicitly require members to interact with people in ways that will not threaten their own security. Encourage or drive members to approach tasks in forceful ways to protect their status and security. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.   

14. OCI Circumplex—Statistical Norming 14 The bold center ring in the Circumplex reflects the median score for each of the 12 styles Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

15. OCI Circumplex—Cultural Norms 15 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

16. How We Know It Works ReliabilityValidityNorms The extent to which an instrument is consistent in measuring whatever it does measure The extent to which an instrument effectively does what it is intended to do Statistics that supply a frame of reference and give meaning to the results obtained from an instrument Answers the question: Can you depend on the instrument to measure things uniformly? Does the survey measure what it is being used to measure? Can the scores along different things being measured be compared to each other? OCI Example: Members of organizations generally agree on the extent to which Constructive Styles are expected of people like themselves. The Constructive Styles are related to important criteria of effectiveness such as employee engagement, teamwork, service/ product quality, and profitability. Across organizations, raw scores along Constructive Styles such as Affiliative are higher than raw scores along Defensive Styles such as Approval. 16

17. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. How Culture Is Supposed to Work 17 Philosophy Mission Individual Level Group Level Organizational Level Goals Strategy Ideal CultureCurrent CultureOutcomes OCI-IdealOCIOEI Values and BeliefsNorms and Expectations Effectiveness Focus Instrument Measuring “What should be expected here” “The way we are expected to do things around here” “How we’re doing here” Assumptions Espoused Values

18. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. How Culture Works Model 18 Philosophy Mission Structures Systems Technology Skills/Qualities Individual Level Group Level Organizational Level Goals Strategy Ideal CultureCausal FactorsCurrent CultureOutcomes OCI-IdealOEIOCIOEI Values and BeliefsLevers for ChangeNorms and Expectations Effectiveness Focus Instrument Measuring Assumptions Espoused Values

19. Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved OCI ® /OEI Feedback OCIOEIOCI/OEI Measures 12 sets of behavioral norms associated with three general types of cultures: Constructive, Passive/Defensive, and Aggressive/Defensive It is a survey designed to measure attitudinal and behavioral indicators of effectiveness. It also measures the internal factors and conditions that can directly and indirectly—through an organization’s culture—impact effectiveness. The OCI measures both values and norms. The OEI measures the internal factors that influence culture and the outcomes that are affected by culture. 19 IdealCurrent

20. Report Walk-Through Executive SummarySynopsis of the organization’s results Section 1: IntroductionOverview of the feedback report Section 2: Ideal CultureDescription of the organization’s Ideal Culture Section 3: Causal FactorsDescribes factors that are currently driving the organization’s current operating culture Section 4: Current Culture Description of the organization’s Current Operating Culture Section 5: OutcomesDescribes the organization’s outcomes indicative of its long- term effectiveness Section 6: Planning for Change Outlines a plan for change based on information contained in the feedback report 20

21. Report Walk-Through Cont.’ Section 7: Causal Factors (Subgroups) Contains the causal factor results broken down by the subgroups identified by the organization Section 8: Culture (Subgroups) Contains the organization’s OCI results broken down by subgroups. Section 9: Outcomes (Subgroups) Contains the organization’s OEI results for outcomes broken down by subgroups. AppendicesContains additional information and analyses that may be useful in interpreting the organization’s OCI/OEI results Correlations Comparative Profiles Respondent Demographics 21

22. Section 2: Ideal OCI The organization’s Ideal Culture is based on the responses of members who completed the OCI-Ideal in terms of the behaviors and personal styles that should be expected (i.e., espoused values) to maximize effectiveness. The Ideal profile is the organization’s benchmark. This profile describes the ways in which people within the organization should interact with one another and approach their work. 22 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

23. Ideal Culture OCI-Ideal Values and Beliefs How Culture Works: Ideal Culture Aidan’s Beverage Company 23 Focus Instrument Measuring “What should be expected here” Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Mission Statement: To be a key independent beverage distributor in the regional area, serving all channels of retail trade with alcoholic and non-alcoholic beverages. We strive to give our employees the tools, ability, and flexibility to help our retail partners maximize sales of our products, ultimately providing the best service, value, and choices to our shared customer, the consumer.

24. Historical Ideal It is based on the average responses of 560 members within 56 organizations who completed the OCI in terms of the behaviors that ideally should be expected of members to maximize their organizations’ effectiveness. Can be used as a benchmark against which to compare your organization’s Current Culture results. The Ideal profile is appropriate across industries but can differ across societies. 24 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

25. Historical Ideal vs. Ideal Historical Ideal Culture All Respondents n=560 Ideal Culture All Respondents n=13 25 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

26. 26 International Ideal Profiles Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Anglo ClusterGermanic ClusterNordic Cluster Latin European ClusterLatin America Cluster Near Eastern Cluster Far Eastern Cluster

27. Section 3: Causal Factors 27 Drive or shape the operating culture and influence level of effectiveness When aligned with values, the Current and Ideal profiles are similar When not aligned with values, the Current and Ideal profiles look different Identifies what is currently driving the operating culture

28. Causal Factors - Five General Categories Mission and Philosophy Structures Systems Technology Skills/Qualities 28

29. Summary Barchart of Causal Factors 29

30. 30 Mission & Philosophy Articulation of mission Customer service focus Structures ▼Total influence ▼Distribution of influence Empowerment ▼Employee involvement Systems Human Resource Management: Selection and placement Training and development Respect for members Appraisal and Reinforcement: Fairness ▼Use of rewards ▼Use of punishment Goal Setting: Clarity Challenge ▼Participative Acceptance Technology ▼Autonomy ▼Variety ▼Significance Task identity ▼Feedback ▼Interdependence Skills/Qualities: Communication: Upward Downward Learning Bases of Power: Organizational Personal Leadership: ▼Interaction facilitation Task facilitation ▼Goal emphasis ▼Consideration Goals Strategy Ideal CultureCausal Factors OCI-IdealOEI Values and BeliefsLevers for Change Focus Instrument Measuring Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. How Culture Works: Causal Factors Aidan’s Beverage Company

31. The Culture Disconnect 31 Philosophy Mission Structures Systems Technology Skills/Qualities Individual Level Group Level Organizational Level Goals Strategy Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Resources Demands

32. Section 4: Current Operating Culture The organization’s current operating culture is based on the responses of members who completed the OCI- Current in terms of the behaviors and personal styles that are expected (i.e., behavioral norms). The operating culture has an impact on individual, group, and organizational effectiveness—particularly over the long term. 32 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

33. How Culture Works: Current Culture Aidan’s Beverage Company 33 Philosophy Mission Structures ▼Total influence ▼Distribution of influence ▼Employee involvement Systems ▼Use of rewards ▼Use of punishment ▼Participative Technology ▼Autonomy ▼Variety ▼Significance ▼Feedback ▼Interdependence Skills/Qualities ▼Interaction facilitation ▼Goal emphasis ▼Consideration Goals Strategy Ideal CultureCausal FactorsCurrent Culture OCI-IdealOEIOCI Values and BeliefsLevers for ChangeNorms and Expectations Focus Instrument Measuring Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

34. Current versus Ideal Current Operating CultureIdeal Culture 34 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

35. Section 5: Outcomes An organization’s culture is one of the key factors that determine its effectiveness, especially over the long term. The OEI measures various outcomes that have been shown to be related to culture. Such measures provide a good indication of the organization’s ability to successfully adapt to changes and prosper in the future. 35

36. Outcomes Assessed by the OEI The OEI measures 12 specific outcomes that are related to the operating culture of organizations. These outcomes are organized into three categories: - Individual Outcomes - Group Outcomes - Organizational Outcomes 36

37. Outcome Measures IndividualGroupOrganizational Focus on the extent of a positive, rather than a negative, impact on personal states and attitudes of its members. Positive measures: Role clarity Motivation Satisfaction Intention to stay Focus on the extent of how effectively the organization integrates and coordinates the efforts of the members and its units. Specific measures: Intra-unit teamwork Cooperation Inter-unit coordination Department-level quality Focus on the organization’s effectiveness with respect to its external environment. Specific measures: Organizational level quality External adaptability 37

38. Summary Barchart of Outcomes 38

39. How Culture Works: Outcomes Aidan’s Beverage Company 39 Philosophy Mission Structures ▼Total influence ▼Distribution of influence ▼Employee involvement Systems ▼Use of rewards ▼Use of punishment ▼Participative Technology ▼Autonomy ▼Variety ▼Significance ▼Feedback ▼Interdependence Skills/Qualities ▼Interaction facilitation ▼Goal emphasis ▼Consideration Goals Strategy Ideal CultureCausal FactorsCurrent CultureOutcomes OCI-IdealOEIOCIOEI Values and BeliefsLevers for ChangeNorms and Expectations Effectiveness Focus Instrument Measuring Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Individual Level Positive : Role clarity Motivation Satisfaction Intention to stay Negative : Role conflict ▼Job insecurity Stress Group Level Intra-unit teamwork and cooperation Inter-unit coordination ▼ Department-level quality Organizational Level Organizational-level quality External adaptability

40. 40 Philosophy Mission Structures Systems Technology Skills/Qualities Individual Level Group Level Organizational Level Goals Strategy Assumptions Espoused Values Defensive Misattribution of Success Resources Demands Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

41. The Cultural Bypass 41 Philosophy Mission Structures Systems Technology Skills/Qualities Individual Level Group Level Organizational Level Goals Strategy Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

42. Climate vs Culture Climate “The way things are around here.” What people sense and perceive. Members form an understanding of “how things are” (present) or “how things have been” (past) around here. Includes members’ perceptions of systems, structures, job design, leadership skills/qualities Reflects outcomes of the culture such as engagement, teamwork, and perceived quality. Culture “The way we are expected to do things around here.” What people believe and know. It reflects shared values (what is important) and beliefs (how things work). It encompasses norms and expectations that influence the way members of the organization think and behave (what is expected or implicitly required of me). Norms and expectations (Current Culture) are not always in alignment with shared values (Ideal Culture). 42

43. Which Should Leaders Focus On? “Both” Many leaders focus exclusively on managing or changing climate. Both climate and culture influence performance and effectiveness. Culture tends to be a more reliable predictor of behavior and performance than climate. Employees act on culture, and the culture is shaped and reinforced by the climate. Climate dimensions therefore need to be driven by values to bring cultural norms into alignment with the Ideal Culture. 43

44. Why Focus on Both? Customer Service Example Climate leads to Culture leads to Outcomes Positive Climate Customer Service Focus: Everyone in the organization is responsible for customer satisfaction Constructive Culture Affiliative: We are expected to deal with others in a friendly, pleasant way Organizational Outcomes Organizational-Level Quality: We have a reputation for superior service Mixed Climate Customer Service Focus: Customer needs are not emphasized in this organization Aggressive/Defensive Culture Oppositional: We are expected to remain aloof from the customer situation Organizational Outcomes Organizational-Level Quality Our quality of products and service is inconsistent Negative Climate Customer Service Focus: We tend not to respond to changing needs of customers Passive/Defensive Culture Avoidance: We are expected to shift responsibilities to others Organizational Outcomes Organizational–Level Quality: Personally, I would not choose to do business with the organization 44

45. Why Focus on Both? Customer Service Example Climate leads to Culture leads to Outcomes Positive Climate Everyone in the organization is responsible for customer satisfaction We respond to changing needs of the customer Constructive Culture I am expected to show concern for people We are expected to deal with others in a friendly, pleasant way Organizational Outcomes We have a reputation for superior service Our high quality products and services, meeting expectations Mixed Climate Customer needs are not emphasized in this organization We provide information about customers Aggressive/Defensive Culture It is expected that we stay detached and perfectly objective We are expected to remain aloof from the customer situation Organizational Outcomes Our quality of products and service is inconsistent We react to needed changes Negative Climate In the organization we tend not respond to changing needs of customers My team is not responsible for helping customer or generating sales Passive/Defensive Culture We are expected to take few chances It is expected to shift responsibilities to others It is expected to cast aside solutions that seem different or risky Organizational Outcomes Personally, I would not choose to do business with the organization New programs are not efficiently implemented across the organization 45

46. 46 Organizational Culture Shared values and assumptions (Ideal Culture) that can lead to behavioral norms and expectations (Current Culture) Organizational Climate Shared perceptions and attitudes about the organization Human Synergistics’ Organizational Culture Inventory® (the most widely used and thoroughly researched culture assessment) 1.Engagement survey 2.“Culture” survey 3.Great workplace survey To what extent are people expected or implicitly required to…? Constructive Work to achieve self-set goals Cooperate with others Maintain personal integrity Passive/Defensive Conform Agree with everyone Check decisions with superiors Aggressive/Defensive Point out flaws Outperform their peers Never make a mistake Do you agree or disagree that….? At work, my opinions seem to count (1. Engagement) I have the materials and equipment needed to do my job (1) I clearly know is used is expected of me (1) There is a clear strategy for the future (2. Culture) Teamwork rather than hierarchy is used to get things done (2) This organization is responsive and changes easily (2) Management delivers on its promises (3. Great Workplace) We have special, unique benefits here (3) Managers show appreciation for good work (3) Note: Some of these climate factors are measured by Human Synergistics’ Organizational Effectiveness Inventory™

47. Ideal CultureCurrent CultureOutcomes OCI-IdealOCIOEI Values and BeliefsNorms and Expectations Effectiveness Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. How Culture Works 47 Philosophy Mission Goals Strategy Ideal CultureCausal FactorsCurrent CultureOutcomes OCI-IdealOEIOCIOEI Values and BeliefsLevers for ChangeNorms and Expectations Effectiveness Focus Instrument Measuring Assumptions Espoused Values Structures Technology Skills/Qualities Systems Really Group Level Intra-unit teamwork Inter-unit coordination Departmental quality Organizational Level Product/service quality External adaptability Individual Level Role clarity Engagement Intention to stay (Stress)

48. And, How Culture Changes 48 Philosophy Mission Structures Distribution of influence Employee involvement Systems Reinforcement Goal setting Technology Job autonomy Significance Skills/Qualities Consideration Communication Goals Strategy Ideal CultureCausal FactorsCurrent CultureOutcomes OCI-IdealOEIOCIOEI Values and BeliefsLevers for ChangeNorms and Expectations Effectiveness Focus Instrument Measuring Assumptions Espoused Values Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved. Group Level Intra-unit teamwork Inter-unit coordination Departmental quality Organizational Level Product/service quality External adaptability Individual Level Role clarity Engagement Intention to stay (Stress)

49. Positive Correlations 49 Causal Factor The more Employee Involvement, the more Humanistic–Encouraging The less Employee Involvement, the less Humanistic-Encouraging Outcome The more Role Conflict, the more Dependent The less Role Conflict, the less Dependent

50. Negative Correlations 50 Causal Factor The more Use of Punishment, the less Humanistic-Encouraging The less Use of Punishment, the more Humanistic-Encouraging Outcome The more Stress, the less Affiliative The less Stress, the more Affiliative

51. Comparative Profiles Employee Involvement – High (Top 15%) Employee Involvement – Low (Bottom 15%) 51 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.

52. What is Organizational Climate? “The way things are around here.” Climate is perceptual: What people sense and perceive. Through perceptions we form an understanding of “how things are” (present) or “how things have been” (past) around here. Climate includes members’ perceptions of systems (e.g., reward systems), structures (e.g., distribution of influence), and technology (e.g., the design of their jobs). It also reflects outcomes of the culture such as engagement, teamwork, and perceived quality. 52 Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved

53. What is Organizational Culture? “The way we are expected to do things around here.” Culture is cognitive: what people believe and know. It reflects shared values (what is important) and beliefs (how things work). It encompasses norms and expectations that influence the way members of the organization think and behave. However, norms and expectations (Current Culture) are not always in alignment with shared values (Ideal Culture). 53