In our last blog post, I explained what is meant by Organizational Culture and how to successfully approach Organizational Culture initiatives. In this post, we will explore a specific type of Organizational Culture, values-based organizational culture.
Values-based organizational culture is the desired type of organizational culture. It is a culture in which successful leaders’ practice by modeling the behaviours that create that desired organizational culture. For example, as shared by expert Richard Barrett, “values-driven cultures are typically consciously created … the leader and the leadership team actively live the values of the organization” Taking organizational culture from a different perspective, Patrick Lencioni stated that “an organization has integrity – when it is whole, consistent, and complete, that is, when its management, operations, strategy, and culture fit together and make sense”. This means that health is about the organization being in integrity with its values and demonstration of those values. Integrity is achieved when the leaders walk their talk in relation to their own, and the organization’s espoused values as well as through the creation of aligned organizational systems.
Both experts speak to values as a fundamental components in understanding an organization’s culture. Practiced values are observed through measurement and/or observation of actual behaviours. Changing organizational culture then requires behavioural change demonstrating the practice of desired values.
Why Is Values-Based Organizational Culture Important?
There are many reasons for organizations to consider a VBOC initiative. The purpose of any program is the basis of the impetus for and sustainability of a refined approach. It is important to understand what the purpose of the initiative is for a potential client and educate them about how VBOC can support them in achieving that objective.
There are clear reasons for focusing on values-based organizational cultures. The reasons stem from the organizational pain points at any given time often related to growth, high turnover, distraction by trendy solutions, silos, and ambiguity. As I learned from interviews with seven leaders in customer-centric organizations in 2017, there were succinct reasons for the need for focus, alignment and clarity to stay relevant.
As shared, by another expert Kuppler: “Culture is critical with societal trends for speed and efficiency because complexity is growing.” Similarly, Richard Barrett shared that “it is becoming increasingly clear, that to succeed in the twenty-first century individually as a professional, or collectively as an organization, you need to differentiate yourself not by what you do, but by who you are and how you do what you do.” Taking this further, many other practitioner-researchers have found correlations between organizational culture and relationships within and outside of organizations. Additionally, as Eyl found. “an exceptional customer experience requires an exceptional organizational culture.” Without relationships based on how we do what we do, the bottom line of the business is impacted.
Organizational values are exemplified through team member behaviours. Team members need to feel aligned with the organizational values to act genuinely with stakeholders. From recruiting and employee engagement perspectives, “more people than ever want to be involved and consulted in choosing the values that are used in governing their personal and professional lives” (Barrett). This speaks to values as a way to create a competitive advantage in attracting desired team members.
Macro trends in the economy impact organizational culture as well. A current example is the trend to a focus on Knowledge Management with the use of the internet and digital forms of information. Alavi (2000) shared that “as the economy shifts from the post-industrial era, intangible assets (such as knowledge) gain importance over more traditional resources (e.g., land and capital) in organizations” (Mohammadi, Khanlari, & Shorabi, 2009, p. 1714). These types of trends require shifts in values and behaviours to embrace change and diversity.
For bottom-line focused leaders, there are studies that point to the financial performance of organizations of values-based organizational cultures. “Not only did the stocks of the top companies to work for significantly outperform the S&P 500 over this ten-year period, they also showed considerably more resilience in regaining their value after the global economic meltdown of 2008” (Barrett, 2017, pp. 21-23). According to Gallup (2008), “increasing employee engagement correlates directly with a positive impact in key business metrics”. Organizations with values-based organizational cultures outperform organizations without it.
Finally, “an organization’s strategy is determined by culture … the key to strategy and strategic change is linking the possibility with who we really are culturally” (Kuppler). Strategy is how a company plans to get from Point A to Point B. How an organization achieves goals is through the enactment of behaviours based on values.
What Can Values-Based Organizational Culture (VBOC) Do For You and Your Organization?
There are many reasons to consider being intentional in developing a VBOC. VBOCs can:
- create a competitive advantage,
- support recruiting and reduce employee turnover,
- aid flexibility,
- improve adaptation to macro-trends,
- increase profitability, and
- inform strategy.
Each of these on its own may be compelling. What piques your curiosity? I would love to hear from you to explore this with you in a complimentary 20-minute call. Email me at email@example.com for a discovery conversation.
Barrett, R. (2017). The values-driven organization: unleashing human potential for performance and profit (2nd ed.). New York, NY: Routledge.
Beugelsdijk, S., Koen, C., & Noorderhaven, N. (2006). Organizational culture and relationship skills. Organization Studies, 27(6), 833-854. https://journals.sagepub.com/doi/abs/10.1177/0170840606064099
Büschgens, T., Bausch, A., & Balkin, D. (2013). Organizational culture and innovation: A meta-Analytic review. Journal of Product Innovation Management, 30(4), 763-781. https://onlinelibrary.wiley.com/doi/10.1111/jpim.12021
Hull, K. (2017, July 11). To drive culture change, identify a critical few behaviours. Retrieved February 5, 2018, from http://www.cultureuniversity.com/drive-culture-change-identify-critical-few-behaviors/
Eyl, E. (2014). Build a culture your customer will love. Retrieved September 29, 2019 from https://www.humansynergistics.com/blog/culture-university/details/culture-university/2014/05/05/build-a-culture-your-customers-will-love
Kuppler, T. (2017, June 14). Closing the massive gaps between culture awareness, education, and action. Retrieved February 5, 2018, from http://www.cultureuniversity.com/closing-massive-gaps-between-culture-awareness-education-action/
Kuppler, T. (2016, January 14). 20 organizational culture change insights from Edgar Schein. Retrieved February 5, 2018, from http://www.cultureuniversity.com/20-organizational-culture-change-insights-from-edgar-schein/
Lencioni, P. (2012). The advantage: Why organizational health trumps everything else in business. San Francisco, CA: Jossey-Bass.
Schein, E. (2017). Organizational culture and leadership (Fifth ed.). Hoboken, NJ: Wiley.