Heart of Management

Category: General

  • Post 4 out of 5: The Impact of Organizational Culture on Performance – When Does Organizational Culture Actually Harm?

    In previous posts, we discussed how strong organizational culture can lead to success. However, there are cases where culture can actually hinder the organization and even damage it.

    What does a “negative” organizational culture look like?

    1. Poor Communication and Information Hiding

    Communication is key to a healthy culture. But when there’s a lack of transparency, or when things go through organizational politics “filters” – that’s a bad sign. A McKinsey study showed that poor communication hurts the ability to handle changes and improve performance.

    2. Culture of Blame and Fear of Failure

    In places where failure is seen as “dangerous,” there’s less room for creativity and experimentation. A “blame-finding” culture stifles initiatives. An example of this is Kodak, which was a market leader but feared the transition to digital – something that led to its collapse.

    3. Work Overload and Poor Balance

    An “always working” culture leads to burnout. A WHO study showed that long working hours are harmful to employee health. Organizations that foster healthy balance gain more satisfied and productive employees.

    4. Lack of Transparency and Absence of Engagement

    When employees feel they have no idea what’s happening in the organization, alienation develops.

    5. Inflexibility and Resistance to Change

    A culture that’s not open to changes leads to a stagnant organization. When managers make change difficult, the organization might fall behind and fail to progress.

    6. Over-involvement in Decision Making

    Team involvement in decision-making sounds good on paper, but sometimes it leads to slowness and delays. When every team member needs to voice their opinion on every decision, processes can take too long and the organization loses its ability to respond quickly. The key is finding balance – knowing when to involve others, and when to make decisions and act fast.

    Summary

    Not every good intention creates a good outcome. In the next post, we’ll discuss how to build a healthy organizational culture that leads to real success.

  • Post 3 out of 5: The Impact of Organizational Culture on Performance – Strong Culture = High Performance? How Does It Really Work?

    In previous posts, we discussed what organizational culture is and the hidden factors that shape it. Now, let’s dive a bit deeper – how can a strong and healthy organizational culture improve your organization’s actual performance?

    1. Employee Motivation and Engagement

    A positive organizational culture not only makes employees feel good at work, but it also increases their motivation. Why? When employees feel part of something bigger, when their work has real meaning – they give their maximum. A Gallup study shows that highly engaged employees tend to be more productive, and their engagement improves their sense of belonging and commitment to the organization. This means they’re also less likely to look for another job.

    2. Collaboration and Strengthening Community Feeling

    When there’s a culture that promotes collaboration, employees feel there’s room for real dialogue. In such organizations, there’s more openness to ask questions, share ideas, and receive feedback – leading to better performance. A good example is Spotify – one of the most successful companies in the digital music world. Their culture is based on “squads” – small teams composed of diverse individuals who support each other to achieve quick successes.

    3. Creativity and Innovation

    In an organization with a culture that values creativity and openness, employees feel comfortable raising innovative and unconventional ideas. This culture creates a space where new things can be tried, even if they don’t always succeed. Steve Jobs often said that Apple’s success stems from employees’ ability to feel free to initiate, think outside the box, and be creative.

    4. Ability to Cope with Changes and Challenges

    A strong organizational culture contributes to the organization’s ability to deal with challenges and changes. When there are clear values and good communication, it’s easier to mobilize teams to work together to handle unexpected situations. Especially in an era like ours, where changes happen faster than ever, such a culture can be the organization’s competitive advantage.

    5. Increasing Employee Loyalty

    A healthy organizational culture encourages loyalty and satisfaction. The more employees feel valued, understand the organization’s goals, and belong to a strong community – the more likely they are to stay with the company long-term. And it pays off: according to a LinkedIn study, companies with a strong organizational culture experience lower employee turnover, leading to significant savings in recruitment and training costs for new employees.

    Examples from the World

    An excellent example is HubSpot. This company emphasizes values like “being change makers” and “collaboration”. The result? Employees are more engaged, satisfied, and loyal, and the company enjoys excellent performance and amazing business results.

    In the next post, we’ll talk about the less positive side of organizational culture – when organizational culture can actually be harmful, and how to identify the early signs of this.

    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. HubSpot Culture Code – https://www.hubspot.com/culture

  • Post 2 of 5: The Impact of Organizational Culture on Performance – The Hidden Factors that Shape Organizational Culture

    In the previous post, we discussed what organizational culture is and why it’s so important. But wait, have you ever stopped to think about what really influences organizational culture? Sometimes there are hidden factors, ones that we might not consciously notice, that significantly shape the culture in an organization.

    What are the hidden factors in organizational culture?

    There are several factors that we sometimes forget about, but they are an integral part of how our organization operates:

    1. Management’s perceptions and beliefs

    The way senior managers view the organization directly affects the culture. If managers believe in promoting innovation and giving freedom to employees, it’s likely that employees will feel more comfortable coming up with new ideas and acting independently. On the other hand, if management focuses only on results and the bottom line – this will affect the pressure and cause employees to work in a more tense manner.

    2. Communication patterns

    How do people talk to each other in the organization? Is communication open and flowing or does it go through many “filters” and bureaucratic processes? Research from the Journal of Business Communication shows that open and directed communication allows employees to be more involved, and ultimately improves organizational performance.

    3. Daily behavior

    It can be easy to miss the impact of daily actions on organizational culture, but they are an integral part of it. From how we deal with failure to how we praise successes – all of these affect employees’ feelings and values. An interesting example is Amazon, which maintains a culture of constant striving for improvement, bringing employees to always think about how processes can be improved.

    4. Hidden assumptions

    Hidden assumptions are those ideas and perceptions that have become so deeply ingrained that they’ve become almost invisible. This can be anything from a perception of “how a good employee should behave” to certain ideas about “what success is”. Once these assumptions are understood, it’s possible to start implementing changes that affect the entire culture.

    Why does it matter?

    Understanding these hidden factors is critical. Since organizational culture is more than just nice words or slogans, these are the factors that actually shape it and influence how everything operates in the organization – and ultimately business performance as well.

    In the next post, we’ll delve deeper into how a positive organizational culture can improve performance, and how you can identify and influence these hidden factors in your organization.

    Sources:

    1. Journal of Business Communication – Articles on the impact of communication on employee engagement.

    2. Amazon Leadership Principles – Amazon’s organizational culture and values: Amazon’s Leadership Principles

  • Fourth and final post in the series on Industry X.0: A Journey Through era’s in the industry and a Perspective on the Future

    The journey through Industries 1.0 to 6.0 reveals how much industry has developed and impacted the world. Each industrial revolution changed not only the way we produce, but also how we live, communicate, work, and use resources. These revolutions not only produced more efficient products, but also reshaped the economy, culture, and society itself.

    Looking Back on Industries 1.0 to 6.0

    Industry 1.0 brought mechanization and factory revolution to the world, ushering in the era of mass production, freeing humans from manual production, and enabling production on a scale previously impossible.

    Industry 2.0 continued the change with electricity and production lines, making products available to the wider public and making the world more connected.

    Industry 3.0 introduced computing and automation, making production more precise and effective.

    Industry 4.0 brought a new era where every machine and product can communicate with each other in real-time. These digital technologies sparked another revolution, especially in the field of data and connectivity.

    Industry 5.0 focuses on collaboration between humans and machines, not as a replacement for humanity but as a complement to it. Sustainability is a central pillar, with production focusing not only on efficiency but also on reducing environmental impacts and improving social conditions.

    Industry 6.0, as it appears now, is a forecast for the future that includes innovative technologies such as quantum computing and advanced artificial intelligence, which are still in research and development stages.

    Personal Perspective on Industrial Development

    In my personal opinion, future historians might view Industries 3.0, 4.0, and 5.0 as part of the same broad industrial revolution encompassing automation, computing, and artificial intelligence. Over the years, these technologies have only improved – becoming more efficient, more precise, and more available. The main refinement is not necessarily in new inventions, but in the wider use of existing technologies and making them accessible to all.

    What might be considered the “next industrial revolution” will occur, in my opinion, when we reach full integration between humans and machines. This is a state where humans and machines will work together in such deep collaboration that we won’t be able to distinguish where human thought ends and artificial intelligence begins. This is a vision that evokes excitement and also concern, as it brings with it deep ethical questions about the role of humans in such an industrial future. However, I am not a futurist, and it seems only time will tell how things will actually develop.

    For more interesting posts, follow the Heart of Management page.​​​​​​​​​​​​​​​​

  • Third post in the series on Industry X.0: Industry 5.0 and 6.0 – Collaboration between Humans and Technology.

    Industry 5.0 and 6.0 bring us to a new era where technology and humanity join forces to create innovative solutions and promote sustainability.

    Industry 5.0 – Humans and Machines Collaborate.

    Industry 5.0 focuses on close collaboration between humans and machines, with the goal not only of more efficient production but also an emphasis on environmental and social sustainability. Artificial intelligence and automated technologies function as partners that assist humanity in creating personalized products while considering minimal resources and recycling. An example of this is the Nike By You project (https://www.nike.com/nike-by-you), which allows Mass Customization – personalized production on a large scale while maintaining production efficiency.

    Industry 5.0 aims to create resource-efficient processes, using systems that minimize energy and material use, and incorporate recycling as an integral part of the process. In this generation of industry, which we are only at the beginning of, attempts are also being made to reduce overall environmental impact, while integrating renewable energy and reducing pollutant emissions. Additionally, Industry 5.0 promotes social sustainability, creating a healthier work environment for employees and improving connections with the communities in which it operates.

    Industry 6.0 – Predictions for the Future (Science Fiction).

    Industry 6.0 is still in the realm of futuristic predictions, and forecasts include technologies such as quantum computing, biotechnology, and advanced artificial intelligence, intended to address global challenges such as climate change and resource scarcity. Industry 6.0 aims for a deeper integration between humans, machines, and the environment, but for now, these are just predictions for the future.

    Space Manufacturing – Another Future Vision

    Another interesting direction for Industry 6.0 is space manufacturing. Thanks to unique conditions of low gravity and the ability to utilize external resources such as asteroids and the moon, it’s possible that in the future we’ll be able to produce advanced materials in space that cannot be produced on Earth. Companies like SpaceX and NASA are already conducting experiments on this topic at the International Space Station, aiming to examine these possibilities for manufacturing in different conditions.

    In the next post, I’ll summarize the topic of Industry x.0 and also add my opinion 😊.

    Did you like it? I’d love to hear your feedback.

    For more interesting posts, follow the Heart of Management page.

  • First post in a series about Industry X.0:

    Industry 1.0 and 2.0 – The Mechanization and Mass Production Revolution

    The First Industrial Revolutions: From Early Machines to the Assembly Line.

    In recent years, there has been widespread use of the term Industry 4.0. I decided to deviate from my usual practice and engage in a historical review of the various stages of industrial development from its beginning, even before we reached the latest revolutions.

    It’s important to remember that even before the industrial era, people produced products like horseshoes or weapons, but production was based on craftsmen and not industrial on a large scale.

    Industry 1.0 – Mechanization Comes to Production.

    The first industrial revolution in the 18th century brought about a dramatic change. Instead of manual production, machines began to take part in the process. A prominent example is Edmund Cartwright’s power loom, which enabled faster production of fabrics.

    Steam engines were the basis for the first factories. Industry also influenced transportation, with the production of locomotives and railways, allowing faster and more efficient transportation of goods and people. The result was economic prosperity and a profound change in social structure.

    Industry 2.0 – Mass Production Comes into Play.

    At the end of the 19th century, with the development of electricity and the invention of production lines, the world saw another revolution. An iconic example is the Ford Model T, the first car produced on a mass production line. Production lines led to cheaper manufacturing and made the car accessible to broader classes. In addition, urban growth was made possible thanks to industrial and transportation developments. Industry 2.0 created the ability to produce enormous quantities of products and change the global economic and social structure.

    In the next post, we’ll talk about Industry 3.0 and 4.0.

    Did you like it? I’d love to hear your feedback.

    And for more interesting posts, follow the Heart of Management page.

  • Final post (6) in the series on motivation, where we find the common denominators among all theories.

    These are things that, if we do them, will undoubtedly increase the motivation of the employees we manage.

    After examining five central motivation theories, we can identify several shared principles that interconnect and complement each other. Understanding the common ground between these theories can help managers create effective management strategies that promote motivation, satisfaction, and a sense of meaning in employees’ work.

    Meaning and Self-Actualization

    All theories emphasize the importance of meaning and self-actualization at work:

    • Viktor Frankl: Searching for meaning as a central component of motivation.

    • Maslow: Self-actualization as the highest need in the hierarchy of needs.

    • Herzberg: Motivators such as achievements and recognition that lead to satisfaction.

    • Deci and Ryan: Autonomy, competence, and relatedness as promoters of intrinsic motivation.

    • Schein: Behaviors that create a supportive and meaningful organizational culture.

    Personal Development and Growth

    The need for personal development and learning recurs in all theories:

    • Maslow: The need for self-actualization includes growth and development.

    • Herzberg: Personal development as an important motivator.

    • Deci and Ryan: Sense of competence and opportunities for professional growth.

    • Schein: Creating an organizational culture that promotes continuous learning and development.

    Human Connections and Belonging

    A sense of belonging and meaningful human connections are central components:

    • Maslow: The need for belonging and love.

    • Deci and Ryan: Relatedness as a basic need for intrinsic motivation.

    • Schein: Creating an organizational culture that promotes connections and collaboration.

    Working Conditions

    Creating proper and healthy working conditions:

    • Maslow: Satisfying physiological needs and safety.

    • Herzberg: Hygiene factors such as working conditions and adequate pay.

    • Schein: Behaviors that promote a supportive and safe work culture.

    Implementing the Common Ground in Management

    To create a work environment that promotes motivation and satisfaction, managers should integrate the various insights:

    1. Meaning and self-actualization: Provide employees with interesting and challenging work and help them find meaning in their work.

    2. Personal development: Encourage continuous learning and professional development, and offer training and advancement opportunities.

    3. Human connections and belonging: Create a positive and supportive organizational culture, and encourage collaboration and open communication.

    4. Proper working conditions: Ensure safe and comfortable working conditions, provide adequate pay, and maintain good relationships between all levels of the organization.

    Summary

    Finding the common ground among leading theories of work motivation offers a broad and comprehensive management framework. By combining these insights, managers can create a work environment that promotes motivation, satisfaction, and a sense of meaning. Understanding the different theories and implementing them in a balanced way allows managers to lead teams more successfully and efficiently.

    If you have questions or would like to hear more about ways to improve management and lead your teams, contact us. We are here to help you find meaning in your work and lead your organization to success.

  • Post 5 in the series on motivation:

    Edgar Schein’s Organizational

    Culture – Behavior Creates Culture

    Edgar Schein, an American organizational psychologist, developed the three-layer model of organizational culture, describing how individuals’ behaviors in an organization influence the overall culture of the organization. Organizational culture is a combination of values, beliefs, norms, and behaviors that shape how people in an organization communicate, work, and make decisions. Understanding Schein’s model can help managers create a positive organizational culture that promotes motivation and satisfaction.

    Three Layers of Organizational Culture

    1. Artifacts: The visible and obvious things like office design, employee dress code, and organizational rituals. These are the external signs of organizational culture.

    2. Values: The principles and standards that guide behavior in the organization. These values represent what the organization sees as important and central.

    3. Basic Assumptions: The deep-seated beliefs and perceptions that are taken for granted within the organization and are not easily discernible. These are the deepest foundations of organizational culture.

    How Behavior Creates Culture

    Schein suggests that the visible behaviors of managers and employees directly influence the organization’s basic assumptions, and ultimately create the organizational culture. These behaviors include:

    • Transparency: Managers who share decisions and developments with employees convey trust and inspire trust. This creates a culture of openness.

    • Listening: Managers who dedicate time to listen to their employees’ needs and suggestions promote a culture of collaboration.

    • Mutual Respect: Managers who treat every employee with respect and equality contribute to a culture of mutual respect and appreciation.

    Creating a Positive Organizational Culture

    To create a positive organizational culture that promotes motivation and satisfaction, managers should focus on the following points:

    1. Personal Example: Managers need to set a personal example and act according to the values they want to see in the organization. Managers’ behavior will directly influence employee behavior.

    2. Effective Communication: Encourage open and transparent communication at all levels of the organization. When communication is open, employees feel more connected to the organization’s goals and their sense of belonging strengthens.

    3. Team Development: Create opportunities for professional and personal development of employees. Workshops, courses, and training can improve employees’ abilities and increase their sense of competence.

    4. Recognition and Appreciation: Regularly recognize employees’ contributions and achievements. Recognition and appreciation not only improve satisfaction but also increase motivation.

    5. Fostering Empathy and Respect: Ensure respectful and empathetic treatment towards every employee. Empathy and respect are foundations for a positive organizational culture that contributes to satisfaction and a sense of meaning.

    Summary

    Edgar Schein offers us a deep understanding of how behavior creates culture in an organization. By creating a positive organizational culture that promotes values such as transparency, listening, and mutual respect, managers can increase employee motivation and satisfaction. Understanding and implementing Schein’s insights can improve leadership and contribute to the organization’s success.

    If you have questions or would like to hear more about ways to improve management and lead your teams, contact us. We are here to help you find meaning in your work and lead your organization to success.

  • Post 4 in the series on motivation:

    Self-Determination Theory by Deci and Ryan – Autonomy, Competence, and Relatedness

    The Self-Determination Theory by Ryan and Deci suggests that intrinsic motivation is created when three basic needs are met: autonomy, competence, and relatedness. When these needs are satisfied, employees experience high intrinsic motivation and a sense of meaning in their work. Understanding and implementing this theory can help managers create a work environment where employees feel driven, connected, and meaningful.

    Autonomy

    Autonomy is the employee’s feeling of control over their work and ability to make independent decisions:

    • Freedom of action: Allow employees to choose how to perform their work and offer their own solutions.

    • Flexibility: Provide flexibility in work times and location, according to organizational possibilities.

    • Participation in decision-making: Encourage employees to participate in decision-making processes that affect their work.

    Competence

    Competence is the feeling that the employee is capable of performing their work successfully and contributing significantly:

    • Training and professional development: Provide employees with training, courses, and workshops to improve their abilities and skills.

    • Feedback and constructive criticism: Offer constant feedback and constructive criticism that helps employees improve their performance and feel skilled.

    • Setting appropriate challenges: Offer employees tasks and challenges that match their skill level and allow them to grow and develop.

    Relatedness

    Relatedness is the employee’s feeling of being part of a group and having meaningful social connections at work:

    • Supportive organizational culture: Create an organizational culture where every employee feels part of a supportive and committed community.

    • Social activities: Organize social activities and team-building days that allow employees to connect with each other.

    • Listening and support: Listen to employees’ needs and concerns and provide emotional and personal support.

    Implementing the Theory in Management

    To create a work environment that promotes high intrinsic motivation, managers should emphasize the three basic needs:

    1. Nurturing autonomy: Provide employees with freedom of action and opportunities for independent decision-making.

    2. Empowering competence: Provide training and constant feedback, and encourage employees to take on appropriate challenges.

    3. Strengthening relatedness: Create a supportive organizational culture and social activities that strengthen the sense of belonging.

    Summary

    Ryan and Deci’s Self-Determination Theory offers a well-founded approach to intrinsic motivation at work. By satisfying the basic needs of autonomy, competence, and relatedness, managers can create a work environment where employees experience high motivation, satisfaction, and a sense of meaning in their work.

    If you have questions or would like to hear more about ways to improve management and lead your teams, contact us. We are here to help you find meaning in your work and lead your organization to success.

  • Post 3 in the series on motivation 

    Herzberg’s Two-Factor Theory – Motivators and Hygiene Factors

    Frederick Herzberg, an American psychologist and educator, developed the Two-Factor Theory, which separates motivators from hygiene factors. The theory suggests that different factors influence job satisfaction and motivation at work. Understanding the difference between these factors can help managers improve the work environment and motivate employees more effectively.

    Hygiene Factors

    Hygiene factors are related to basic working conditions. When these factors are lacking, employees may be dissatisfied, but their presence doesn’t necessarily lead to high motivation:

    • Salary and financial conditions: Pay employees adequately and provide good financial terms.

    • Job security: Ensure a safe and protected work environment.

    • Relationships with supervisors: Create good working relationships between employees and managers, maintain open and empathetic communication.

    • Organizational policy: Ensure that organizational policies are clear and fair, and implement them transparently and efficiently.

    • Physical working conditions: Provide adequate working conditions and physical facilities that allow for comfortable and safe work.

    Motivators

    Motivators are related to achievements, recognition, and a sense of meaning at work. These are the factors that lead to high satisfaction and intrinsic motivation:

    • Recognition of achievements: Recognize employees’ contributions and achievements, provide positive feedback, and encourage professional pride.

    • Interesting work: Ensure that employees perform interesting, challenging work that provides a sense of meaning.

    • Responsibility: Give employees more responsibility and provide opportunities to lead projects and influence the organization.

    • Personal growth: Encourage employees’ professional development and provide opportunities for advancement and continuous learning.

    How to Apply the Theory in Management

    To create a work environment that promotes high motivation and satisfaction, managers should emphasize both hygiene factors and motivators in a balanced way:

    1. Identify and improve hygiene conditions: Check if there are hygiene factors that may cause dissatisfaction among employees and work to improve them. This includes reviewing working conditions, salary, safety, and interpersonal relationships.

    2. Increase motivators: Focus efforts on creating interesting and challenging work, provide constant recognition of achievements, encourage employees to take responsibility, and offer opportunities for professional development.

    Summary

    Frederick Herzberg’s Two-Factor Theory provides a framework for understanding motivation and job satisfaction. By balancing hygiene factors and motivators, managers can create a positive work environment that promotes high motivation and personal and professional satisfaction of employees. The theory emphasizes the importance of creating adequate working conditions alongside encouraging achievements and a sense of meaning at work.

    If you have questions or would like to hear more about ways to improve management and lead your teams, contact us. We are here to help you find meaning in your work and lead your organization to success.​​​​​​​​​​​​​​​​