Creating a sustainable work environment where employees feel engaged, loyal and satisfied should be the goal of every organization. After all, if people dislike their workplace, they’re going to be unproductive at best and perhaps even quit, taking their skills and knowledge with them — leaving you with the high cost of finding replacements. The value of an employee who looks forward to going to work versus one who doesn’t result in a 10% increase in customer satisfaction. It should be well known by now that the long and involved process of recruiting, interviewing, selecting and training ends up being rather expensive. It also brings the unpleasant side effect of lost production, not just because no one is doing the work once performed by the employee who left, but also because the new hire is drawing labor resources away from other tasks.
In the hope of improving engagement and productivity through talent alignment and development, many conversations have been had, presentations and seminars delivered and literal and digital ink spilled. Throughout this discourse, the terms organizational culture and organizational climate get thrown around a lot, often interchangeably. However, they’re not the same thing, and the difference is important.
Defining Organizational Culture
Organizational culture is your identity as a company. It’s your values and the norms that have arisen organically over time.
Common Values Include:
- Competitiveness – Embracing the desire to be more successful
- Quality – Assessing accuracy and logically thinking over situations and problems
- Innovation – Risk-taking and introducing new ideas
- Outcome Orientation – Focusing on overall results and achievements
- Stability – Having a sense of security
A traditional bank, for example, is by necessity a structured environment, as the banking industry is heavily regulated by well-established laws. Banking is an old industry, which suggests the culture has had a long time to develop and is firmly ensconced. It follows that you’d probably find a culture where people are expected to follow proper channels and defer to the chain of command — where being too “entrepreneurial” in your methods and practices (i.e., making it up as you go) would be frowned upon and where staff members present a calm, courteous face to the customer so as to convey trust and reliability.
On the other hand, a tech start-up is likely to be more collaborative and unstructured. Disruptive conflict and ideas might be welcome. Everyone from the company president to the newest intern may communicate laterally and casually.
Every organization is different, and while these examples might seem like they’re taken from a TV show representation rather than real life if you’ve had jobs in more than two industries, you know first-hand that cultural norms vary widely from one industry to the next.
Defining Organizational Climate
Organizational climate deals with how people are experiencing the work environment at any given moment. What is it like to work there and to operate in that culture? How are business conditions and management decisions and actions affecting the general mood? When you consider the collective experience of all the talent in the organization, you’re evaluating climate.
Revenue swings, for example, can affect climate without changing the culture. If you work for a freight-transport company built around a culture of process and efficiency, and then revenue drops, you’d probably double down on improving processes and efficiencies; you’re not likely to abandon them. At the same time, employees might feel resentful or despondent that their bonuses were canceled and a couple of their friends were laid off. The culture stayed the same, but the climate changed.
Another way of looking at it: When people aren’t going to fit the culture, it’s usually obvious right from the interview. They might not get a job offer in the first place, and, even if they do, they are unlikely to stick around long because they will feel like outcasts or be miserable. If the climate is troubled, people who do fit the culture and would ordinarily be engaged and satisfied may become unproductive or quit.
This distinction is important because problems with culture and problems with climate are resolved with different solutions.
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Issues That Arise With Organizational Culture
Problems of organizational culture arise when the existing culture is detrimental to achieving business goals or realizing the organization’s ideal state. For example, a tech company where the culture is collegial, collaborative and academic — and where people who exhibit aggressive, autonomous or competitive behaviors are marginalized — may be an engaging place for easygoing managers and low-key product engineers to work. However, the tech world is highly competitive and disruptive. This organization could find itself falling behind in its industry niche as edgier, leaner, more venturesome start-ups hit the scene. Perhaps it would be time to change the culture.
In this scenario, the company may consider a People Analytics solution to identify the talent gaps and spot high-potential employees as candidates for more responsibility and development. Furthermore, they could use pre-employment assessment tools to select outside applicants who demonstrate a motivation to innovate, drive change and provide more demanding leadership.
Other Drawbacks to Organizational Culture:
- Reaction time to internal and external changes is slow; systems are made for stability
- Many structural parts reduce the effectiveness of communication
- Failure is more focused on than success
- Issues take too long to solve and tend to repeat
- The organization doesn’t perform as well as it should
Problems of Organizational Climate
Problems of organizational climate arise when you’re not paying attention. At companies that seem relatively healthy, management tends to chug along and maintain the status quo. However, many organizations are vulnerable to slowly escalating problems because they aren’t tuned in to the daily experience out on the shop floor, in the field or at the corporate office. It could be a problem with communication and messaging, general dissatisfaction with leadership decision making or structural/procedural flaws that are fomenting frustration and harming engagement and satisfaction. Somehow, a malaise is settling over the organization, and declines in productivity, employee retention and market share will probably follow.
It’s a good idea for business leaders to keep a finger on the pulse of the organization, so to speak, and not allow themselves to be blindsided. Employee surveys are a good way to get a broad sense of staff members’ prevailing thoughts, and survey results can serve as a springboard for programs around improved transparency, greater collaboration, better alignment of talent or greater potential to address business concerns.
Employee surveys can address a number of different areas, all answers/results providing a clearer picture of how motivated employees are. Areas the survey may cover are:
- Individual feelings and beliefs
- Company and leadership
- Equipment and support
- Management and team
By taking steps to ensure a positive culture and a healthy climate, management can both move the company forward and perform the preventative maintenance needed to maximize business results.
Caliper has the tools and expertise to identify and correct problems of culture and climate within your organization. Contact us today and tell us about your ideal future state. We’ll help you get there.