Peter Drucker is credited with coining the phrase “culture eats strategy for breakfast”, referring to the importance of organisational culture to the success of a company. Since culture is derived from the leadership and employees, the assumption is that getting the best talent can ensure you create the best working culture for your business.
In a recent strategy meeting with the leaders of a Fortune-500 company, the word “culture” came up 27 times in 90 minutes. Business leaders believe a strong organisational culture is critical to success, yet few know how to build or control it.
Answering three questions can help transform culture from a mystery to a science:
- How does culture drive performance?
- What is culture worth?
- What processes in an organization affect culture?
Academics have studied why people work for nearly a century, but a major breakthrough happened in the 1980s when professors Edward Deci and Richard Ryan from the University of Rochester distinguished the six main reasons why people work.
The six main reasons people work are: play, purpose, potential, emotional pressure, economic pressure, and inertia.
The work of many researchers has found that the first three motives tend to increase performance, while the latter three hurt it.
- Play is when you are motivated by the work itself. You work because you enjoy it. A teacher at play enjoys the core activities of teaching — creating lesson plans, grading tests, or problem solving how to break through to each student. Play is our learning instinct, and it’s tied to curiosity, experimentation, and exploring challenging problems.
- Purpose is when the direct outcome of the work fits your identity. You work because you value the work’s impact. For example, a teacher driven by purpose values or identifies with the goal of educating and empowering children.
- Potential is when the outcome of the work benefits your identity. In other words, the work enhances your potential. For example, a teacher with potential may be doing his job because he eventually wants to become a principal.
Since these three motives are directly connected to the work itself in some way, you can think of them as direct motives. They will improve performance to different degrees.
Indirect motives, however, tend to reduce it.
- Emotional pressure is when you work because some external force threatens your identity. If you’ve ever used guilt to compel a loved one to do something, you’ve inflicted emotional pressure. Fear, peer pressure, and shame are all forms of emotional pressure. When you do something to avoid disappointing yourself or others, you’re acting on emotional pressure. This motive is completely separate from the work itself.
- Economic pressure is when an external force makes you work. You work to gain a reward or avoid a punishment. Now the motive is not only separate from the work itself, it is also separate from your identity.
- Inertia is when the motive is so far removed from the work and your identity that you can’t identify why you’re working. When you ask someone why they are doing their work, and they say, “I don’t know; I’m doing it because I did it yesterday and the day before,” that signals inertia. It is still a motive because you’re still actually doing the activity, you just can’t explain why.
High-performing culture maximizes the play, purpose, and potential felt by its people, and minimizes the emotional pressure, economic pressure, and inertia.
How can you define a high-performing culture.
Culture is the set of processes in an organization that affects the total motivation of its people. In a high-performing culture, those processes maximize total motivation.
- A badly designed role negatively effects employees’ total motivation. Some companies make special efforts to design a highly motivating role.
- The next most sensitive element is the identity of an organization, which includes its mission and behavioural code.
- The third most sensitive element is the career ladder in an organisation.
What can Leaders do
Looking at all these processes together, it’s clear that culture is the operating system of an organization.
“The only way talent management will truly succeed is by being in support of, and part of, the business strategic plan and ultimately part of the culture or mindset of the organization.” – Avedon & Scholes
A great culture is not easy to build — it’s why high performing cultures are such a powerful competitive advantage.
“World – class organizations have learned that their competitive edge is driven by an integrated talent management strategy fully aligned with the business's mission and vision and meaningfully incorporated into its long – term strategic planning.” – Scott & Mattson.
Since culture is derived from the leadership and employees, the assumption is that getting the best talent can ensure you create the best working culture for your business.
Human capital is the key component for performance as we’re still very much dependent on our ingenuity, emotional intelligence and managerial skills to drive the business forward. That’s why management-level search is an opportunity to upgrade the leadership “gene pool”, improve the culture and the performance of the business.