Perhaps the simplest definition of organisational culture is this: the shared values and beliefs that guide how members of an organisation approach their work and interact with each other. Or more informally as “how things are done around here”.
For a Board or senior management, the challenge is that values and beliefs of an organisation are difficult to identify or measure, let alone change. There is every chance an organisation’s culture will develop organically from the bottom-up rather than stemming from management intent. As we have seen in many corporate disasters around the world, organisational culture can also be the ultimate villain in causing many scandals and financial catastrophes.
Cultures are nurtured and influenced more than they are created by edict, but Boards and management teams can best lead the development of their organisation’s culture by considering the following activities:
- Define culture that is realistic and rooted in the nature of the organisation
- Describe tangible examples for the culture that relate to the organisation’s activities
- Align pay, promotion and performance management systems to the culture
- Align formal discipline and informal correction mechanisms to the culture
- Assess and monitor the culture in a practical way.