Building an Organizational Culture

One extremely important part of starting a new business the area of organizational culture. Often, someone starting a new business will either think that the cultural organization of a nascent business is not that important or, if it is important, it can be attended to later after the enterprise is established. Be warned: neither of these are true.

Organizational culture (OC) is critical to any operation and once established, is very difficult to change. Be proactive in creating an outstanding OC from inception and work doggedly to maintain the same high quality of OC as the company develops.

What Is Organizational Culture?

OC is the structure of mutually shared assumptions, values, beliefs that control how people behave in a company. Roger Connors and Tom Smith say this:  “Every group of people, from a street gang to a church choir, from a family to a nation, has a culture. If the group's leaders have not created it, perhaps some informal leaders or "influencers" have...Every organization has a culture. The only question is whether or not that specific culture is effective in creating the results those people want.”

Your business will have an OC that controls how people who work for you will act. It is critical that this culture is deliberate and useful to accomplishing what you want to do.

Why is it Important to Control Your Organizational Culture?

We hinted at this above, but let’s be more specific on why OC is so important.

  • Fewer than 10% of all US companies today have a clearly defined set of core values and behaviors.
  • Either you will manage your OC or it will manage you.
  • Poor OC leads to dissatisfied employees. This leads to up to a 40% failure rate for expatriate employees. That is, they quit and go home early.
  • Poor OC means less worker productivity. Many studies have shown this to be true.
  • It is estimated that US companies lose $450 billion a year from lost productivity attributed to employee dissatisfaction.
  • Good OC equals employee satisfaction.
  • Good OC is a competitive advantage for any company.

What Can I do to Build a Great Organizational Culture?

These are some things that you can do to build a great OC.

  • You must take responsibility for creating and controlling great OC.
  • Understand that it will require buy-in from every leader in the organization.
  • Clearly communicate expectations.
  • Create experiences every day that help build the OC you want.
  • Motivate employees with gain.

You cannot afford to let your OC be formed and shaped by accident. Think through what you want for your organizational culture carefully and create a great company culture from the beginning of your enterprise. You will not be sorry.