Why is it important for an HR professional to understand organizational culture?

A company’s culture is imperative to its strategy especially when you consider this fact:  culture influences whether talent is attracted or not attracted to the company.  It’s also significant in the company’s ability to retain their best employees.

According to Gallup, 4 in 10 U.S. employees strongly agree their organization’s mission and purpose makes them feel their job is important.  Furthermore:

“By doubling that ratio to eight in 10 employees, organizations could realize a 41% reduction in absenteeism, a 33% improvement in quality, or in the case of healthcare, even a 50% drop in patient safety incidents.”

Gallup has studied organizational culture and leadership for years.  They find some organizations have difficulty in successfully establishing their “ideal” culture and attribute that to the fact that culture is constantly in flux and is not the same one moment to the next.

REPORT DOWNLOAD:  Developing a Culture of Innovation

Earlier this year, researchers looked specifically at how HR leaders fit into the process of changing culture. 

“Our analytics show that in the world's highest performing organizations, HR leaders play a central role in creating and sustaining the culture their organization aspires to have. As the stewards and keepers of the culture, HR leaders are responsible for inspiring desired employee behaviors and beliefs -- and in turn, realizing the performance gains of a thriving culture.

By owning their pivotal strategic and tactical roles in shaping work culture, HR leaders can cultivate exceptional performance and prove to senior leadership that they deserve a seat at the table.”

For HR, Gallup set forth three roles that explain how leaders influence culture.

1. Champion – Executive leaders create the vision of the perfect culture, but HR leaders champion it. They are responsible for turning words into deeds.
2. Coach – HR leaders, as coaches, make sure managers and employees are on the same page and help the two entities take ownership of the culture.
3. Consultant – HR leaders here consistently check culture metrics such as employee engagement, customer outlines and performance indicators. In this way, HR leaders can make sure the culture strategy stays on track.

Culture Affecting Leadership

There is another side of the coin when it comes to this particular concept.  We know how leadership affects culture, but what about how culture affects leadership.

HR Exchange Network contributor Michael Rosenberg writes extensively about culture.  In one of those pieces he asks, “does leadership create culture or does culture create leadership?”  The answer, he said, to both questions is yes.

"I have been here 25 years," said the director of a large municipality. "I have outlasted three city managers so far, and I will outlast this one." This is the attitude many leaders face, especially when they are brought in from outside organizations to run or manage large, well-established ones. The negative cultures can especially undermine positive leadership as initiatives are actively undermined by managers who have a stake in the old culture. Whether it’s through manipulation or complacency, negative cultures can create significant challenges for change.

Negative leadership, however, can have a fast, dramatic effect on a positive culture. WorldCom was a telecom leader and had a very innovative culture until Bernie Ebbers took over. While squeezing every cent he could from the environment and putting pressure on employees to work harder with less, he was pillaging the company. Turnover soared and, within a few years, WorldCom was bankrupt.”

To read more of his analysis, click here.

In Summation

As I’ve written this piece, there’s been a question nagging me.  Similar to the query we’ve all heard about the chicken or the egg, which comes first:  culture or leadership?  I don’t know that there’s fair answer to this question from an analytical or research perspective.

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However, if I were forced to pick one or the other, I would choose culture.  Culture exists whether there is leadership or not.  If you put a group of people together, their distinct backgrounds will inform the relationships they create and that will inform the culture that comes about as a result.  Leaders are born of that union.  Culture exists at the most basic level.  But leadership cannot be written off entirely.

Why?

Leaders have the power to steer culture.  The right HR leader can make culture, through change, both  powerful and successful.  And can empower employees to stand by it and take ownership of it.

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