Is there proof that organizational culture determines performance? Look at the ground-breaking study of Professors John Kotter and James Heskett in their book Corporate Culture and Performance. They studied the corporate cultures of over 200 companies (including Hewlett-Packard, Xerox, ICI, Nissan, and First Chicago) and tracked their economic performances over an 11-year period. What they found is fascinating: your culture can enhance economic success or make you fail to adapt to changing markets.
Does organizational culture matter?
Organizations with strong, shared company values increased their revenue on average to 682% over 11 years. Companies without a clear culture grew to just 166%
Heskett says that effective culture can account for 20-30 percent of the differential in corporate performance when compared with “culturally unremarkable” competitors.
So, culture matters. As culture evolves anyway, when people get together on a regular basis, you’d better influence that culture consciously. And it’s not just a strong culture that’s favorable. You need a positive culture to achieve high performance.
What’s the benefit of a positive culture?
Positive is productive. It affects the business bottom line. I talked with two Asian managers who shared their beautiful case story that aligns with all the positivity research. This Asian manufacturing factory almost collapsed in 2014. But it was turned around within two years by a new plant manager who used positive leadership.
The productivity in pieces per hour for each product line rose from around 71 in 2014 to over 100 in May 2016. While productivity went up, fallout costs plummeted. The rework rate improved from 38 % down to 7 %. Downtime in one of the product lines went from 16% to 2%
Those were huge improvements! They did this by working on the people side of the organization, so there was no restructuring of processes or product lines. They developed a positive culture and that’s how they achieved extraordinary performance. We’ll look at more details in the Academy.
That’s one nice case, but research confirms that this works for all organizations: Positive makes people and performance thrive. Professor Kim Cameron at the University of Michigan has been researching positive organizations for years. He found that a positive climate, positive relationships, communication, and positive meaning lead to “positive deviance” or high performance.
The usual response to a problem is to go back to normal. But in a positive culture, the focus is on what is working well and what people could do even better. A positive culture creates an “upward spiral” so it’s easier to achieve what is called Positive Deviance. People go the extra mile and might even surprise themselves.
Positive leaders can change what is “normal”. Instead of problem-solving and returning to the zero-line, they aim for “positive deviance”. This is what companies such as Wells Fargo, Ford, Kelly Services, Burt’s Bees, Griffin Hospital, and Zingerman’s have been doing. They prove that you can create positive change in your organization through simple actions and attitude shifts.
In the Academy, we’ll look at how exactly you can create a positive culture in your team or organization, with these typical colleagues, leaders and local dynamics. It’s great to read the research but the magic only happens when you can apply this to your situation. This means you’ll have to customize some of the general advice, and to prepare yourself, to make this work with your co-workers!
This research is important because one huge impediment to change is that many people don’t believe that change is possible. Do you recognize this: people started their work life optimistically, then they turned realistic and, finally, they became pessimistic or cynical. “Positive culture?! Welcome to this dog-eat-dog-workplace!”
I’m sorry if that’s where you find yourself. You might want to get out of such a workplace. Or it could be time to enroll in the Academy to influence your organizational system.
“But what if this doesn’t work with my team? You haven’t met my colleagues! You should see my boss!” The good news is that all people respond to positivity, even if they seem a bit suspicious when you do something kind, or give them a compliment. Of course, change won’t happen overnight, and you’d need support from a few positive others, and it might not always be easy, and it takes more than just handing out compliments. But that’s what we’ll work on in the Academy. You’ll learn to focus on what and who is working well and to enhance those activities and people.
Another misunderstanding might be that positive leadership and a positive culture are hippy-like and soft. “Let’s all be happy bunnies at work.” As we’ll see in the Academy, positive cultures set boundaries and targets as well. People do not get away with slacking. A fake smile is not part of a positive culture, either. Negative feedback is part of the game but delivered in a constructive way.
Positive leaders are like WiFi
Here’s a positive culture story from my fellow author and consultant Steve Gladis. Steve had two former bosses: Phil and Bill. Phil was open, playful, easy and safe to talk to, and Steve enjoyed his job and team. Then Phil got promoted and was replaced by Bill. Bill was judgmental and distrusting and infected the team with his attitude, remarks, and behaviors. To Steve’s surprise coworkers started to distrust each other. One after the other, people quit!
Authority, either from Phil or Bill, has a powerful influence on followers because the leader archetype affects us all, whether we’re aware of it or not, and whether we like it or not. Remember the notorious Milgram experiment in the 1960s where people obeyed authority figures and inflicted what would have been fatal electric shocks to other people (no actual shock was applied – the others were actors). It is embedded in our subconscious mind to copy behaviors that are approved by the authority figures in the culture.
In addition to our focus on leadership, the amygdala in our brains scans the environment for potential dangers, like a smoke detector. “It is always on and stimulates the injection of hormones for fight and flight. Its basic question is: Will this threat eat me, or can I eat it? (Goleman, 2007).”
If we assess something as a threat, we will focus on it which narrows our scope, creativity, and ability to think of creative solutions. Stress creates tunnel vision and makes us vulnerable to judgment errors, jumping to conclusions, getting defensive and worse. Moreover, it’s spreading. Gladis says: “Leaders are like WiFi broadcasting a signal that gets picked up by roaming wireless network connectors in the brains of co-workers. Thus, leaders set the mood of the workplace and create a long-term culture over time.”
In case of positive leadership, that’s great. Research shows that working in the vicinity of a positive leader, makes you positive (Goleman, Biyatzis, McKee, 2004).
Some theorists even say that we affect people at least three levels out beyond ourselves. Imagine a “contagion” of positivity spreading because you decided to develop a positive culture! In the Academy, you’ll learn how to do just that.
If you’re interested you might want to enroll in the Academy!
You can check the Curriculum here.
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© Marcella Bremer, 2017. All rights reserved.