Organisational culture is tricky to pin down. There are lots of definitions, but this one by Needle (2004) is a good summary:
With any definition, there’s an exhaustive (and exhausting!) set of questions to measure it. For us, there are 4 key parts to it: governance, enablement, agility and visibility.
Within each of these areas we look specifically at:
The definitions can always be argued, but we know that when organisations perform well against these factors, it produces higher growth, profitability and customer satisfaction. That’s how we know that a strong culture, as defined in this way, is crucially important to organisational success.
Culture, and its unspoken complexities, becomes extremely evident during mergers and acquisitions. Harvard Business Review (HBR) recently wrote about the merger between Amazon and Whole Foods failing to run smoothly due to a clash between ‘tight’ and ‘loose’ cultures.
It concluded that significant mismatches in cultures contributed to a net income plummet of circa $600 million dollars. Though the stakes may be lower for smaller organisations, the message is clear – ignore the importance of cultural differences at your peril.
In our recent work with two merging organisations in the Intellectual Property space, we saw the problems in culture differences, which helped us work towards a successful merger. We asked both organisations to assess their organisations using our QlearFit model – a survey measuring 16 dimensions of an organisation. The biggest differences in scores were in culture. It seems that these are the elements which make two seemingly similar organisations very different in the day-to-day running of the businesses.
In particular, our work highlighted the difference between older and newer organisations, with one mid-size organisation established in the 60s, and the other in the early noughties with less than 500 employees. Perhaps unsurprisingly, the younger organisation scored an average of 12.5% higher in all 4 areas, with a particular advantage in inclusion – the extent to which employees feel included and respected for who they are at work.
As a result, it showed the new organisation how to understand the strengths and weaknesses of the two legacy organisations. It gave us an easy way to begin to explore how to build a new, unified positive culture and find a simple starting point in what might usually be a minefield of complex, drawn-out cultural discovery.
Find out more about how we can help with Organisational Fitness in your business.