When Mr. Florentino Perez, the president of the world’s most followed football club, Real Madrid, announced his “Glacticos” policy, few doubted its success. Mr. Perez signed on some, if not all, of the world’s most expensive and famous footballing talents in trying to create a team to be feared of. A team supposedly destined for great success.
A decade later, the policy is widely derided and is synonymous with under-performance and limited success despite having some of the best players of a generation in the same team. The common reason given to the lack of success was that though the team had every ingredient necessary for success – talent, money and great facilities, it lacked that crucial ingredient – culture of team work.
A common thread across all organizations, be it start-ups or established firms, is that organizational culture matters. Organizational culture influences every aspect of the company, from decision making, product development to performance and hiring. An organization that lacks strong organizational culture, especially team work, will not succeed despite great individual talent.
When does culture start to really matter? Does culture happen on its own or is it created and shaped?
According to Todd McKinnon, CEO of Okta, there is indeed an inflection point for organizational culture to have gained enough mass to really matter. According to him,“it’s premature to focus on building a world-class culture before a world-class product. In the beginning, all that matters (or should matter) is building something great and lasting. Only then, as your company grows, can culture exert its powerful effect on people by steering them to act or to behave in a certain way when the path is otherwise unclear”
He further states that the inflection point will be different for each company and when the inflection point arrives is not a function purely of time or number of people.
McKinnon states again, “As you grow, it becomes harder to communicate everything, to get consensus on every decision or to create a process and procedure for everything. A strong and clear culture can give everyone the proper framework to work within.” So the inflection point can be when the founder’s vision is not being clearly communicated to the rank and file of the organization. When there is no consensus on decision making or as he comically puts it “When I woke up and no longer knew the name or role of every person whom I passed in the office.”
So in essence, every organization reaches a point where organizational culture begins to matter. And it is then time to shape it and nurture it by giving it direction and purpose.
Senn Delaney, a Heidrick & Struggles company, calls itself the “culture-shaping firm”. As a recognized leader in helping firms big and small change and shape their culture, their knowledge on the subject can be interesting reading and viewing. Here is the link to a video from their CEO on “Organizational Culture – Best Practices”.
Regardless of best practices, it is important to know that culture can be and should be shaped and changed proactively to changes in the business environment. But there is key question that has received very many ambiguous answers. Does culture change involve shaping current culture to match an organization’s founding vision? Or is it more into shaping the vision itself in response to business challenges?
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