For many years, we have understood that organisational culture is key to supporting high performing organisations.In the 80’s, Hofstede set out core concepts of what culture is, and how it drives performance within organisations – ‘performance depends on the fit between strategy and culture’.Even today, the adage ‘culture trumps strategy every time’ is often cited when organisations are seeking to improve performance or embark on business transformation.

However, the growth of ‘start-up’ culture in recent years may have skewed our perception of what it really means to have and maintain a strong organisational culture. The growth of digital firms, expansion of shared workspaces and the attractions of the ‘west coast’ approach to business could give the perception that a strong culture can be established through working long hours, getting free meals, dressing down and free drinks on a Friday. But is this enough – and are there warning signs that some of these new organisations are struggling to maintain a positive culture? We take a look and provide some perspectives.

What is culture and why is it important?

There are many definitions, but we believe a good start is to consider culture as the firm’s personality. As one of the UK’s fastest growing consultancies, a core element of our success has been developing and enhancing a strong personality, to the extent that ‘Culture’ is of the firm’s four core operating dimensions alongside Business Development, Marketing and People & Talent.

In short, culture impacts how the organisation functions and achieves its goals – again back to the fit between strategy and culture. This is not static – over time, culture will evolve with new employees, leaders and societal shifts. Despite these changes, the ability to keep performing well will remain a top priority for all businesses, and hence why culture remains so critical.

Research indicates that organisational culture is linked to employee happiness, which in turn has been linked to both productivity and profit. One study by John Kotter found that revenue growth was on average four times higher for those with a performance-enhancing culture. Has this changed with the rise of digital companies? With organisations like Google and Facebook, we have come to see the ‘work hard, play hard’ culture of tech start-ups as the gold standard. Given the appeal of these incredibly high performing businesses to prospective employees, it would be easy to assume that these cultures should be emulated. However, we have seen some extraordinary evidence that some of the biggest successes have developed a culture that may harm them in the long run.

Is there a dark side to high performing cultures?

Recent news about Uber and Amazon provide two interesting examples. A former Uber employee highlighted the company’s culture in a scathing blog post, with accusations of rampant sexual misconduct within the company, and an aggressive culture. Following this, Uber found itself facing at least five criminal probes in the US, a handful of lawsuits and the resignation of its CEO Travis Kalanick in June 2017. Amazon boasts of its ‘relentlessly high’ standards, admitting that many think they are unreasonable. These standards have undoubtedly contributed to its exponential growth over the years. However, employees have reported being encouraged to tear down each other’s ideas in meetings and send secret feedback to each other’s bosses. One ex-employee was said to have seen nearly every person they worked with ‘cry at their desk’.Is this really what is required to develop high performing organisations?

Our answer, quite simply, is no! Instead, we believe that attracting and developing the very best talent, and prioritising the development of a positive, strong culture, are the critical steps required to deliver high performance. At Moorhouse, we have a culture of open dialogue; feedback is a gift, and our people are encouraged to use this to dedicate more focus and energy to excelling in their areas of strength. Embedding this culture has taken commitment and sponsorship from our most senior leaders, who have led by example.

Culture change is a complex area, but we believe there are three initial steps which all organisations can take:

1. Understand the current culture

Establish what the current culture really looks like, using focus groups, interviews and surveys to find out how employees feel about their work and what it means to them to work for. Communicate your organisation’s culture clearly to build brand identity, increase employee loyalty, attract and retain the best talent.

2. Leverage change and transformation

In this digital age change is ‘the new normal,’ so ensure that you use change and transformation to your organisation’s advantage. We have recently completed a transformation initiative with an award winning telecoms organisation, where we facilitated a real shift in its culture, leaving the organisation more accepting of change.

3. Put culture first

At Moorhouse we practise what we preach, with a Culture team that sits within our core business operations. This means that culture is treated as an ongoing programme of work, rather than something that is static or reactionary. One of the many benefits of this approach is that we have been able to foster a culture that is agile and responsive to change.

If you’d like to hear about how we helped an award winning telecoms network change their culture, or understand how you can implement cultural change in your organisation, contact Caroline Sorby at Moorhouse Consulting.