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By Gerald Taylor, Managing Director TPMG
We have heard many definitions for corporate culture. Some academics take an anthropological perspective defining corporate culture as a system of company values, beliefs, norms and customs. Anthropologists believe it is culture that shapes the identity of society. They conclude culture determines how members of the society dress, what they eat, how they worship and overall how they govern themselves. By the same token, business cultures shape the identity of a corporation. It determines how company employees work, how they set priorities and accomplish goals. In effect, corporate culture is the day to day climate that absolutely plays the dominant role in determining the success of the firm. But what is a high performance culture?
At TPMG Consulting we define a high performance culture quite simply as:
The collective and consistent individual decisions and organizational practices that systematically pursue and obtain higher levels of individual and overall productivity. In effect, a high performance culture is one of success. It is the collection of decisions made and actions taken which deliver improvements in results and value. Based on TPMG analytics, in companies with high performing cultures there exists an intense, almost religious focus on four key organizational functions:
- Service: there is a fanatical commitment to meeting the needs, attitudes and perceptions of customers.
- Workforce Engagement: The terms and conditions upon which people and functions relate are very well defined and integrated.
- Performance Analysis: Leaders review, analyze, share and improve performance using data and analytics.
- Leadership: Management creates and maintains formalized methods and practices that promote and reinforce measurable improvement.
We recognize that not all decisions made and actions taken improved results. Like a genome, high performance cultures can be both dominant and recessive. This means a high performance cultures literally exist on a continuum within an organization.
Why does a High Performance Culture Matter?
Before getting into the mechanics of cultivating a winning culture, it is important for all senior leaders to first understand the benefits of a High Performance Culture.
A recent Gallup study uncovered several insights. They concluded high performance cultures inspire high commitment from employees. Their study revealed that companies with a favorable culture attracted and retained talented employees at a measurably higher rate and their employees were more easily inspired to consistently deliver on their organization’s value proposition. Favorable cultures improve performance. Among US healthcare systems, when 8 in 10 of their employees feel connected to their organization’s mission and purpose, they realize a 41% reduction in absenteeism, a 50% drop in patient safety incidents and a 33% improvement in quality. According to a McKinsey & Company study (2013), a favorable culture is a key predictor of revenue, profits, costs and quality of customer service. The bottom line is……employees and teams who most align with their organization’s culture consistently perform higher on internal performance metrics than those who least align.
The Leadership Challenge: Culture Eats Strategy for Lunch!
We all know how it goes…. At the beginning of the fiscal year, senior leaders convene off-site meetings. The goal is to set the stage so the accomplishments for the coming year will out perform prior year’s results. They reflect on organizational performance and most always believe they can achieve more.
For the most part, leaders know their business, their competition and are experienced enough at formulating a winning strategy. Every year they go big and expect things will be different……but the results usually end up falling short of expectation. What continually frustrates them is their company culture. No matter how much they plan, put together policies, or how many consultants they engage…..their day to day climate limits their potential. The one true lesson in both business and government is – culture eats strategy for lunch! This subject is what the coming series of articles is all about: How to Establish and Sustain a High Performance Culture.
In this series, we will provide real world examples of why high performance cultures matter. We will break down the organizational climate and discuss the mechanics of how cultures work and share with you the proven practices we have applied over the past 15 years.
If you would like the series delivered directly to you, feel free to contact us directly by clicking here!
Gerald is the Managing Director of TPMG’s Strategy and Operations Advisory Practice. His expertise includes senior leader advising, strategy and performance improvement.
In the first of his lectures for Saïd Business School, Clayton Christensen explains his theory of disruption, drawing on examples of innovations occurring in the steel industry and from leading companies such as Toyota, Sony, Walmart and Indian refrigerator manufacturer, Godrej. Christensen explores how the theory can explain why the economies of America, England and Japan have stagnated. He also uses the theory to analyse how economies in Asia have achieved prosperity and to examine why countries such as Mexico are not experiencing economic growth.