Post 1 of 5: The Impact of Organizational Culture on Performance – What is Organizational Culture and Why is it So Important?

So what’s the deal with organizational culture? It’s a topic that’s talked about a lot, but how does it really affect your organization? Organizational culture isn’t just nice phrases on office walls or on the company website. It’s about what happens day-to-day – how we communicate with each other, how decisions are made, and how we generally conduct ourselves.

So what exactly is organizational culture?

In simple terms, organizational culture is all the values, behaviors, and norms that guide our organization. It sets the tone of the organization, from how we welcome new employees to the way we handle challenges.

Edgar Schein, one of the leading researchers in organizational culture, says that organizational culture consists of three layers:

1. Visible level – This is the part we can see, like office design, dress code, and symbols.

2. Hidden level – Social norms and behaviors that we don’t always see, but we all feel.

3. Basic underlying assumptions – Our deepest perceptions, which are quite difficult to pinpoint, but dictate much of our conduct.

Why is it so important?

When we have a healthy and supportive organizational culture, employees feel they belong and are more connected to their work. They feel they have a place to come up with ideas and express themselves without fear. In fact, a Gallup study found that employees who feel connected to their organizational culture show higher engagement at work, and such engagement increases productivity by about 17%! So yes, it’s quite important.

Examples from the field

Many companies have succeeded thanks to a strong organizational culture. One of them is Netflix, known for its work culture that allows freedom and personal responsibility. Netflix manages to create an atmosphere that leads to excellent results because employees feel they have autonomy and influence.

In the next post in the series, we’ll talk about the hidden factors that shape organizational culture – and how they affect organizational performance.

Sources:

1. Gallup’s State of the Global Workplace report – https://www.gallup.com/workplace/349484/state-of-the-global-workplace-2021-report.aspx

2. Netflix Culture Deck – https://jobs.netflix.com/culture