What Is Organizational Culture?
Although the language of culture is used frequently, organizational members do not always understand what is meant by the term “organizational culture.”
In his classic book on the subject (Organizational Culture and Leadership), Edgar Schein summarizes organizational culture as the accumulated shared learning of a give group. This shared learning is observed through a variety of organizational realities such as the way people behave, established group norms, and espoused values.
Culture is essentially the organizational air we breathe. Like air, culture is often not seen directly. Rather, it is seen indirectly through how organizational members engage in their work, how they behave, how they embody group norms, and how they live out espoused values.
Why Does Organizational Culture Matter?
Other authors, such as Patrick Lencioni in The Advantage, highlight the vital dimension of culture.
Lencioni argues that organizational health is the greatest opportunity for organizational improvement and competitive advantage. In contrast to what Lencioni refers to as smart business—engaging fundamentals like strategy, marketing, finance, and technology—organizational health is the real place where competitive advantage may shine beyond the first half of the equation of smart business.
These days, especially in the day and age of big data in business, being smart as a organization is not enough. Organizations also need to be healthy—they need to pay attention to their organizational culture.
“Culture Eats Strategy for Breakfast”
Expressing Lencioni’s points another way, Peter Drucker put the essence of culture in the following language: “Culture Eats Strategy for Breakfast.”
- Does strategy (smart organizational practice) matter? Absolutely!
- Is strategy (smart organizational practice) enough? No!
- Therefore, what do organizational leaders need to do? Leaders must focus on both smart strategy AND healthy culture
Smart and Healthy
As you think about your organization, are you leading and managing in a way that encourages both smart organizational practice AND healthy organizational culture? What practical steps can you take in the coming weeks to help improve the culture of your organization, division, or team?
For those interested in reading more on the priority of organizational culture, see the following post entitled: Organizational Culture vs. Organizational Identity