Building Organizational Culture

I read Rhoades and Stephenson's book Built on Values as food for thought on organizational culture.   Jordi Canal's book on respected companies was the best book on corporate ethics I've encountered, which correlated the ethics of a commercial organization to the benefit it provides to its consumers, but it left me wanting a practical approach to effecting a positive culture, and my hope was that Rhoades and Stephenson would address that deficiency.

My sense is that it was successful in doing so, though only to a certain degree.  The authors suggest, and rightly so, there is no single corporate culture that can be transplanted into all organizations, but each has idiosyncrasies that determine the values that define its culture - and so it follows that each organization, such as it is, also requires a highly idiosyncratic method of achieving cultural improvement.   But at the same time, there are sufficient commonalities to discuss the matter in general ways that may be applicable, by various means, to a broad range of organizations.

The fundamental axioms on which the book rests are (1) the notion of organizational behavior is an abstract assessment that is merely an amalgam of the behavior of the people it comprises; and (2) people inside of organizations, particularly companies, generally do what they are given incentive to do.

That is to say that the formal documents that are often used to gauge a company's culture - its mission statement, vision statement, statement of values, annual report, and the like - are all largely aspirational.  They depict the organization as it wishes to be, or as it wishes to be perceived regardless of how it actually intends to behave.  Said another way, they are in effect marketing fluff that may have no resemblance to reality.

It's suggested that a highly effective way to peel back the veneer and see what's really underneath is to look to annual performance reviews of employees.  Here you will find what people are being encouraged to do and rewarded for doing.  As such, a company whose mission proclaims that it puts people before profits is unmasked by performance criteria that are entirely focused on sales quotas and operational efficiency goals and make no mention of the values the company publicly espouses.

My sense is that merely inspecting those documents is a good start, but not sufficient evidence.  I've worked in places where values were included in performance reviews, often as the first section, and were skimmed over in favor of more granular criteria that had no relevance to values, and were considered to be of greater importance.   So the review criteria themselves may still be disingenuous and misleading.

To get to the heart of the matter would require closer inspection: compare the ratings on performance reviews to actual incentives and rewards - compensation, benefits, bonuses, promotions, and the like - not just on the systematic level, but on the individual level.    That is to say, correlate the degree to which employees receive such rewards to their ratings in their performance reviews.   If you find that employees who score highly on values-based metrics  receive less in the way of rewards than those who accomplish the financial and operational performance goals, you're dealing with a company whose ostensible culture is in contradiction to its actual behavior.   In smaller words, you are dealing with a firm that has no integrity and likely very poor ethics.

With that in mind, the remedy is fairly simple: develop performance reviews that provide incentives to uphold the stated values of the organization, and you will effect a positive change in the organizational culture.

Granted, the authors had far more to say on the topic that just that - there are also matters such as how to define values (which is foundational), how to communicate them (also important), how to hire and promote the right kind of people (which is a distraction as a good apple doesn't unspoil the barrel), and other related topics.   But I found the notion of performance incentive to be among the most novel and substantial elements of their argument.