The OC (Organizational Culture) Equation

V + P x Actions = OC [Competitive Advantage and Profitability]

Over the past several weeks we’ve discussed the relationship between a strong organizational culture (OC) and an organization’s health and profitability. As previously noted, OC is born out of your organization’s DNA – it defines who you are as a company; and encompasses the shared values, beliefs, symbols, and behaviors of your organization – in other words, it’s how things get done. An organization’s culture guides both individual and team decisions and actions at an unconscious level. And these actions can have a dramatic effect on your company’s well-being and success or lack thereof.

While on an emotional level most employees understand that every organization (be it a business, a department, a charity, a boy scout troop, a civic organization or any other grouping of people) has unwritten norms for how things get done, very few can begin to explain how the OC is created and maintained. But they know it when they “see” or “feel” it.

For example, while in a client meeting yesterday discussing total compensation statements, a young lady spoke up about the intangible value of a strong OC. She stated that she previously worked 60-70 hours per week for a big company with deep pockets that afforded her many opportunities to work on interesting projects. Then when she came to her current, much smaller company they were really “happy”. As she explained it, here the values and philosophies and “culture” aren’t just posted on the wall – they really live them – employees are actually happy to be here. And that’s the power of your OC. Are your employees genuinely happy to be in your workplace and thus go above and beyond to take care of your customers and create your sustained competitive advantage?

Your OC (whether good or bad) is defined by the following equation:

V + P x Actions = OC [Competitive Advantage and Profitability]

Where:

V = Values – The non-negotiable beliefs and principles of an organization. An organization’s values dictate decisions and behaviors and are that the heart of the OC.

P = Philosophies – An organization’s philosophies are the embodiment of its values. In other words it’s how the values are intended to be demonstrated or “lived” by every employee every day.

Actions = what gets rewarded and reinforced – not what you would like to get rewarded and reinforced, but what REALLY gets rewarded and reinforced. Do the actions of your workplace enhance or destroy the credibility of your stated values and philosophies? Zappos has created an incredible culture they’re so committed to, they actually offer new employees a bonus to leave the company to protect it.

OC = Organizational Culture – how things get done around here. And this is where your true competitive advantage lies because your competition can’t duplicate your OC.

As a leader, your greatest contribution to your organization or team is to identify the elements needed for a strong OC and then creating the conditions where it can thrive and “live” through employee actions.

Does your workplace have an accidental or intentional OC? Do leader’s “get it”? We’d love to get your take on the OC equation and hear your “war” stories.

 

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