Wednesday, May 29, 2024

Is it time to reflect on the culture of your organisation? By James Pinchbeck, partner at Streets Chartered Accountants

James Pinchbeck, partner at Streets Chartered Accountants, considers the importance of a business’s culture.

Having been involved in recruitment interviews recently, in which seemingly all applicants asked what the culture of the organisation was like, it did give rise to reflection on the same and what is meant by culture and how it affects the success or otherwise of an organisation.

Organisational culture refers to the collective beliefs, values, attitudes and behaviours that define the unique identity and character of an entity. It’s the intangible fabric that shapes how employees interact, make decisions, and perceive their roles within the organisation. Essentially, it is the personality of a business.

Manifestations of organisational culture are evident in various aspects of workplace dynamics. This includes communication styles, leadership approaches, decision-making processes, employee relationships, dress code, workspace layout and even organisational rituals and traditions. These elements collectively reflect the underlying norms and values embraced by the organisation.

Describing the culture of an organisation can vary depending on its unique characteristics and values. It could be described as collaborative, customer-centric, results-oriented, hierarchical, innovative, inclusive or bureaucratic, among others.

The impact of organisational culture on business performance is profound. A strong, positive culture can foster employee engagement, productivity, innovation and loyalty, leading to better customer satisfaction and overall business success. Conversely, a toxic culture marked by distrust, micromanagement, favouritism, resistance to change, fear or lack of transparency can hinder employee morale, creativity and collaboration, ultimately impeding organisational effectiveness and growth.

Organisational culture is particularly important for new employees as it shapes their onboarding experience, integration into the company and long-term engagement and satisfaction. A positive culture can facilitate smoother transitions and help new hires align with company values and expectations.

Assessing organisational culture involves analysing various factors such as employee attitudes and behaviours, management practices, communication patterns and alignment with organisational values and goals.

While leadership plays a crucial role in setting the tone and direction of organisational culture, every individual contributes to its formation and evolution. However, senior executives and managers bear primary responsibility for shaping and nurturing a positive culture through their actions, decisions and reinforcement of desired behaviours.

People seek to change organisational culture for various reasons, including adapting to external market forces, addressing internal issues or inefficiencies, fostering innovation and agility or enhancing employee well-being and satisfaction.

Changing organisational culture is a complex and challenging process that requires commitment, patience and strategic planning. It typically involves identifying areas for improvement, engaging employees in the change process, providing training and support and implementing new policies and initiatives aligned with the desired cultural shift.

Current trends in organisational culture include a greater emphasis on more flexible and remote work policies and virtual collaboration tools, fostering diversity, equity and inclusion initiatives, promoting employee well-being and mental health support and adapting to rapid technological advancements and market disruptions.

In conclusion, organisational culture is a vital aspect of any business, influencing its performance, employee satisfaction and long-term success. Understanding, assessing and shaping culture requires proactive efforts from leaders and employees alike, with a focus on fostering a positive and inclusive work environment conducive to innovation, collaboration, and growth.

 

See this column in the April issue of East Midlands Business Link Magazine here.

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