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Organizational Culture

By: Malcolm Fleschner

Company culture, sometimes referred to as corporate culture or organizational culture, is an integral part of any company's identity. Organizational culture dictates how business is conducted, the way decisions are made and how employees treat one another.

At small businesses in particular, each employee can have a sizable impact -- either good or bad -- on the organizational culture. Most small business owner can tell stories of past hires, employees who, despite having impeccable credentials and great interviews, "just didn't fit in" or "rubbed people the wrong way."

The impact of these common hiring mistakes at a small business can be significant, including turnover costs, training and equipment outlays as well as the "softer" costs of diminished morale, reduced employee productivity, not to mention increased uncertainty in the workplace.

As Rotterdam Business School professor Will Felps has pointed out, studies show that so-called "bad apple" problem employees can single-handedly reduce group productivity by 30-40 percent while infecting other group members with their negativity and apathy.

What Matters to Company Culture?
So what can small businesses do to avoid these problems and ensure that new hires fit in with the existing organizational culture? The first step is for small business owners to determine just what that culture is, exactly.

One strategy suggested by Jamie Resker, the president of the Massachusetts-based Employee Performance Solutions, is to identify your organization's core values and expectations based on what she calls "the things that drive you crazy." Some examples from her own experience include:

"I hate it when people don't follow through on what they say they will do."

"I don't like conflict -- when there's a gap between my expectations and what actually happens, I'm uncomfortable about giving that feedback, even though I know that's how you change the behavior."

"It annoys me when I send someone a message and it takes 2-3 days to get a response."

Then, Resker recommends you take the frustrations you've listed and flip them around to describe what you DO value and would like to see happen at your organization. Based on the above comments, a business owner might determine that the company's cultural values include prompt follow-through, creating built-in processes for providing regular feedback and responding to messages within a few hours of receiving them.

Your Company Culture: Who Succeeds and Why?
Another suggestion comes from Noel Perkins, a principal with the San Francisco-based Human Resources Thinking, who recommends thinking about organizational culture in terms of the informal paths to success that prevail at the company.

"One way I get to that 'a-ha' moment with business owners is to ask, 'Who is your top performer and why?'" she says. "What makes that person so indispensable? Why is that person successful? Once you think about it in this way, it becomes easier to translate that back into searching for that type of person who will fit into the role you're hiring for."

Perkins adds that autonomy is one of the most common areas of conflict in company culture.

As a business owner, do you run a traditional, "tight ship" type of office with a top-down decision-making process? Or do you expect employees to take initiative and not defer to management to answer any and all business-related questions, even if that means making (and, hopefully, learning from) mistakes?

Interviewing to Suit your Organizational Culture
During the interview process, small business owners should absolutely engage candidates on the issue of company culture and ask what kind of work environment they feel most comfortable in.

One approach, says Jay Sjostrom, a Minnesota-based executive search consultant with LarsonAllen Search, is to talk about and compare the organizational culture at the candidate's current or former company with that of the hiring company.

Mission statements, company literature as well as short and long-term goals are good touch points, he says. The conversation might then turn to more specific issues such as core values like integrity and character, self-motivation, empathy and the work ethic of key managers and executives.

Perkins says that the most powerful tool for getting to the heart of the cultural compatibility question is the behavioral interview

While these interviews are typically aimed at assessing personal strengths and capabilities, Perkins argues that behavioral interview questions can also reveal the kind of workplace atmosphere a candidate prefers.

"'If this happened to you, what would you do?' is the simplest way of wording a behavioral interview questions," she says. "But you can also ask what the person's most recent project was and how they handled it. Then follow up by asking who else was involved, whether others had to be consulted, who built the team, what the results were, and what they might change. Then tie those answers back to your organization, and how well this person would fit in with the way you do things."

Perkins adds one note of caution, however, advising small businesses to follow a piece of Shakespearean wisdom from Hamlet's father: "To thine own self be true."

"I've been to some clients' offices, and on normal days everyone looks sort of shlumpy at their desks," she says. "Then on the days when there are interviews, I look at everyone going into the conference room and they're all wearing suits. So I say to them, 'Are you hiring people to wear suits or to look shlumpy?' Be who you are and talk about who you are. That's how you find the right person and the right person finds you."

 

 
 

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