Wednesday, April 24, 2013

Is Corporate Culture a Type of Competency?

Culture is differentiator!


People seem to have different ideas about what culture means in (and for) an organization. A company's culture helps define what a company is like. What it means to be part of the company, how to act in the company, what others in the company believe and strive for even how others see the company. Culture can be defined as "the collective programming of the mind which distinguishes the members of one group or category of people from another." Then, is culture a type of business competency?

Some believe that culture is a competency: it is something a company can be good, better, or worse at. According to this view, culture is something a company does; it's a set of behaviors that are closer or further from an ideal. On the other side, for those who believe that culture is not a type of competency: According to this view, culture is closely aligned to both what the company believes in, along with the practices and expectations associated with these beliefs.

  1. Culture is organization’s Collective Mindset. The word competency implies a learnable skill. Is corporate culture learnable? Change management gurus certainly think so. It also implies some set of metrics that provide ranking of an organization's mastery of the learned subject - culture - along with the relative benefit of various levels of mastery of the subject and ranking of various versions of culture one against another. Is one culture of greater benefit than another? Certainly there are various other cultural attributes that we can rank good, better, best. 
  1. Culture is Organization’s Fingerprint: Culture of an organization is an intrinsic value system, a fingerprint of an organization, Culture can be a competency measured through performance. Culture of an organization is an indicator of the competency parameters at their best. Thus, Culture is an indicator of the organizations capability to achieve results in competency parameters. Competency could be learned but Culture of an organization remains a fingerprint and an identity of the organization. If one were to write a case study of the organization's journey to success, the culture of the organization becomes a key element of interpreting the path to excellence, not as much the measured performance parameters. Management should reflect the values and positions established both through the mission statement and more specifically those competencies found in the governance statement 
  1. Culture is Organizational Habit. Schein's definition of organizational culture is: "A pattern of shared basic assumptions that the group learned as it solved its problems that has worked well enough to be considered valid and is passed on to new members as the correct way to perceive, think, and feel in relation to those problems."Culture by this definition is not highly malleable, and tends to be resistant to change, like habit. However, organizations can learn, benchmark against, competencies to improve business performance. Whereas the cultural aspect is an intrinsic factor that drives the organization's business longevity. An organization with an excellent culture is arguably capable to give great results in their competencies. Highest rated competencies could be very short lived if the organization lacks the culture to rate and retain the value system beyond the business results. More to the point, like “Seven habits of high effective people”, certainly in a given strategic environment, a certain culture is a competitive advantage.  
  1. Culture is Business Brand. Company culture is closely aligned to what the company believes in, along with the practices and expectations associated with these beliefs. Those beliefs are brought in by the people who make up the company: both leadership and the members of the organization. There is not always perfect alignment between the two. However. The cultural competency arises in the manifestation of the company culture both internally and in the final analysis in the market environment. If the internal is not properly addressed the external will also suffer. Corporate culture will therefore have an impact on the type of service or product finally created. Extrinsic reflection of culture is your business brand. 
  1. Culture is "Corporate" DNA: Either stagnant giant or small startup, culture can be a critical component of a company's success. A company with a culture of openness, innovation, high standards in ethics and merit based compensation can motivate team member to work towards a common goal. Likewise, one that rewards yes-men, mediocrity, is patronizing or full of nepotism has the reverse effect. Creating and maintaining the right corporate culture is in itself a competency. 
  1. Culture is Business Attitude: The concept of generic strategies also has implications for the role of culture in competitive success. as old saying: Culture eats strategy for breakfast.  Culture, that define set of norms and attitudes and help shape an organization, has come to be viewed as an important element of a successful firm. However, different cultures are implied by different generic strategies. Building the capacity to intentionally shape the culture a business needs, rather than allow it to develop by default. Culture reflects your business attitude. 
  1. Culture is Differentiator. Differentiation may be facilitated by a culture encouraging innovation, individuality, and risk taking, while cost leadership may be facilitated by frugality, discipline, and attention to detail. Culture can powerfully reinforce the competitive advantage a generic strategy seeks to achieve, if the culture is an appropriate one. At high maturity level of corporate culture, it is far easier to measure business effectiveness. Learning a corporate culture encompasses both what is found in the training manual and what is told around the water cooler. Some companies have taken a proactive approach to purposely creating a defined corporate culture and the competitive difference 
  1. Culture is Business Asset. Mastering upon the creation, development and leadership of a healthy, innovative and constructive culture is a strategic competency. Culture and the Legacy are that the organization writes about itself through the times of decisions, dynamics and challenges. The fabric of "value system" and "credibility" differentiate an organization from others. A company's culture can be an asset. But assets are different from competencies. Certainly, some competencies are also assets, but not all assets are competencies. 
Culture indeed means a lot of things, either as integral part of organizational competency or key factor in nurturing business competency. And business competency is both organization’s capacity and capability, ,at the core of culture, it’s about business leadership substance, enterprise strategy perception, talent management philosophy, and organization brand and reputation.



2 comments:

Pearl, too many definitions water down the concept. I'm with Schein. Culture is shared beliefs.

I don't remember ever seeing metrics on culture. Fingerprints are something one leaves behind; culture leaves traces but its main value rests in dealing with the future. Culture shapes brand but it is not the same: brands face outward; culture faces inward. DNA is hard-wired; culture is hard to change but malleable. Culture differentiates but that doesn't define it. Culture is an asset in the broadest sense; screwdrivers are also assets; being an asset doesn't add to understand it.

Culture is vital glue that holds organizations together but it's not everything.

Hi, Jay, thanks for the comment, culture indicates many things, but it doesn't mean culture is as same as those things such as brand, as many times, organizations ignore their cultures as they are invisible, in fact, culture is critical in organization's long term competency, that's my purpose to blog a series of culture matters. Again, appreciate your sharing.

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