Organizational culture is created by what leaders pay attention to

Organizational culture is created by what leaders pay attention to

In my last post, I discussed how leaders can impact organizational cultures with their actions and behaviors. Today I want to discuss how organizational culture is created by what leaders pay attention to.

The crucial question is – are they paying attention to the right things?

When I worked in health care, I had the good fortune to be chosen, along with seventeen other leaders, to learn the Juran Quality Methodology for our launch of Continuous Quality Improvement (CQI) teams.

This methodology is also applied in Total Quality Management (TQM). The foundation of this approach is the Pareto Principle, also known as the 80/20 rule. Management consultant and quality-guru, Joseph Juran posited that in quality, 80 percent of the problem is caused by 20 percent of the causes.

The Pareto Principle also applies to other areas of business: 80 percent of your sales come from 20 percent of your clients; 80 percent of your sales come from 20 percent of your products.

This principle is applicable in many aspects of our lives such as population and wealth distribution, computer science, criminology and financial services.

Juran crafted this approach into the vital few and the useful many.

As leaders, we often apply this idea to our employees, as we identify and pay attention to those that are the vital few compared to the useful many. Hopefully this identification process is grounded in measurement and metrics.

In quality, the mantra measure what you treasure is repeated constantly when looking at what is vital in our organizations. This is where the creation of organizational culture is directly linked to how and what we measure.

Organizations take very different approaches to measurement. Some are only bottom-line focused and have not deployed strategic measurement of how they get to that line. Others have created dashboards that allow for tracking all indicators, processes and outcomes of getting to that line.

There are four key areas to be measured and each area has a direct effect on the human system.

1. Strategic clarity

How well are the strategic direction and objectives understood by the masses?

If people are the vehicle used to have this strategy realized, why is it that they are left out of the strategy development? I hear HR leaders constantly claiming that they want a seat at the table, yet they do not supplant themselves into the planning process.

Most strategy is developed and then handed to HR to “populate the deliverables” into the employee record or to express the goals in some form of communication. The problem with this standard approach is that it doesn’t support the second key area of measurement: goal alignment.

2. Goal alignment

After we’ve reached strategic clarity, there needs to be a mechanism to track which projects, goals and tasks are assigned to this strategy. Populating employee records without the ability to be extremely specific on the who and the how may not align to the true measurement we are trying to achieve.

3. Clarify expectations

Clarifying expectations is vital in the creation of culture. As a cultural indicator, it’s the assumptions and norms that can create an essential foundation or ruin an organization.

An easy example of this is looking at an organization’s values. Most organizations believe they have a strong mission, vision and values, yet oftentimes the values are not defined and modeled in behavioral terms. If an employee cannot see the values being lived by the leadership, then all the values are just words on the back of your employee badge or a plaque on the conference room wall.

4. Accountability

Who is being held responsible for delivering those strategic goals? How is that being communicated when there are positive and negative consequences to actions and behaviors?

Let’s go back to clarifying expectations and values. If the values have not been defined in behavioral terms so employees can see them, taste them, touch them, then you have no mechanism to hold anyone accountable for living those values.

But, if your organization has defined them in behavioral terms and then rolled them into the performance management process, now you have a measurement tool for your most valued treasure — your culture.

What are you paying attention to?

Organizational culture is created by four distinct methods in an organization:

Image credit to Felix Global Corp. 2010

However, to create an inclusive and congruent culture it needs to be an intentional process. So leaders, what are you paying attention to?

Related reading: For more insights on how to intentionally create your organizational culture read Lizz’s post How leaders can impact organizational cultures with their actions and behaviors.