We all know the signs of a poor organisational culture, don’t we? –
Don’t assume so. In this article we explore some of the less obvious signs that an organisation may have cultural issues that need to be addressed.
We can all list the obvious signs that an organisation’s culture is poor. People are demotivated and disengaged; poor behaviour thrives; teams don’t work well; complaints and staff turnover run at consistently high levels.
Those can indeed all be signs that an organisation’s culture has gone badly wrong – possibly to the point of being toxic.
However there are a number of much more subtle signs that an organisation’s culture is holding it back. Below we discuss 10 situations where an organisation’s culture may be causing it to stumble.
In reading these brief scenarios below readers should bear in mind that culture encompasses a great deal more than the list of values that management put on the wall or in the Annual Report. Some of the most powerful elements of culture are informal – these include unofficial but established work practices, habits of paying attention to certain things (but ignoring others), longstanding departmental or personal rivalries, ingrained thought patterns, ingrained approaches to certain issues and shared values and experiences that unite staff members and shape perceptions.
If your organisation suffers from any of the issues listed below then we would urge you to treat this as a red flag – a sign that something may be wrong and a cue to investigate further. Culture can be managed and changed, but only if issues are clearly identified.
1. Growth and progress stall
Growth and progress often depend on input from staff – new ideas, productivity improvements, embracing new initiatives. If your organisation suddenly stops moving forward for no obvious reason, this could be caused by cultural issues.
In particular, it could be an early sign of staff disengagement. That could just be due to short term fatigue if the organisation has recently been under strain; it could, however, be a sign of a more serious malaise or obstacle in your organisation’s culture.
For example, an organisation may have reached a point where it can only create more efficiencies and can only progress key initiatives if teams work ever more closely together – but this may run contrary to the organisation’s culture. Take the example of a company that has separate sales teams for different products, with the teams strongly encouraged to compete against each other. Each team guards its own clients and its orders jealously. The launch of a new type of product that transcends the existing product boundaries may require these teams to work together – and possibly to give up clients and orders to each other. That is likely to be a huge struggle at first and is unlikely to succeed in the long run unless positive steps are taken to change the culture.
2. New “star” employees don’t perform well
It can be notoriously difficult to bed in new employees. Even “star” hires do not always work out. Indeed, it is well documented that star performance is not guaranteed to translate from one culture and work environment to another. Someone who is a “star” in one organisation (or even in one part or branch of an organisation) may not be nearly as effective in another.
However, if this happens consistently it may be a sign that your organisation’s culture is problematic. An open and effective culture will make way for newcomers and will embrace the new skills and aptitudes that they bring. A culture that is unwilling to do that and instead rejects or smothers new talent and new ways of doing things is clearly not operating in the organisation’s best interests and may have other issues.
3. Loss of competitiveness/effectiveness
If your commercial organisation suddenly starts losing ground to competitors (or your non-commercial organisation becomes less effective) then you will, of course, want to know why.
It is well worth considering whether your organisation’s culture is playing a part. People may have become disengaged, or your culture may no longer be as aligned with your organisation’s purpose as well as it once was.
Both cultures and objectives change through time, as do external factors. It is important to ensure that they continue to be aligned.
For example, in the 1990s the trend for Nouvelle Cuisine was at its height in London and many leading restaurants made the food the star of the show. Little else mattered. Their mission was to give diners exquisitely presented, fresh, new flavours. The whole establishment – and its culture – was built around an obsessive focus on the food. These days, while the quality of the food remains important, most high end restaurants focus on the overall dining experience. Food is just one element of that. To deliver that requires a significant shift in culture from the Nouvelle Cuisine days.
Similarly, coffee shops have moved on from being places that simply had the right Italian coffee making machine to produce good coffee. High end coffee shops now offer an all-around coffee drinking experience – excellent coffee is only part of the formula. That, too, has required a change of culture in many of these establishments.
4. Organisation can do basic things well but is challenged to do anything more complicated
Organisations that are highly competent at performing relatively simple or common tasks but that struggle with more complex or unusual tasks should ask why – particularly if this begins to affect their performance.
This may be because the organisation operates in silos that do not work particularly well together. That, in turn, can be because they are not designed to work well together, or because the organisation lacks leaders who can lead across silos.
But the issue may not be solely one of organisational structure. There may also be a cultural component to it, with strong resistance to different silos working together. This could be due to established rivalries between silos (perhaps even encouraged by a management that believes that internal competition is healthy) – or it could simply be because of strongly embedded work practices. If established procedures rely strongly on the trust, communication and close working relationships that have been built up over time within a particular silo then they are unlikely to lend themselves to working across more than one silo.
5. Management find it difficult to direct the organisation – there is little or no response to instructions and attempts to introduce changes
If an experienced management team finds it difficult to “steer” an organisation or to implement relatively minor changes this may be because of short term issues, such as “change fatigue” following a major reconfiguration. However it could be due to a deeper seated cultural resistance to change – which is potentially very serious and could mask other issues.
Resistance to change can be based on fear, which is never a good thing. It can also be the result of a culture that places a high value on stability, certainty and predictability. Predictability is important where, for example, safety or health outcomes are involved and this should never be compromised. In these settings change must be achieved carefully in ways that preserve this essential elements of the culture. But in other sectors a culture that places too great an emphasis on maintaining stability can be an obstacle to progress as markets and customers change.
6. Organisation does not retain its focus on key objectives
If the organisation finds it difficult to maintain a focus on its key objectives but instead constantly drifts off course, there is likely to be a cultural element to this.
It may be that the organisation’s culture places more importance on something other than the organisation’s primary objective. For example, we have come across an infrastructure company with an overriding culture of engineering excellence where almost obsessive over-maintenance of every piece of equipment was the norm. The resulting over-spending on maintenance undermined the primary objectives of the company (to produce returns for shareholders and provide a responsive service for customers) by making it unprofitable and inflexible.
In other cases, organisational objectives may not be clear enough. Management teams are sometimes far less clear in their messaging than they think they are. Confusion may be caused by mixed messages, different messaging from different managers or constant changes. These are management issues but there can also be a cultural element, particularly around communications.
For example, if financial performance figures are not normally shared outside the management team then it will be difficult to get staff to focus on profitability and make it their (and thus the organisation’s) main priority. They will focus on other things, and this focus will rapidly become ingrained in the culture. Likewise, if the majority of management emails received by employees give instructions about practices and procedures that must be followed, this is what they will focus on rather than on customer service, profitability or other objectives.
7. Not a “learning organisation”
Many of the world’s leading companies put their success, their resilience and their adaptability down to the fact that they are “learning organisations”- where both the organisation and its personnel constantly learn, evolve and develop. This in turn requires experimentation and risk taking.
It takes a particular sort of culture to enable people to experiment and to take risks. Employees need to feel that they can try something new and fail without suffering negative consequences. This in turn requires a positive attitude towards failure, seeing it as an opportunity to learn. A “blame” culture, a culture that punishes failure (often very subtly, through unspoken disapproval or raised eyebrows) or one that focuses on “always being right” will not support a “learning organisation”.
This sort of culture can have other issues. It can make innovation very difficult. It can also be very resistant to change because people will be reluctant to do things in a new way. People will not wish to be involved in new products or new ways of working if they fear that any setbacks will be deemed to be “failures” for which they will be blamed.
8. Poor Risk Management
There can be many reasons for poor risk management or for an organisation to be “unlucky” – with everything that can go wrong seeming to go wrong. If your organisation’s risk management is poor it is worth considering whether organisational culture plays a role in this.
People’s first instincts when a new challenge arises are often driven (at least in part) by culture. When they come across something new do people tend to tap into external resources and to seek out as much external data and information as possible? Or do they tend to turn inwards and to make judgements solely based on whatever knowledge and experience is already available within the organisation – particularly the views of senior managers?
If the latter approach is embedded in the culture of the organisation, this can lead to poor risk management. The instinct to turn inwards and to ignore or mistrust many of the available external sources of information is not a good starting point for an objective risk assessment. This is exacerbated by rejecting a data driven approach in favour of pure “we know best” gut instinct. Furthermore, the gut instinct is often provided by people who were involved in taking or sanctioning the risks in the first place and whose views are thus not independent.
9. Few disagreements
We all recognise that excessive conflict can be a sign of a toxic culture. However, the opposite can also be a red flag. A certain level of debate and professional disagreement is a sign of a healthy culture. If this is lacking then the culture should be examined.
There can be a number of reasons for there being very few professional disagreements in an organisation. Few of them are good. It could be that people are scared to speak up. They may feel that there is little point in disagreeing as they feel disempowered and disenfranchised. They may simply not care enough to disagree. People may also keep quiet if disagreements have a habit of becoming unpleasant because there are no mechanisms in place for resolving professional disagreements. Finally, the organisation may simply have fallen into a habit of seeing certain issues through one perspective only and may be in need of fresh or original thinking.
10. Few HR complaints
A high number of HR complaints is an obvious red flag, but a very low number can also be a warning sign.
It may be that the organisation is very harmonious. But it may also be the case that people are afraid to complain, or think that it is pointless, because their perception is that the organisation does not handle complaints well and even punishes those who do raise issues.
That may or may not be true – but it should always be remembered that people’s perceptions are as much a part of an organisation’s culture as reality. Any such perceptions need to be addressed urgently.
