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What is Organizational Culture and How Can it Work for You?

Learn why organizational culture should be at the forefront of every CEO's mind as well as how a healthy organizational culture can boost productivity, help you retain and recruit top talent, and aid you in achieving peak performance and profitability.

Are you struggling, like many organizations today, to accelerate new ideas?

Is it common to see team infighting, finger-pointing, side-taking, and nitpicking of details that drag down results?

Are the old methods of boosting employee engagement just not cutting it anymore?

Does it take a long time to make decisions—and even longer to implement them… if they’re implemented at all?

Why healthy organizational culture is so relevant today

The effects of Covid are being felt at every level of the workforce and people are more unmotivated and unproductive than ever. Organizations everywhere feel stuck in this place of unproductivity because there is a significant lack of trust in the workplace and people fear the necessary change needed to allow the company to grow and improve.

At the root of many of these problems is a toxic organizational culture. Many leaders today are unaware of the sea change in culture affecting their bottom line.

A healthy organizational culture is crucial if you want your business to be successful in this climate. A healthy organizational culture can, and often is, a key point of differentiation for successful companies. I’m sure you’ve heard the phrase ‘organizational culture’ dozens of times, but many leaders today are not aware of what it means, nor how to fix it.

Organizational culture is not just about how your company looks to the external world, but also how the external view is aligned with the environment created internally. It is the everyday experience of the employees and the leadership team, and it can make or break your company. Their experience must align with your stated mission and the perception the outside world has of your company.

If you are experiencing these issues you can begin to tackle the problem by assessing what type of organizational culture your company has today. See more about how to get that assessment below.

4 Main Types of Organizational Cultures

There are 4 main types of organizational cultures and they are as follows: clan culture, adhocracy culture, hierarchy culture, and market culture. Some are good and some are not so good and could be at the root of your problems. Below are a few characteristics of each.

Clan Culture:

  • Clan cultures are based on collaboration and teamwork

  • They have strong core values and a focus on employee engagement and contribution

  • There is a strong internal focus and high levels of support

  • This is a high-trust culture in which employees are given ample autonomy

Adhocracy Culture

  • Adhocracy cultures are flexible and individual focused

  • They value individuality and creativity

  • They are externally focused and chase innovation

  • This is a high-trust culture in which employees are given ample autonomy

Hierarchy Culture

  • Hierarchy cultures are fixed and focused on power structures

  • They have clearly defined roles and value structures and authority

  • There is a strong internal focus and multiple levels of management

  • This is a low-trust culture with little autonomy offered to employees

Market Culture

  • Market Cultures are based on internal and external competition

  • They value customer satisfaction and profits

  • There is a strong external focus with clearly defined roles and expectations

  • This is a low-trust culture with little-to-no autonomy offered to employees

The Ideal Organizational culture

As with most things in life, the ideal organizational culture is a balance of extremes. Too internally focused and a business will get no customers. Too externally focused and a company will be unable to retain employees. Too much creativity with no strategy leads to nothing getting done. Too much strategy with no creativity leads to stagnation.

The ideal organizational culture lies somewhere in between all 4 of the cultures listed above. The kind of change required to create an ideal organizational culture takes time, patience, and a helping hand. At KeenAlignment, we have taken hundreds of companies with broken cultures and transformed them into healthy, productive, and high-performance organizations.

If you want help transforming your organizational culture, book a consultation with one of our executive coaches. You can also sign up for our free 21-day framework program and receive an email every day for 21-days containing educational videos, free resources, coaching questions, and more designed to help you start your change journey.

Why is organizational culture so important?

Employee Engagement

Employees are the backbone of any company. If your employees are dissatisfied and unmotivated, then employee engagement is probably low, causing your company to be less productive. This can have a dramatic impact on your bottom line. The US department of labor reported that 60% of people are emotionally detached at work. If people are emotionally detached, they are not producing the high-level work required to perform in today's market.

Gallup reported that companies with high levels of employee engagement have 81% fewer absences and 14% more productivity. Fewer absences mean less money down the drain and higher productivity leads to increased profits. Employee engagement matters and a healthy organizational culture is one where employees have the purpose, drive, and support they need to be and stay engaged and operate at their highest levels of effectiveness. Yet, it has become very challenging to achieve in today's environment.

Retention and Hiring

The Great Resignation is a result of people being unsatisfied with their jobs and unhappy with the work they are doing. As new generations enter the workforce, the needs and values of employees are changing. People are no longer just chasing after a paycheck. They want the work they do to have purpose and meaning.

Unsatisfied employees lead to high turnover rates which increase labor costs exponentially. Gallup reports a 43% difference in turnover rates when employees are engaged. If you want to retain and recruit top talent at your organization, you need a winning culture.

Establishing a noble purpose is a great first step in crafting a high-performance organizational culture. You can learn more about how to create a noble purpose here.

Productivity and Profitability

In today's market, if you want to be making profits the work your company is producing must be exceptional. Exceptional work requires exceptional employees. Exceptional employees require support in the form of an environment that fosters productivity.

According to Gallup, engaged employees have a 23% increase in productivity over unengaged employees. Not only is more work being produced, but the work is also of higher quality and therefore more effective at collecting profits and satisfying customers. If you want to boost your company’s success, a high-performance organizational culture is required.

Summary and Conclusion

  • There is a significant amount of distrust in the workplace and people are not receptive to change

  • Addressing the weak points in your organizational culture is a powerful way to create lasting change and improve employee engagement

  • Internal work is just as important as external work in any corporation

  • Keenalignment has worked with hundreds of companies helping them to transform their cultures and boost their productivity tenfold

  • Reaching out to experts with unbiased opinions like the ones at Keenalignment can help you catalyze the change you want to see

Learn more about transforming your organizational culture from KeenAlignment. CEO and founder Margaret Graziano has written a new book, soon to be released, called Ignite Culture. This book is all about empowering and leading a healthy, high-performing organizational culture from the inside out.

You can sign up for exclusive sneak peeks of the book and a special discounted price HERE. Also, don’t forget to enroll in our free 21-day framework program to receive short daily courses and tons of free resources based on crafting a healthy organizational culture and lasting, effective change in your company.

To your success,

The KeenAlignment Team


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