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Organizational Culture: Does it Matter? Can it be Managed?

By John VanDeusen, Executive Partner at Currie Management Consultants

Also, published at LinkedIn.com

In this post, I’ll answer three key questions: What is organizational culture? Why does it matter? Can it really be managed and, if so, how?

I’ve been noticing an increasing amount of discussion on the web and in print devoted to the matter of an organization’s culture. Some recent Google results:

“10 Examples of Companies with Fantastic Cultures – Entrepreneur”

“Examples of Organizational Culture and Its Importance – Grasshopper”

“5 Company Culture Examples Worth Emulating – Business Hub”

While most business owners are aware that something ‘cultural’ is going on in their organization, few may think it deserves any deeper consideration. This is unfortunate because culture can prove to be a strong lever for improving a company’s functioning and profitability.

What is organizational culture?

Edgar Schein, MIT professor emeritus and the foremost thinker in this area, describes organizational culture as a “pattern of shared basic assumptions learned by a group as it solves its problems of external adaptation and internal integration.” Schein (1992) sees culture as operating at three levels in any organization:

  • Visible artifacts: Anything that would be visible to an outside observer, e.g., behavior patterns and work processes, the way the physical environment is organized, dress codes, company symbols/credos/logos, etc.
  • Espoused beliefs and values: What people say about “what we do around here and why we do it,” e.g., core values and guiding principles, as well as cherished stories about the company’s history and significant accomplishments.
  • Basic (unconscious) beliefs and values: Deeper feelings, mindset and motives about mission, relationships, human nature, etc., which drive words and actions.

In short, culture permeates everything said and done in any organization.

What Matters?

Organizational culture can be a driver of employee engagement and productivity, innovation, safety, reputation, value for money, etc. As an organizing force, culture can make any or all of these aspects of your company better or worse. Several attributes are key:

  • Strength: the extent that people clearly understand, can articulate and act according to its dictates. A weak culture may lead to uncertainty, friction and disappointment among employees and customers.
  • Outlook: A culture should strive for positive character, through proactive beliefs, words and actions that draw people in.
  • Coherence: The various facets of the culture should be internally consistent, not conflicting.
  • Focus: The best cultures concentrate on a few, vital aims with respect to creating and sustaining momentum in the desired direction.

Here are some examples of how all of this can translate into value not just for shareholders, but for everyone who participates in a strong, proactive and focused culture:

  • Companies with a participative culture can have an ROI nearly twice as high as firms with less participative firms (Denison, 1990).
  • Companies that managed their cultures well over an eleven-year period saw revenue growth four times higher than those that did not, and net income increases of 756% versus 1% (Kotter & Heskett, 1992).
  • Customer satisfaction and loyalty: Gillespie, et al (2008) found that organizational culture has a strong correlation with customer satisfaction and loyalty
  • Flamholtz (2001) found that business units adhering to a company’s preferred culture had greater profitability (as measured by EBIT), than units that did not.

Can Culture Be Managed? How?

Several authors have published good guides for culture management. Here are three I recommend: Roger Connors and Tom Smith (2012), Change the Culture, Change the Game, Jon Katzenbach, Ashley Harshak, et al (2012), Don’t Blame Your Culture; and Eric Flamholtz and Yvonne Randle (2011), Corporate Culture: The Ultimate Strategic Asset.

To get started, the steps I will suggest you take:

  1. Take Stock: What is the current state of your organization’s culture – the words, actions and beliefs that are most prevalent in day to day actions? How are these impacting customers, employees and business results? You could interview or survey to try to get a sense of these, but I find a much stronger approach is to bring together a cross-section of your stakeholders (including) customers to engage in some straight talk about their impressions.
  2. Define: Set the preferred direction for the culture. Identify the few key things most needed or desired from the culture to support the business, going forward. E.g., what is the desired orientation to customers, to employees, to performance and accountability, to innovation, etc. These should build directly from your company’s mission and core values. (If you are using a group meeting for the prior step, this can be a second topic for discussion.)
  3. Design: Seek to discover people and actions that can help catalyze or reinforce the desired changes. Katzenbach and Harshak suggest that you seek to engage four types of people in this work: pride builders, role models, networkers and early adopters. Work with them to design a simple, meaningful plan to start making the changes needed to tune up (or transform) your culture. It’s okay to begin with just one or a few items and see how well they work.
  4. Deploy: Put the plan into action. You may find that some desired changes are already happening somewhere in the company. Recognize and support these, wherever they are working. Where you don’t see anything relevant happening, drive new actions by incentivizing them in some manner.
  5. Keep Score: Regularly monitor your culture-building and -reinforcing activities in play to assess cumulative impact. Lend additional support and recognition to sustain momentum. Learn from both successes and failures. Repeat steps 1 and 2 every year or two.

Please contact me if you have any comments on the content of this post or would like to learn more about managing organizational culture. jvandeusen@curriemanagement.com.

References

Connors, Roger and Smith, Tom. 2012, Change the Culture, Change the Game. Portfolio

Denison, Daniel, 1990, Corporate Culture and Organizational Effectiveness. Wiley.

Flamholtz, Eric, 2001, Corporate Culture and the Bottom Line. European Management Journal, 19(3): 268-275.

Flamholtz, Eric and Randle, Yvonne, 2011, Corporate Culture: The Ultimate Strategic Asset. Stanford Business Books

Gillespie, Michael, Denison, Daniel, Haaland, Stephanie, Smerek, Ryan and Neale, William, 2008, Linking organizational culture and customer satisfaction: Results from two companies in different industries. European Journal of Work and Organizational Psychology.

Katzenbach, Jon, Harshak, Ashley, et al (2012), Stop Blaming Your Culture, in http://digitaledition.strategy-

business.com/allarticle/25249/134704/134704/allarticle.html. Also, available as a Kindle Edition from Amazon.

Kotter, John & Heskett, James, 1992, Corporate Culture and Performance. Free Press.

Schein, Edgar, 1992, Organizational Culture and Leadership. Jossey-Bass.

Photo Contest!

Want to attend a two seminar at The Currie Training Center for free?  Send us your photo!

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Currie Management Consultants, Inc. is proud of the great work being done by dealer clients across North America.  Send us your favorite photo of your food drives, community events, Little League teams, projects for the homeless, etc.  We want to see all of the great work!

Here’s the link to enter!

Revenue Growth – Currie’s Strategic Plan and Growth Theme for 2017

2017 is all about Revenue Growth.  As we are finishing up 2016, let’s think about how we are going to manage our growth this coming year, and how we are going to continue to pursue not just excellence, but a new level of distinction for our companies.  How do we figure out a growth and revenue enhancement strategy as we look at the economy right now?  How do we meet the challenge of staying profitable during a time of growth? How do we achieve a new level of “what it looks like when it’s right”?  The answer can be found in Currie Success Principle #4:  Strategy, and in Currie Management Consultants, Inc.’s newest seminar, 2017 Revenue Growth Strategy for Equipment Distribution Companies.

According to the Bureau of Economic Analysis (http://www.bea.gov) the U.S experienced a slim GDP growth of .8% in the first quarter of 2016.  The second quarter showed a marginally larger growth rate, around 1.1%.  Also noteworthy is the fact that profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment [CCAdj]) decreased $24.1 billion in the second quarter, in contrast to an increase of $66.0 billion in the first quarter of 2016.

Warren Buffett shared some encouraging economic insights in his most recent annual letter to shareholders at Berkshire Hathaway, Inc.  His approach to predicting economic activity is to take a long-term view.  A deceleration in GDP growth for the short-term is not as alarming as some people would have investors and business owners believe.  And the measurement is not one that can be looked at in isolation:  consumers, business owners, and politicians need to think about other correlating factors, and include the consideration of those factors when looking at economic growth or decline.

One such factor is population growth.  The U.S. population growth rate is trending around .8% annually.  The per capita GDP growth rate, and dollars per capita, depend upon population growth as an element of the predictive calculations that economists project.

Another area that must be considered is the development of technology.  The efficiency that technology has created in the American and global workplaces is not something that is going away –rather that continuous transformation in our lives will endure and thus carry on a trend of higher efficiency as we move into the future.

Taking those, and other factors into the equation, the math tells us that the economy is headed toward a substantial yield in actual per capita dollars per person, as the next generation comes of age.  Remember last quarter when I shared a review of Andrew Carnegie’s The Gospel of Wealth? Buffett, and other experts, believe that income and lifestyle inequality will always exist.  However, when predicting long term outcomes, we must also consider an increased life expectancy, and higher standard of living as time moves forward.  This validates the mindset that analysts need to look long-term, and Currie clients need do so as well.  Remember Currie Success Principle #2:  Vision and The Big Picture.

Here’s an interesting quote from Mr. Buffett’s letter:

“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.”[i]

Although long-term analysis is key in predicting the wealth of future generations, we experience cycles in our economy, and sometimes those cycles can be quite dramatic.  Currently there is a slow rate of GDP growth and the impact of that can have a severe effect on the short-term health of many businesses, as indicated earlier by the reference from the Bureau of Economic Analysts.  However, all is not gloom and doom in our corner of the world, but since equipment dealers and distributors today are facing a slowdown cycle, the Currie team is introducing a new seminar aimed at rolling out a comprehensive revenue growth strategy for 2017.

Currie Management Consultants, Inc. has identified the key areas that are critical to a new, and precise, overall strategy.  Bob Currie will lead the charge on implementing specific actions and best practices that will keep our businesses strong and healthy.  During the two-day program, 2017 Revenue Growth Strategy for Equipment Distribution Companies, the Currie Team will stand together with Dealer Principals and Investors, as we navigate through a short-term tight economy and a downturn in the availability of new business. And Currie will introduce new, innovative methods for industry leaders to succeed and grow through account management, account penetration, and winning business from your competition.  These strategies will be supported by micro-strategies including:

  • Scripting
  • Managing the Sales Force
  • Achieving Growth in the Aftermarket Departments through methods such as second segment service work and proactive parts selling
  • Measuring the key liquidity benchmarks to keep your “finger on the pulse”
  • Marketing the new strategy through Internet and social media
  • And more…

This program is offered October 11-12, 2016 in Washington DC.  Registration is available here:  2017 Revenue Growth Strategy for Equipment Dealers.  This seminar has been designed specifically for our highly successful dealer clients, and it is in keeping with Currie Success Principle #8:  Growth and Adaptability.  Register online or call us at 508-752-9229 for assistance.

[i] Warren Buffett’s 2015 Annual Letter to Shareholders of Berkshire Hathaway, Inc. http://www.berkshirehathaway.com/letters/2015ltr.pdf

Announcing the new Currie Training Center website

Exciting things are happening, and The Currie Training Center is growing rapidly.  Have you hired some new manager(s)?  Are you an executive looking for deeper Currie Model training?  Are you promoting some people, or looking to develop your succession plan?  These are all great reasons to visit our new website and register for some upcoming seminars.

Featured Program – Leadership Development 2017, beginning February 7-8, 2017.  This is an intense, year-long program which combines all of the Currie Model practices, from Currie Financial Model to Rental Department best practices, to Service Department Profitability, to Account Management and more.  Along with all of the Currie Model departmental training, participants will begin with the Myers-Briggs Type Indicator and learn many advanced leadership and management theories:  effective communication, Situational Leadership, Emotional Intelligence, Executive Roles in a Distribution Company, Team Building and Problem Solving, and more.  This is a critical program for all C-Level Executives, Department Managers, and all people identified as succession plan!  Space is limited in this program!

Follow the link for a complete list of all seminars currently open for registration at The Currie Training Center.

CURRIE PRESS RELEASE

FOR IMMEDIATE RELEASE

WALK FREE:  Local activist to walk 500 miles for global slavery and human trafficking

Worcester, Massachusetts – September 1, 2016 – On Oct. 15, Robin P. Currie of Worcester, Massachusetts will undertake a 500-mile journey on foot from Portland, Maine to Washington, D.C. to provide information and raise awareness about human trafficking.

“Once people begin to understand the problem,” Currie said, “then we can begin, as a nation, to create the solution.”

It is estimated there are currently more than 20 million people globally who are victims of human trafficking and slavery.  Sixty-eight percent of these people are trapped in forced labor, 26 percent are children, and 55 percent are women and girls.

In 2015, an estimated 1 of 5 endangered runaways reported to the National Center for Missing and Exploited Children were likely child sex trafficking victims.

Currie leads the Central Massachusetts Coalition to End Human Trafficking.  Partners for WALK FREE include Currie Management Consultants, Inc. and Women In Action, Inc., both of Worcester.

For more information on WALK FREE, visit Facebook at https://www.facebook.com/CMCEHT/  To donate, visit the Facebook page and click the donate button on the cover photo, or send all checks, payable to: The Currie Charitable Fund, to 292 Lincoln St., Worcester, MA  01605.

Contact Robin Currie at 781-223-6347 or email rpcurrie@gmail.com with any questions.

Currie Team supports the fight against human trafficking

Just giving everyone an update on the latest Currie community service project!  In October, I will be walking from Portland Maine to Washington DC (over 500 miles) to raise awareness about domestic and global slavery and human trafficking.  Follow the action by liking my page (below).  The Currie Team is committed to this fight!

4 Ways to Join the WALK FREE Team

  1. Walk with me! – 1 mile, 10 miles, or more. Meet up with me for a visit, or accompany me with your vehicle.  These are all great ways to participate,
  2. Tell everyone! – That’s the whole point! This project is a way for me to continue to educate people about the issue and let everyone know what they can do to help.  And believe me, this is something we ALL need to address, each and every business and citizen.
  3. Connect me! Who do you know that lives or works along my route?  I will be looking for places to stay and people to help support me and show that they care.  Do you have friends or relatives that are interested in meeting up with me to help and learn more?  It would be a great part of my stories that I am collecting along the way.
  4. Give! – I will be in need of funding for lodging and supplies along the way. I’m estimating that this will cost about $100-$150 per day.  Please consider donating some cash for me to use, or send me some Visa or Mastercard Gift Cards, or Dick’s Sporting Goods (I am buying sneakers there!).

https://www.facebook.com/CMCEHT/

(to help fund this event, click the Donate button on the cover photo at the page listed above)

Currie Focuses on Service – Part 2

As promised, here’s the second piece of the two-part article that Bob wrote about Service Department metrics and profitability.

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For a complete immersion into the best practices of service department management, according to The Currie Model, we recommend attending our two-day seminar, Achieving Service Profitability in an Equipment Dealership on November 7-8, 2016. Registration is open for this program, which will be held at The Currie Training Center, here in Massachusetts.

Feel free to call or email Robin Currie, Director of The Currie Training Center if you have any questions!

 

Currie Focuses on Service

Here’s a piece that Bob wrote a while back.  He dives into critical measures that will assist you in boosting your Service Department’s net profit.  In today’s marketplace, the Service Department is the leading profit center and this article contains helpful information for this, and all Aftermarket Departments.  Aftermarket Managers, Branch Managers, General Managers and Executives should use this information to  evaluate and improve your Aftermarket Departments today.  Now is the time to review and renew. Need additional training?  Come on over to The Currie Training Center’s Service Profitability Program, November 7-8, 2016.  Register here: Achieving Service Profitability.

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Download Part 1, Service Metrics, of a 2-Part article series.  Part 2 will be posted soon!  Subscribe to our feed for the next article and other updates!

Assertive Communication (#2 in a series)

“To know oneself, one should assert oneself.” This is an interesting quote from 20th Century French philosopher and novelist Albert Camus, a winner of the Nobel Peace Prize for Literature. Camus reportedly would not call himself an existentialist, but his followers labelled him as one, mostly because of ambiguous and deeply abstruse statements and quotes such as that one. Let’s take a closer look at Assertiveness and the concept of assertive communication: what does it mean for professionals, and what do other experts have to say about it?

Dorland’s Medical Dictionary defines assertiveness as a form of behavior characterized by a confident declaration or affirmation of a statement without need of proof; this affirms the person’s rights or point of view without either aggressively threatening the rights of another (assuming a position of dominance) or submissively permitting another to ignore or deny one’s rights or point of view.

According to the Mayo Clinic, a top U.S. hospital located in Rochester Minnesota, Assertiveness can help you control stress and anger, and can also contribute to improved coping skills. An informative article on the Mayo Clinic website makes two sets of important contrasts concerning behaviors: Assertive/Passive Behavior, and Assertive/Aggressive Behavior.

Assertive vs. passive behavior
If your style is passive, you may seem to be shy or overly easygoing. You may routinely say things such as, “I’ll just go with whatever the group decides.” You tend to avoid conflict. Why is that a problem? Because the message you’re sending is that your thoughts and feelings aren’t as important as those of other people. In essence, when you’re too passive, you give others the license to disregard your wants and needs.

Assertive vs. aggressive behavior
Now consider the flip side. If your style is aggressive, you may come across as a bully who disregards the needs, feelings and opinions of others. You may appear self-righteous or superior. Very aggressive people humiliate and intimidate others and may even be physically threatening.

More of this information can be found here, on the Mayo Clinic website.

An assertive personality is something that many people (but not all) are born with.  For those lucky individuals, assertiveness is natural. For others, it is not so natural.  However, the good news is that assertiveness is a behavior which can be learned. Naturally assertive people and their approaches can and should be studied, thus enabling those who are naturally aggressive, passive, or some combination of these factors, to learn. When naturally assertive people are modelling the way, here’s what we will find:

• They have a healthy level of self-esteem.
• Assertive people feel empowered.
• They feel free to express their feelings, thoughts, and desires.
• They are also able to initiate and maintain relaxed relationships with others.
• They understand their rights, and the rights of others.
• They have control over their anger, and other strong emotions. This does not mean that they do not experience these emotions, but it means that they are able to effectively manage them, and talk about them in a productive manner.
• Assertive people have been found to be comfortably and reasonably accommodating, and willing to compromise with others.
• They are proactive rather than reactive.
• Are able to resist non-assertive forms of communication that are meant to intimidate or manipulate.

Now let’s talk about Assertive Communication. Currie Management Consultants, Inc. is a fan of Dr. Jon Warner and his work entitled Assertiveness Style Profile. Once again Warner gives us an interesting analysis, and remarkable labels for four very specific communication styles:

1. Firmly Asserting
2. Passively Observing
3. Warmly Proposing
4. Aggressively Controlling

By utilizing Dr. Warner’s Profile, we learn about a great variety of degrees of assertiveness. The four categories described above are detailed, and also combined with other factors such as level of energy and level of empathy. Assessment results can now be plotted and analyzed according to all of the factors mentioned. And Dr. Warner also provides strategies to move toward enhanced assertive communication. Below is the chart that Warner has created to assess and analyze individual assertiveness styles.

Assertive Comminucation grid

An added bonus that Warner gives us is information about body language, and how it relates to each individual assertiveness style. It’s important to note that Dr. Warner’s Assertiveness Style Profile has no right or wrong answers—it simply analyzes and describes each person’s own unique style based upon their honest responses to a series of statements. Finally, Warner describes assertiveness as “getting what you want from others without infringing upon their rights”. Sounds like a win-win!
Looking at some other viewpoints, we find that assertiveness in business is a critical skill. John Folkman, a contributor for Forbes, lets us know just how important effective assertiveness is for a leader. In his article The 6 Secrets of Successfully Assertive Leaders, Mr. Folkman describes the outcome of a survey where assertiveness was ranked against good judgement. Here are the surprising results:

“Leaders who were rated high (in the 75th percentile) as having good judgment but lower on assertiveness had only a 4.2% chance of being highly rated as an effective leader.

On the other hand, leaders who ranked high on assertiveness but lower on good judgment had a 12.5% chance. However, leaders who ranked high in both characteristics had an actual 71% change of being rated as one of the best leaders.”

The article then takes us through “The 6 Secrets”, which are provided, in brief, below:

1. Connect and Communicate with everyone.
2. Give honest feedback in a helpful way.
3. Use good judgement to make decisions.
4. Walk your talk.
5. Maintain excellent relationships.
6. Look for opportunities to collaborate.

Read the full article for further details about John Folkman’s take on assertiveness and its importance to managers, CEOs and other influential people.

Finally, for further development, Currie Management Consultants, Inc. recommends the book, Managing Assertively, by Madelyn Burley-Allen. Burley-Allen’s work delves into assertiveness and assertive communication, and also helps the reader to vastly improve his or her “people skills” using her eight building blocks method to become a more effective manager.

There is a plethora of information available on assertiveness, developing assertive communication, and enhancing communication skills. These are invaluable tools for all people, whether in business, family life, volunteering, or parenting. For those looking for some further instruction, The Currie Training Center offers a two-day seminar called Building Effective Leadership and Management Skills. In this interactive program, participants will learn the following:

Segment #1
Executive behaviors
Emotional Intelligence. Participants will be able to identify their strengths and challenges as leaders.
Assertive Communication: Review of Assertiveness and/or Communication Effectiveness and the individual assessments of the participants

Segment #2
Review of the Myers-Briggs Type Indicator and the individual assessments of the participants

Segment #3
Problem Solving & Decision Making
Situational Leadership
Team Building

Segment #4
Time Management
Team Building Exercise

Register for this program online by clicking here, or call us at 508-752-9229.

2016 Recipient of the Robert P. Currie Scholarship

Congratulations to Peter Bilzerian of Holden, Massachusetts.  Peter is 18 years old and will be attending The Rochester Institute of Technology.  This dynamic young man has an impressive list of successful endeavors.  On top of numerous academic awards and holding office as class treasurer, Mr. Bilzerian has worked as a business developer for local restaurants, and is an accomplished entrepreneur in the video gaming industry.

Much of his work to date is included in a recent article in The Holden Landmark.  In addition, Peter submitted a superb essay, which is posted in Surety Bonds Insider.  This piece (which is available here) describes, in his own words, Mr. Bilzerian’s journey, which began with a battle against childhood cancer.  He has skillfully chronicled a number of circumstances which, when met with his drive and determination, became victories that have propelled him to where he is now.  The journey is nowhere near over for Peter Bilzerian, and the Currie team will be following this maverick and his work for years to come.  Way to go Peter!

Follow Peter Bilzerian on Twitter @PeteBilzerian and on Facebook https://www.facebook.com/pbilzerian

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Peter Bilzerian