This lesson on organisational culture is designed to help senior business leaders understand the importance of culture in their organisations and provide them with the tools and strategies they need to understand the culture they have joined.

We will focus on developing a deep understanding of the current culture that exists within an organisation, aligning culture with organisational objectives, beliefs, attitudes, behaviours, customs and values. 

Objectives of this lesson:

• Find out what organisational culture is, and why as a new leader, it's important to observe and understand.
• Understand the role and impact of culture in driving organisational success.
• Identify the current culture within your own organisation and assess its strengths and weaknesses and alignment to organisational objectives.
• Analyse internal and external factors that drive the culture
• Examine evidence-based insights into how culture can impact individuals, teams, and organisations.

Understanding Organisational Culture: Crucial for New Leaders

Organisational culture is the complex and unique environment created by the shared values, beliefs, attitudes, and behaviors of its employees. It encompasses everything from how decisions are made to how employees interact with each other and with customers. While often intangible, it significantly impacts everything from employee morale and performance to customer satisfaction and brand reputation.

For a new leader, understanding the existing organisational culture is critical for success in their new role. Here's why:

1. Building Trust and Credibility: Stepping into a new leadership role without understanding the culture can alienate and disenfranchise existing employees. By taking the time to learn the cultural norms and values, new leaders can build trust and establish themselves as someone who "gets it," fostering better buy-in and collaboration.

2. Avoiding Mistakes and Conflict: Ignoring the culture can lead to missteps and misunderstandings. For example, a leader accustomed to a highly hierarchical environment might unknowingly offend employees in a more collaborative and flat structure. Understanding the cultural nuances helps navigate challenges and avoid preventable conflicts.

3. Making Effective Decisions: Culture impacts how work gets done. Without grasping it, leaders might make decisions that clash with existing practices or values, leading to resistance and inefficiency. Conversely, understanding the culture allows them to leverage its strengths and address weaknesses for informed decision-making.

4. Adapting and Leading Change: Even the best leaders need to instigate change at times. But without understanding the cultural landscape, change efforts can face resistance and fail. Knowing the culture helps predict potential barriers and tailor change initiatives for better acceptance and effectiveness.

Organisational culture is not just an abstract concept; it's the very fabric of any organisation. New leaders who invest time in understanding it position themselves for success, building trust, making informed decisions, leading effective change, and ultimately, contributing to a thriving organization.

You could think about the following elements that make up organisational culture:

• Shared values
• Beliefs
• Attitudes
• Behaviors
• Customs 

Here is an example, both positive and negative, of what beliefs could exist in an organisation, and what behaviours to look for that might help you identify them...

Beliefs (positive)

Fairness and transparency: "We believe in treating everyone with respect and providing equal opportunities for growth."

(Behaviour: Consistently applying policies and procedures, offering unbiased feedback, and promoting from within.)

Personal accountability: "We believe each individual is responsible for their work and contributing to the team's success."

(Behaviour: Taking ownership of tasks, meeting deadlines, and proactively identifying and addressing problems.)

Risk-taking and learning: "We believe in calculated risks and embracing failures as opportunities for learning and growth."

(Behaviour: Encouraging experimentation, providing constructive feedback after mistakes, and celebrating successful learning experiences.)

Beliefs (negative)

Micromanagement and distrust: "Employees are not trusted to make decisions, leading to micromanagement, low morale, and stifled initiative."

(Behaviour: Constant supervision, excessive reporting requirements, lack of autonomy.)

Blame and scapegoating: "Failures are met with blame and scapegoating, fostering fear and hindering learning and improvement."

(Behaviour: Publicly identifying and criticizing individuals, focusing on punishment over solutions, discouraging open communication about mistakes.)

Exclusivity and favoritism: "Favoritism and nepotism create an unfair playing field and hinder upward mobility for qualified individuals."

(Behaviour: Promotions based on personal connections rather than merit, lack of diversity in leadership positions, ignoring complaints of unfair treatment.)

CASE STUDY: TEACHING CULTURE SO THAT NEW HIRES "GET IT"

Jessica was excited to overhaul the distribution processes at her new employer, Luccia Semiconductor. Jessica's previous role as a senior logistics manager for one of the technology sector's foremost supply chain innovators made her a highly touted recruit, and she was eager to showcase her skills. In her first four months at Luccia, Jessica had toured manufacturing and distribution facilities on three continents, dissected historical performance measures, and developed a series of process change recommendations that were sure to impress. Her business case was airtight: She could save the company millions each quarter and cut distribution time by 30%.

Standing before her boss and a small group of supply chain VPs, Jessica confidently launched into her first presentation, which laid out her finely tuned process-improvement proposal. Five minutes in, she reached a slide that was sure to inspire the group to take action: A graph that quantified the wasteful spending plaguing the distribution function. It was at this point that something surprising happened. Jessica had just begun her detailed description of the group's inefficiencies when her boss's supervisor, the Logistics Vice President, Frederick Joseph, interrupted. "Jessica, let me help get us refocused. Thanks for raising this issue, but we have a full agenda today, and I think it would be a far better use of time for the whole group if you and I discussed your ideas later."

Confused, Jessica sheepishly sat back down at the board table. Her boss pulled her aside after the meeting to discuss what had happened. "Fred has been with the company for 15 years. He practically built the logistics function from the ground up. Your presentation was spot on, but it called his management skills into question in front of the other VPs. That's why he cut you off”

Jessica was upset. She wasn't boorish or untactful. In fact, she had long been noticed as someone who knew how to get along with others and collaborate productively. At a post-crisis meeting with her mentor, Jessica learned that she had misread her new organization's culture. At her old company, the culture encouraged constructive debate, regardless of level or stature, nobody felt like fingers were being pointed-it was the norm. The mantra "best idea wins" was plastered on the wall of every conference room of the manufacturing operations headquarters and at each facility. Jessica had mistakenly assumed that this same culture prevailed at Luccia. She had never even considered the possibility that the two organizations would possess such different cultures. Unfortunately, nobody had coached her about this. Now she had gotten an abrupt and disturbing wake-up call.

Jessica's experience is hardly unique. For most new hires, understanding a new company's culture is a difficult, nuanced, and gradual process. It's also mystifying, since so much of the company culture remains under the radar. New hires learn about the culture through osmosis over the course of numerous interactions with other employees. Gaffes and miscues are the norm, leading to frustration and sub-par performance. Often
a company's professed culture taught during the initial orientation program doesn't reflect realities on the ground so much as the culture desired by management (unlike Jessica's previous employer, where the mantra was the culture). In other cases, companies do not spend much time at all orienting new hires to the culture, either formally or informally. This omission amounts to a huge error made by some of the greatest organizations.

With adequate instruction, the manager can help prevent these gaffes in the first place, or at the very least, apply damage control for the new hire and turn the gaffe into a helpful learning experience. The sooner new hires understand the organization's unwritten rules, the more risk we can take out of the system for them, and the more quickly they can make an
impact and feel gratified by their contribution.

Ref: Successful Onboarding; Mark A Stein and Lilith Christiansen