2. Organizational Culture
1 Organizational culture is the behavior of humans …and
the meanings that the people attach to their actions
2 Culture includes the values, visions, norms, working
language, systems, symbols, beliefs and habits
3 Organizational culture affects the way people and
groups interact with each other, with clients, and with
stakeholders
-Wikipedia
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3. In Short…its…
“… the way things get done around here”
-Deal and Kennedy (1982)
Copyright 1996 Scott Adams
Copyright 2014 The Angel Advisors, LLC
4. Schein’s Definition of Corporate Culture
(2004)
“The set of shared, taken-for-granted implicit assumptions that a
group holds and that determines how it perceives, thinks about, and
reacts to its various environments.”
Artifacts comprise the physical (tangible) components of the organization
that relay cultural meaning. Dress code, furniture, company stories and
fables, etc.
Values - Basic beliefs and assumptions include
individuals' impressions about the
trustworthiness and supportiveness of an
organization, and are often deeply ingrained
within the organization’s culture. Documented
Corporate Values, Purpose/Mission Statements.
Assumptions are the elements of
culture that are unseen and not
cognitively identified in everyday
interactions between organizational
members. - 'unspoken rules’.
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5. Entrepreneurial Culture
An Entrepreneurial Organizational Culture (EOC) is a system of shared values, beliefs
and norms of members of an organization, including valuing creativity and tolerance of
creative people, believing that innovating and seizing market opportunities are
appropriate behaviors to deal with problems of survival and prosperity, environmental
uncertainty, and competitors' threats, and expecting organizational members to behave
accordingly.
- Stephen McGuire (2003)
Elements include:
People and empowerment focus
Value creation through innovation and change
Attention to the basics
Hands-on management
Doing the right thing
Freedom to grow and to fail
Commitment and personal responsibility
Emphasis on the future
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6. Corporate Culture and Performance
Heskett and Kotter (1992)
“…strong corporate cultures that facilitate adaptation to a
changing world are associated with strong financial results”
Non-EC
EC
Revenue Growth
166%
682%
Employment Growth
36%
282%
Stock Price Growth
74%
901%
Net Income Growth
1%
756%
“We found that those cultures highly value employees, customers, and owners
and that those cultures encourage leadership from everyone in the firm. So if
customer needs change, a firm’s culture almost forces people to change their
practices to meet the new needs. And anyone, not just a few people, is
empowered to do just that.”
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7. Cisco : Corporate Culture and Performance
(Crawford International and HR.com - 2006)
“Companies with adaptive corporate cultures and strong
leadership practices financially outperform those that do not”
Stock Price Growth
Net Income Growth
Non-EC
70%
-47%
EC
204%
989%
“…clients that have an adaptive or agile corporate culture
have historically thrived in the face of organizational
change while those with non-adaptive cultures suffer
through change”
Copyright 2014 The Angel Advisors, LLC
8. Prosek
“Building a culture that encourages autonomy, risk-taking, and entrepreneurial
behavior is challenging… for companies that want to out-think and out-pace the
competition, an entrepreneurial culture isn't optional: it's an absolute necessity.”
–
Jennifer Proseck
Proseck’s four pillars:
• Authenticity -- Demonstrate your sincerity by being enthusiastic about
•
•
•
entrepreneurial strategies and actions pursued by the business.
Commitment to People – An entrepreneurial culture is based on the idea
that each individual can be a powerful force for change in the organization.
Support the professional development of your staff, celebrate exceptional
work, and don't forget to have fun.
Commitment to the Business -- Align an individual's interests with those of
the business.
Continuous Effort -- The work of building a company’s culture never ends.
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9. A Founders Vision: Mindspring’s CVB’s
1) We respect the individual, and believe that individuals who are treated with respect
and given responsibility respond by giving their best.
2) We require complete honesty and integrity in everything we do.
3) We make commitments with care, and then live up to them. In all things, we do what
we say we are going to do.
4) Work is an important part of life, and it should be fun. Being a good business person
does not mean being stuffy and boring.
5) We are frugal. We guard and conserve the company's resources with at least the
same vigilance that we would use to guard and conserve our own personal
resources.
6) We insist on giving our best effort in everything we undertake. Furthermore, we see a
huge difference between "good mistakes" (best effort, bad result) and "bad mistakes"
(sloppiness or lack of effort).
7) Clarity in understanding our mission, our goals, and what we expect from each other
is critical to our success.
8) We are believers in the Golden Rule. In all our dealings we will strive to be friendly
and courteous, as well as fair and compassionate.
9) We feel a sense of urgency on any matters related to our customers. We own
problems and we are always responsive. We are customer driven.
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10. Establishing and Maintaining an
Entrepreneurial Culture
• Starts with who you hire
– You absolutely must have the discipline not to hire until you find
the right people. - Jim Collins
• Your reward system
• Autonomy and respect
– When you become a leader success is all about growing others.
- @jack_welch
• Consistent communication of vision
• No fear!!!
– Ability is what you're capable of doing. Motivation determines
what you do. Attitude determines how well you do it. - Lou Holtz
• Innovate or Die!!!
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11. Schein’s Final Word
“…culture is the most difficult organizational attribute to change,
outlasting organizational products, services, founders and leadership
and all other physical attributes of the organization.”
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13. Lou finds a way…
“Culture is everything”
- Lou Gerstner
Who Says Elephants Can’t Dance
180
160
140
120
100
80
60
40
20
0
IBM Market Cap.
Before Lou
After Lou
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14. Game Show: Spot the Culture
From: XXX
Sent: Thursday, May 23, 2002 12:17 PM
To: CEO
Subject: my staff's morale
In preparation for the strategy session coming up, I know that one important component of that is
employee morale... how to recruit, retain and motivate key employees. I have also been hearing more
complaints recently not only from my staff but other employees. So...I asked each person that reports
up to me (not just my direct reports) to let me know the things that they loved about our company and
the things that frustrated them. Wow did I get an ear full. I know that some of these employees
(primarily finance and H/R have access to more inside information than the general employee) and I
know that for the most part they are excellent at keeping their rumblings amongst themselves.
However, ZZZ has heard many of these same things from employees from all areas in her reviews so I
think some of these thoughts are more prevalent than we might like to think. I think everyone thinks
you have created an awesome company as you will see reflected in the things they love.
However, I do think the morale issue is something we need to address especially since the job market
in Atlanta is starting to open up more and we cannot afford to lose employees at the very time that we
are gearing up with critical partners on the non-CCCC side. Lets discuss next week the start of a plan
to address some of these issues. p.s. Don't shoot the messenger.
XXXX
Copyright 2014 The Angel Advisors, LLC
15. Some analysis
1.
“In preparation for the strategy session coming up”
a)
b)
2.
“I have also been hearing more complaints recently not only from my staff
but other employees”
a)
3.
Culture(-): We expect our managers to keep their employees here and happy.
“Lets discuss next week”
a)
6.
Culture(-): why is it a good thing that employees are keeping their grumblings to
themselves?
“we cannot afford to lose employees”
a)
5.
Culture(+): We expect free and open communication of issues and our
leadership to keep abreast of employee moral
“I know that for the most part they are excellent at keeping their rumblings
amongst themselves”
a)
4.
Culture(+): Advance preparation and readiness are expected
Culture(+): We include our employees in our high level planning
Culture(-): On issues of importance its OK to wait until next week
“p.s. Don't shoot the messenger”
a)
Culture(-): We shoot whistle blowers
Copyright 2014 The Angel Advisors, LLC
16. The Take Home
1. Organizations with an Entrepreneurial Culture
consistently financially outperform non-EC
organizations
2. Culture is often derived from or a factor of the
Founder(s) values and purpose
3. Culture is something very REAL, and can be readily
seen in most of a firms daily interactions with its
employees and customers
4. Culture has been shown by Schein to be the most
difficult organizational attribute to change, though it is
changeable.
…and finally…
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17. …don’t let this happen to you...
Copyright 1995 Scott Adams
Copyright 2014 The Angel Advisors, LLC