What is an organizational culture? According to “Management Concepts and Practices” by Dr Tim Hannagan, it is a collection of traditions, values, policies, beliefs and attitudes that shape the way individuals and the organization as a whole functions. Some of its influencers are language, religion, technology, education, legal environment and the overall social organization. In the 1976 work of Charles Handy, “Understanding Organizations” four groups of behaviors have been identified. Power Culture, where the power in the organization is dominated by a one charismatic figure or founder, Task culture, where the completion of jobs or projects are paramount, Person culture, wherein the organization is a means to the end of individual growth of employees and lastly role culture, where the organization is seen as a set of impersonal inter-related roles. Today we commonly refer to “open” cultures as a way of enhancing the employee experience and in this way having a positive impact on the performance of the whole organization, and a pertinent question is that if open cultures are a prerequisite today for companies to succeed?
So what really is an “open” culture? One of the important factors is transparency. This is the creation of an open dialogue between the management and the employees so that a culture of inclusiveness is bred. This is said to avoid narrow thinking, bring issues to the surface faster and to keep teams aligned to the company’s goals. Having managers as mentors, rather than task masters helps to turn the traditional organizational hierarchy upside down, with a bottom up approach. On the official Google website it says, “We strive to maintain the open culture often associated with startups, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions.” Google prides itself on its culture and attributes its success to it. Everybody performs their roles and it is rated as one of the best place to work in America and receives a similar ranking in many other countries in the world. On the other hand, one of the most successful and innovative companies, Apple, allegedly has a “closed” culture with a top down approach. Secrecy is of utmost importance and collaboration is only between teams working on one small piece of the puzzle, rather than with an overall view of the end goal. The fact that Apple is valued at $700 billion dollars goes to show that even a closed culture can lead a company to success. Another IT company recognized worldwide for its unique internal organization is HCL Technologies from India. HCL Technologies follows an inverted pyramid structure where the top management is accountable to the lower executive levels. Their emphasis on providing a fulfilling experience to their employees is so focussed that their motto is “employees first and customers second”! The idea is to boost employee involvement and respect, empowering them and encouraging them to create value. The result is a growth in the average revenue per employee, a tripling of its employee base, innovative ideas generated and an overall improved customer satisfaction.
Providing customers with a good quality product and service is no longer a factor for differentiating a company’s offering. A buzz is around about “experience economies”, where only the complete experience that a company provides to its customers is what creates a space for them in the mind and hearts of customers for a long time. It is difficult to find approaches that are truly unique and this is where the role of innovation comes in. Innovation, today, is no longer a luxury but a necessity to survive in the disruptive marketplace. This brings us to the question of how companies enable their employees to conduct their day to day activities as well as to set time aside to add value to the products and processes of organizations. What role does a company’s culture have to play in this and what is to be done when the company is large, well established and cumbersome in its structure? Does the flexibility and adaptability of startups and recent ventures have an upper hand in this regard? Some people profess that an open culture can induce innovative, but does this hold true for all types of companies?
In a Forbes article, Mike Steep, visiting scholar at Stanford writes, there are two popular innovation culture styles, that need to be willfully sustained by the companies that adopt them. The first is Formulaic cultures such as that followed by BMW. Their’s is a process oriented culture with a vision to innovate together. Departments work in sync with each other and innovation is a collective task. BMW’s leaders give as much thought into how people actually work as they do into precisely designing and making their cars. Many large organizations thats have innovation at the core of their vision follow this style. The second style he talks about is Entrepreneurial culture. One of their defining features, at least in their early days, is that they often feature a single, rogue innovator, a leader who is at the center of power and orchestrates the innovation. These kind of companies excel at disrupting the status quo and constantly attacking established companies with new technologies and ideas that were previously unthought of. They also tend to be more successful if the company is small and is a difficult model to replicate once a company is very large. The author also speaks of the drawback of such a style and that is the unhealthy dependance on one central innovator which can lead to suppression of valuable ideas, and such as in the case of Apple, a leadership vacuum once that central character is no longer there.
We have touched upon in the above paragraphs, at least one example from each of Handy’s four cultural styles. Apple’s power culture, Google’s role culture, BMW’s task culture and HCL’s person culture can each be considered an example. Each of these companies, in their own way are stalwarts of innovation, and as previously discussed, innovation is the key to success in today’s marketplace. This goes to show that there is no one culture that is right for an organization. In my view, the culture of a company should stem from its product offering and its vision to bring it to life. Culture should depend on the kind of tasks that is expected of the employees, the size of the organization and its core values. Innovation and change managers need to carefully scrutinize these before implementing any cultural changes in a long standing company and entrepreneurs should make intentional choices at the onset of the formation of the