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Culture and its Impact on Organizational Resilience

November 8, 2018

Author: Lynnda Nelson
President at ICOR

This month’s blog post explores the importance of understanding how an organization’s culture impacts its resilience.  This is part one of a two-part series on culture and part four in our continuing series on organizational resilience.

Culture serves four functions, including providing a sense of identity to members and promoting a sense of commitment.  Culture helps members of the organization attribute sense and meaning to organizational events.  Culture reinforces the values in the organization.  Culture serves as a control mechanism for shaping behavior.

Edgar Schein is most well-known for his groundbreaking work in the 1980’s on the topics of Organizational Culture, Learning, and Change at MIT Sloan School of Management.

This post references several of Edgar Schein’s most famous quotes as we explore culture and its impact on an organization’s resilience.  One important aspect to note is the difficulty separating the impact of the leadership of the organization from its culture.

“The only thing of real importance that leaders do is to create and manage culture.

If you do not manage culture, it manages you -  

and you may not even be aware of the extent to which this is happening.”

 

Leadership Reflecting on the Organization's Culture

 

“If you have been trying to make changes in how your organization works,

you need to find out how the existing culture aids or hinders you.”

 

There are 3 accepted “perspectives” on organizational culture:

  1. The strong culture theory says that deeply held and widely shared cultures perform best.  Research evidence provides modest support. 
  2. The fit perspective says the culture should fit the industry and the organization’s strategy.  Research evidence indicates that the fit perspective predicts only short-term performance. 
  3. The adaptive perspective says that flexible, responsive cultures lead to long-term performance.  Research evidence supports this perspective

 

An organization’s resilience is tied to its adaptive capacity and its ability to manage change while meeting its objectives.  An organization’s resilience therefore supports the adaptive perspective on culture. Let’s take a closer look at the characteristics of an adaptive culture.

An organization with an adaptive culture encourages confidence and risk taking.  Adaptive cultures have leaders who produce change while promoting long-term performance.  They have leaders who focus on meeting the changing needs of its stakeholders.

So how can organizations become more adaptive, more flexible, and more responsive?

The characteristic of encouraging risk taking is one that is not necessarily easy to implement or even practical for all organizations due to legal and regulatory compliance issues for example.  But all organizations can take a close look at how they look at risk. 

Do you value error reporting over blame?  More resilient organizations have processes in place to reward error discovery and reporting as part of continual improvement.

They have a preoccupation with failure.  They talk about what types of failures the organization should regard as detrimental in terms of safety or the organization’s performance.  This allows the organization to be more aware of potential incidents and identifying them when they are “small” and can be better managed.

This preoccupation with failure and valuing error reporting creates a culture where leaders push for more information about the causes of small failures to avoid them happening in the future as well the potential for these small failures to be a signal for bigger problems.

“We do not think and talk about what we see;

we see what we are able to think and talk about.”

Do you share knowledge throughout the organization?  More resilient organizations have systems in place to give those closest to operations a voice to share when / if aspects of their work are amiss.

This system of communication and sharing of knowledge assures that the organization is more responsive to potential issues that might arise and have more time to consider multiple responses.  It also provides for an environment that supports their “front-line” employees by empowering them to act in the best interest of the organization.

“We tend to think we can separate strategy from culture,

but we fail to notice that in most organizations strategic thinking is deeply coloured

by tacit assumptions about who they are and what their mission is.”

An organization’s culture can profoundly affect the ethical behavior of its employees.  Ethical behavior is good business.  Ethical behavior is directly tied to trust.  Empowerment requires trust between all levels of the organization.  Empowerment requires management to be willing to “let go” of traditional hierarchical notions of power.

Is your organization prepared to manage a crisis?  An organization’s culture impacts its ability to manage a crisis.  Successful crisis management has a lot to do with an organization’s corporate culture and the mindset it instils in its team members.

Is your organization prepared to manage a crisis?  An organization’s culture impacts its ability to manage a crisis.  Successful crisis management has a lot to do with an organization’s corporate culture and the mindset it instils in its team members.

Melissa Agnes, a leading authority on crisis preparedness, reputation management, and brand protection, has identified 6 characteristics of a healthy culture as it relates to crisis management:

  1. Make issues management an integral part of corporate culture
  2. Instill a mindset that instinctively finds the positive opportunities within negative incidents
  3. Focus on finding ways to build and strengthen trust with stakeholders
  4. Train and then empower employees to act fast in times of negative incidents
  5. Are prepared with a scalable and dynamic crisis preparedness program
  6. Embrace change, and be flexible and adaptable in continuing to find ways to meet stakeholders’ ever-expanding expectations

 

An organization’s crisis management plan is of limited use if it does not coincide with its philosophies, values, attitudes, assumptions, and norms. 

“In most organizational change efforts,

it is much easier to draw on the strengths of the culture

than to overcome the constraints by changing the culture.”

Is your culture a source of crisis?  If your organization’s culture is weak, it could undermine the effectiveness of your response to a crisis situation.  Does your culture allow it to react quickly to changing circumstances?

Roman Zuzak, author of Corporate Culture as a Source of Crisis in Companies, writes, “… in certain situations the corporate culture can lead directly to the launching of a crisis causal chain, which means that the original cause of the crisis starts off other unbalances, or it could deepen the unbalances occurring in another company subsystem and speed up the development of the crisis and make it more difficult or even impossible to pull the company out of the crisis.  

Symptoms:

  1. Absence of support in the area of company goals achievement and non-identification with these goals,
  2. Preference of personal interests and goals
  3. Problems in communication and cooperation with individuals, groups and organizational units
  4. Non-acceptance of colleagues as internal customers, emergence of conflicts, disputes and internal wars.
  5. Problems working in teams
  6. Interest in power -  development of cliques,
  7. Environment that does not promote creativity or innovation and not oriented towards customers and their needs,
  8. Intentional blocking of any changes whatsoever.

 

Organizations where the management deals with its culture, either systematically and purposefully or at least intuitively, are more successful in their business activity.   An organization’s culture is one of the major factors in achieving competitiveness and competitive advantage.

The next blog will dig deeper into the topic of culture and its impact on an organization’s resilience specifically related to surviving a crisis. For more information on organizational resilience view ICOR's Organizational Resilience Model.