Effective Organization

You Might Not Always Get What You Want

What does it mean to have a "Formal Culture" and an "Informal Culture"?

Have you ever instituted a new policy or procedure into your organization, spent countless hours and dollars trying to drive the initiative throughout the organization, only to see it fall flat? Organizations large and small face a similar problem -- how to make their organization become what they envision it to be.

When organizational experts refer to the overall performance of an organization, they often use the word “culture”. While there is disagreement on the exact definition of organizational culture, most would agree that it includes the values and behaviors that the majority of participants engage in; what most of the people believe and do most of the time. This is called the “informal culture” as compared to the “formal culture”, or what the leadership wants the culture to be. It makes no difference if your organization is a large corporation, a small “mom and pop”, a non-profit, or an educational institution, each of you have a formal and informal culture. One aspect of great organizations is that they close the gap between the two cultures so that “what’s going on - out there” very much resembles the vision of leadership.

“Informal Culture is what
most of the people believe and do
most of the time.”

You may wonder if these great organizations close this culture gap by hiring the “right people”, or if they do something more intentional to close this gap. The answer quite simply is both. Great organizations start with great people, but they also understand and affect the other aspects of their culture.

The Best Organizations

The best organizations don’t stop with simply creating rules and policies, they do much more to impact the everyday behavior of their employees. If you’ll refer back to our August 2012 Post on the role of contextual factors in industrial safety incident prevention, the very best bosses and organizations understand that human performance is a result of complex systems. Organizational factors such as rules, policies, and reward systems are only a portion of the complex system that drives human performance. The best organizations understand that it is also people, both the individual and intact teams, plus surroundings that drive their overall performance. If the employee base has failed to implement a new directive from leadership, there could be several reasons affecting this. It could be that employees don’t understand the new initiative, operational pressures contradict the initiative, they don’t have the equipment necessary to make it happen, or a myriad of other factors. The very best organizations are those that are able to gather field intelligence detailing actual performance and factors driving the performance, and then institute corrective measures that enable the workforce to align their own performance with the vision of leadership.

So what does that mean for you if you are in an organization with a gap between your formal and informal cultures? We would first encourage you to perform a cultural analysis to get a better understanding of your informal culture. With this knowledge you will be able to understand what contextual factors are driving the performance of your employees. This information will allow you to initiate corrective measures to close the gap between your formal and informal cultures. The best organizations don’t make the mistake of simply focusing on changing people, they focus on the entire context to enable those on board to perform to a higher standard.

3 Considerations When Implementing New Policies & Procedures

Most organizations have policies and procedures that they expect employees to follow.  One difference between the best organizations and the rest is how those policies and procedures integrate with various components of the organization.  In this blog we will detail three key organizational components that the best take into consideration when evaluating and implementing new policies and procedures.  Let’s begin with an example of the impact of a new policy and its associated procedure in a normal organization.  

Company XYZ was having problems tracking expenses incurred by their employees when they were traveling on company business.  To deal with these issues, they decided to institute a policy that all employees must use a new web-based program to record all expenses, scan receipts, and track payment.  The procedure was straight forward and only required an employee to log into the system using their employee number, input requested information including the vendor name,  total amount spent, and scans of receipts.  When the information was completed the employee simply hit submit and the program took over from there.  The CFO was very excited about this new policy because it was going to make his life and his office staff’s job much easier.  Six month’s later they went back to their paper tracking system because they had continued complaints from employees and they terminated one employee who refused to use the system.  The CFO determined that it was a failure because employee’s were simply too irresponsible to use a new and simple procedure.

So how do the best avoid these types of problems?  Do they simply hire more responsible and competent employees or is there something else?  With the example above in mind, let’s examine how the best organizations look at three key factors to help develop and implement new initiatives, including policies and procedures.

1.  The Individual Employee (Self):

People are very complex and make decisions about things on the basis of a variety of factors which include knowledge and past experience.  People are also typically averse to change because it requires effort and many times is counter to the habits that they have developed over time.  The best organizations want to affect both the knowledge and habits of employees to ensure that they actually comply with new P&P.  In the case of the expense tracker, the best organizations might train employees on the proper use of the software and hardware (computer and scanner) and on the value associated with the new procedure, so that they had the necessary knowledge and skills and were therefore competent and motivated to use the new procedure.  They could also address old habits with email reminders, signage in the workplace, or other means to prompt a break in the old habits associated with the paper tracking system.

2.  Other People in the Organization and How They Affect the Individual Employee (Others):

The performance of individual employees is influenced by the people around them in significant and specific ways.  Two of the common factors exerting this influence are the “help” and “model” provided by others.  When an employee is experiencing difficulty with the execution of a new procedure because of knowledge, skill or resources, getting assistance from a coworker can provide the needed support to create success.  The best organizations create work environments where peer support and assistance is both encouraged and reinforced by management.  Modeling simply means that other people demonstrate that they are accepting change by utilizing and supporting the new policy or procedure.  When an employee sees others using the new procedure to input their expenses without complaint, they are more likely to want to comply with the policy.  If they see other employees, especially the boss, not doing so then they are more likely to see the new policy as a mere suggestion and resist or avoid the new procedure all together.

 3.  The “Stuff” Around Us That Impacts Our Performance (Surroundings):

The best policies and procedures are merely good ideas without the surroundings to support their use.  Our employees work in environments that not only include other people, but also physical surroundings such as climate, equipment and the layout of that equipment.  These physical surroundings impact the ease with which people can implement new policies and procedures.  Let’s return to our expense report example.  The operations of the XYZ company are often conducted at remote sites that don’t have  the tools of a modern office.  Employees have laptops but wifi and scanners are only located at central field offices.  Employees rarely spend any significant time in these offices, rather they perform their work out in the field.  The equipment they need to use the new procedure is a resource that they would have to travel great distances, after hours to use.  For these employees, in these surroundings it was just easier to turn in paper receipts and reports hoping somebody else would log it for them.

Managers in the best organizations understand that the knowledge and habits of individual employees, the help and model provided by others, and the surroundings in which employees find themselves are significant factors in determining the successful utilization of organizational policies and procedures.  They understand that without deliberately addressing each of these contextual factors they are likely to fail in the implementation of new initiatives.

4 Steps to Influence Mission "Buy-in"

How can I influence employees to "buy-in" to the mission of the organization?  As we stated in our last newsletter, the mission of an organization “is its reason for existing, its purpose, where it is headed”.  People need to know, understand and “buy-in” to the mission so that they can “get on board” and help with its accomplishment.  But how can you get them “on board”?

Average organizations assume that people are on board when they read the mission statement, so they place signs and even plaques around their facilities, on the walls in conspicuous places, so that employees are always aware of the mission.  We call this “buy-in by proclamation” and it is a strategy that a lot of managers use when giving assignments and introducing change.  However, while awareness is essential, it is not sufficient for buy-in.

The key is to “influence”, not to dictate or merely proclaim.   Influence is not related to “power” but rather to understanding and therefore requires communication of the impact of accepting the mission and the individual’s role in its accomplishment.  This requires communication of something more than the mere mission statement.  It requires communication of the relationship of the organization’s mission to the success of the organization, the individual and society in general.  We recommend following a 4-step process in communicating these relationships.

  • Articulate the importance of the mission to the success of the organization.
  • Articulate the importance of the mission to the individual team members.
  • Articulate the importance of the mission to society/customers.
  • Communicate 1, 2 and 3.

While we could discuss these steps in the abstract, it might be helpful to use a specific example, so let’s use The RAD Group’s mission statement as that example.

“The RAD Group’s mission is to improve individual, team and organizational performance.  We seek to provide products and services that help leaders create a culture in which employees are skilled, motivated and able to serve all stakeholders - employees, investors/owners, customers and others.”

1.  Articulate the importance of the mission to the success of the organization.  This mission statement helps to guide our decision making relative to what products and services we develop.  Not all products and services fit with our mission and we only consider those that do.  Likewise, not all products and services that fit our mission are accepted or developed; only those that are deemed to contribute to both the success of our customers and the success of The RAD Group.

2.  Articulate the importance of the mission to the individual team members.  Every team member of The RAD Group understands that his/her success is in some part tied to the success of the organization.  Likewise, every team member understands how his/her performance impacts the success of every other team member and therefore, our ability to succeed as an organization.  Marketing impacts our image, research impacts the quality of the products and services that we develop and delivery impacts our reputation and impact on the performance of our customers.  The understanding of this connectedness increases the motivation of each of our team members to work toward the accomplishment of our mission.

3.  Articulate the importance of the mission to society/customers.  This may sound a bit lofty, but we need to understand that if our mission does not provide value to society, and especially our customers, that there is little or no reason to exist as an organization.  We believe that what we do provides value to our customers by improving their performance and we constantly challenge ourselves to both demonstrate and increase that value.

4.  Communicate 1, 2 and 3.  While we do attempt to communicate our mission formally through papers, speeches and marketing materials, communication does not have to only be formal.  It can be done through conversation with customers and within the organization by respectfully challenging and evaluating ideas to determine if they align with the mission.  We bring our mission statement to life, not by having it on a plaque (although we do have it on our business cards as a reminder), but rather by asking ourselves regularly if our products and services are improving the individual, team and organizational performance of our customers.  We also attempt to measure that impact to help us fine tune those products and services.

Dreaming of Greener Pasture

How do I find personal satisfaction in an organization that doesn't seem interested in being effective?

This is a very important question for all of those who have spent time working in seemingly heartless or meaningless organizations.  In January’s newsletter we defined an effective organization as one that meets its stated goals and accomplishes its stated mission.  But of course, by this definition, low goals and unimportant missions can create effectiveness and this would miss the point, therefore we add that effective organizations are those where the mission and goals are ones that people would want to invest in and/or participate in because they bring value to not only the individual, but also customers and society in general.

So what about the employee who is stuck in an organization that doesn’t seem to meet these criteria?  The easy answer is to simply quit and find a better organization.  While this may seem to be the prudent decision, is it the right one?  Let’s now refer back to the original question and focus on a key word in the question - “seem”.  Often times employees can only guess as to what their organization’s goals and mission may be because they have not been clearly articulated (our February Newsletter topic).  Until one clearly understands where leadership is wanting to take the organization, employees should not make bad guesses about their willingness to be effective.  This is where candid and frank conversation with leadership is critical to clearly understand the mission.

For argument’s sake, let’s make the assumption that the employee is actually working in an organization that simply has no intention of meeting our definition of an effective organization.  How do we find personal satisfaction without simply leaving for greener pastures?  At this point the employee needs to focus on what they can control and influence within the organization.  They have control over their own performance and influence over the performance of their team.  To this end, an objective setting and strategy exercise can help the person move toward higher satisfaction.  We would recommend that the employee set short, intermediate and long term objectives for themselves and, where possible, their team.  These objectives should meet five SMART criteria.

  1. Specific
  2. Measurable
  3. Attainable
  4. Relevant
  5. Time Bound

Once we have SMART objectives in mind, the next step would be to create a task list which would take us step-by-step to the accomplishment of each objective.  The key to reaching our objective is to stick to the plan while measuring its effectiveness.  These measurements of effectiveness are critical to determining if we are on the right track.  If the measurements are in-line, we should continue on course until the objective is met.  If the measurements show that we are somehow failing, we need to either tweak the task list, or reassess the objective.

We find that those who focus on individual and team objectives, with a sound strategy for attaining and measuring, have greater satisfaction and better performance than those who simply go to work every day, counting the days until the next paycheck.  In the end, organizational effectiveness is impacted by both organizational mission and employee performance.  Not all of us have control or even influence over mission, but we all have considerable impact on our own performance and the objectives that we set can help improve that performance and ultimately our satisfaction.