Organizational Culture: Its critical components and how it contributes to your business results

The first time I heard the term 'organizational culture' was during a course at the IDF Officer's School. The esteemed course commander provided us with an example of two units within the same field, both very successful but with very different identities or cultures. He discussed the Paratroopers and “Golani” brigades. While the former is characterized by personal excellence, competition, and discipline, the latter is founded on camaraderie, loyalty, and respect. I believe this is an excellent demonstration that there is no one way to achieve excellence.

Organizational culture encompasses the values, norms, and practices existing within an organization. It refers to both the explicit dimension of the organization's values (declared values, behaviors, language, attire) and the implicit dimension (underlying principles and societal values upon which the organization is founded). At the core of societal culture lie its dominant ideologies (what it means to excel here, what we admire, which behavior is unacceptable), which ultimately define how things are done within the organization. What organizational culture provides us with is clear norms and expected behavior; it establishes the rules of the game and can enhance employees' sense of identification and commitment beyond their individual interests by creating a sense of unique identity.

Organizational culture as a clear image of the unique strength of the company

This will manifest in qualities such as innovation, people-oriented approach, results orientation, teamwork, efficiency, or competitiveness. The key lies in coherence, in a clear identity that most employees will agree upon and identify with. An organization lacking a clear culture, meaning it isn't guided by shared values, will often be "anemic," characterized by low energy, inconsistency, and weak leadership.

Google built a unique culture by pioneering the concept of granting creative freedom to its employees (the famous "20% time" rule) and providing special perks before the rest of the industry followed suit. Adobe establishes its technological leadership on a culture that avoids micromanagement. The company believes that employees perform at their best when given autonomy. Adobe was also among the first companies to abolish the annual review system to promote creativity and technological breakthroughs.

Organizational culture is at its best when the company's business purpose "speaks" the same language as the organizational culture. A great example of this is a company I worked for- LivePerson. The company's business purpose was "We create meaningful connections between consumers and brands," meaning providing a competitive advantage to customers through the meaningful relationships formed with them. The company's culture was also built on meaningful connections among employees, based on the assumption that in such an environment, employees would thrive. When there is alignment between the business purpose and the company's culture, a coherent and persuasive narrative is created with the potential to captivate and generate enthusiasm among the organization's members.

Should the organizational culture reflect our current identity or the identity we aspire to become?

Or, as I once heard from a senior executive: "Look at the organization's values, and understand its issues..." On one hand, a culture will only function effectively if it is perceived as authentic among the employees. Otherwise, cynicism might develop, acting as an impediment to adaptation. On the other hand, in many cases, the role of company culture is to support its strategic goals. For example, if a company shifts its focus from hardware to software, it is expected to adopt an "agile" product development methodology. Accordingly, the organizational culture is expected to be less based on authority and control and more on experimentation and adaptation. The key, often, is to leverage existing strengths to create new capabilities.

I have previously consulted a company that attempted to transition from a "participative" culture (inviting people to lead and assist beyond their daily responsibilities) to a "specialization" culture- based on people with the most relevant expertise. The strong inclination of the organization's members to teach and assist their colleagues was lavaraged to an effective internal mentoring system that significantly supported personal expertise development. In this way, the cultural change was not perceived as external and imposed, but rather as one that was built upon the company's inherent strengths that had served it over the years.

The truly intriguing part is still ahead of us - in the next article, I will delve into the implementation of organizational culture, who the stakeholders are, and what the key factors are for successful implementation of organizational culture.