Creating A Culture of Excellence

Developing an excellent organization is essentially a task of growing an excellent culture.

Much has been written about culture within organizations, with some theorists doubting that such a thing even exists. Most people who have worked for more than one organization agree that something exists about an organization that is more than the sum of its assets or even its people.

Barnouw (1963) stated that culture is the way of life of a group of people; others have said that culture is just “how we do things around here.” I believe an organization’s culture covers a wide range of things that you see (what are buildings and furnishings like? How often do people meet? Are dress and/or language formal or informal? Are there separate executive facilities such as parking or dining or are such things more egalitarian?); as well as things you don’t see (values, attitudes, norms of behavior, and adopted roles). In fact I believe it is true that the most powerful aspects of culture are those underlying mental models and values, which are not seen but which shape what people think, say, and do.

Another important aspect of culture is it is something that older members (in terms of seniority and power) try to instill in new members. This self perpetuation is great if a healthy, even excellent culture has already been developed. On the other hand, if a toxic, non-productive or even destructive culture has developed, changing that will be made more difficult because of the inertia created by the existing, dominant culture.

Understanding how cultures develop helps us know what steps need to be taken early in an organization’s existence to ensure a culture of excellence. Likewise, that same understanding gives us clues about how to change a culture that is less than desired. Schein (1992) states that culture arises over time out of common experiences and shared meaning that is extracted from those experiences. As those shared experiences occur, the meaning of those experiences will emerge within the group and some form of organizational culture will develop. Additional experiences over a longer time will strengthen assumptions and reinforce values so that the organizational culture will become both more defined and differentiated from the larger cultural milieu and also more deeply embedded.

There are three important components an organization can use to develop a culture of excellence: recruiting, socialization, and developing congruency with and commitment to the organization on the part of the employees. In Jim Collins’ outstanding book, Good to Great, he makes the point that getting “the right people on the bus” is the first step towards excellence.

I believe that starts with organizational leadership. To create an excellent organization, the leaders must be excellent themselves: They must not only believe in but manifest in their actions a passion for the organization’s mission and its vision and values (see previous post on these topics). Assuming a deep commitment to the organization’s mission and alignment with the desired values exists in leadership, the next step is to hire and promote, in large part, based on those same characteristics. Sure function, technical, and professional skills are important, but excellence depends on deep alignment around the intangibles. Who is brought into an organization, over time, determines to a great extent what the organization will become

The next important component for developing a culture of excellence is socialization. Socialization occurs in families as children are born and raised; and it occurs in organizations as new members are inducted, mentored, fostered, oriented, and in all other ways formal and informal made part of the “team”. This is a very important step and more effort needs to be taken than having everyone go through a half-day orientation. If a culture of excellence is going to be developed, it is important to have someone who reflects the desired values mentor and guide the new member until he or she can function in the organization in a way that is culturally appropriate.

This brings us to the third component for developing a culture of excellence: developing congruency with and commitment to the organization on the part of the employees. For people already in the organization, open and honest discussions about organizational direction, and the values and assumptions being fostered, are very important. Such discussions will allow people to reflect on how those values, assumptions, and the behaviors that flow there from, fit with what they think, believe, and hold most dear. These types of discussions routinely occur during planning sessions, team meetings, and in individual formal and informal discussions. They also occur as organizational leaders explain events, or frame them, in such a way as to help create a common understanding and response. This creation of a common organizational understanding is a key aspect of leadership because it helps foster a shared meaning that organizational members will have to key events – building the common culture.

Ideally, these discussions will reveal there is a great deal of consistency between the values of the individual and the organization. Failing that, the individual, upon reflecting on the culture that is being developed in the organization, will see the advantages to it and strive to align with the culture. Other times, for a culture of excellence to develop, the person and the organization will have to part ways. Interestingly, how this is decided and done can be, and often is, an important, perhaps defining, “common experience” that will help create the organization’s culture.

Foundational Pillar for Organizational Excellence

One of the major reasons that organizations fail to achieve excellence, I believe is a lack of clarity about why they exist, what they are trying to do, and what they need to do to be successful.

Among the first things founders of an organization should do is clarify the mission, vision, and values for the organization. This is equally true for existing organizations when there is a change of leadership or a change in direction or focus. Too often, in a rush to get to the work of the organization, or to respond to the demands of business in the case of existing organizations, these critical, foundational elements are skipped or glossed over. I believe that clear mission, vision, and value statements should serve as the pillars upon which future planning, budgeting, and operations rest.

W. Clement Stone is quoted as saying, “When you discover your mission, you will feel its demand. It will fill you with enthusiasm and a burning desire to get to work on it.” Thus it is for organizations as well. A clear, compelling mission has the effect of generating enthusiasm and releasing the energy of organizational members. Whether it is a new or an existing organization, ensuring that the mission is clear, and that people understand it and support it, is critical. Having discussions about the mission with organization members will reveal if the mission is clear and if there is general agreement and support. If either is missing, these same discussions can help resolve the situation. Through active listening, underlying, and perhaps unspoken, concerns can be addressed and resolved. I have found that discussions about organizational mission can regenerate enthusiasm among its members about why the work of the organization is important and why they became part of the organization originally. The process of clarifying the mission allows people a chance to reconnect to the organization based on their own values and interests.

The next foundational piece that is required for excellent organizations is a common vision of what the organization is trying to become. Proverbs 29:18 states, “Where there is no vision, the people parish.” This may be an overstatement for organizations but vision statements are an important communication tool to ensure there is clarity and unity within an organization. This vision statement is typically broader than a mission statement; also it is meant only for those inside the organization as opposed to the mission statement which may be more generally distributed. A vision statement expresses in vivid language and detail, painting a word picture, what the organization is striving to become five, ten or even more years in the future. This word picture should describe what you are trying to build and can serve as inspiration for action. It also serves as a measure against which an organization can measure its performance.

Ideally, a vision statement will have a powerful, attention capturing first sentence that will reinforce the mission and can serve as a powerful motivating slogan. Microsoft’s, "A personal computer in every home running Microsoft software" is a good example of such a slogan. Such a statement, if done right, can serve as a mini-vision statement: one that can be memorized, remembered, and thus more easily impact organizational behavior.

The third pillar upon which organizational unity rests is the values statement. A values statement cites the values the organization holds most dear and reflects how the organization expects its members to treat each other, customers, suppliers, and often the greater society and environment. Developing a values statement is a critically important process. Perhaps even more than the mission or vision statement, the values statement will be the measure against which behavior will be measured. Care should be taken to ensure that values incorporated in the values statement are those most deeply held and that will drive organizational action. Adopting a values statement that sounds good but does not reflect reality can be dispiriting and cause more harm than good. However, well crafted, and truly believed values statements provide solid guidance about how decisions should be made and what actions taken.

Together mission, vision, and values statements can help an organization achieve unity of purpose, clarity of vision, and a clear basis for action. They are, I believe, foundational elements needed to create an excellent organization.

Motivated to succeed?

An essential element to achieving organizational excellence is the motivation of its members. Too often when we talk of motivation we speak about it as if it is something done to someone: “He isn’t performing up to expectations, I have to motivate him to try harder” or “She is a great leader. She can really motivate her employees.” Ultimately, a key step in achieving organizational excellence is when all, or at least a critical number, of its members are motivated to strive for common goals. How is that commonality of focus achieved?

Some try to achieve that aligned state by threats or fear. Some try pep talks and activities designed to drum up enthusiasm. Some try external rewards and incentives. There may be appropriate times to use each of these measures. Each may work for a period of time but none have a lasting effect. When the fear is removed, the pep talk forgotten, or the need that drives behavior towards earning the external reward is fulfilled or another bigger reward is offered for different behavior, the external motivation ceases to have power.

Long lasting motivation is internal and it is aligned with the values the individual holds most dear.

Perhaps the best known theory about motivation is Maslow’s Hierarchy of Need, a model of human motivation wherein people’s actions are believed to be prompted by progressive stages of needs. The base level of need is “physiological”: food, water, oxygen; those minimal things that are necessary to sustain life. The next higher order of needs under Maslow’s model is “safety”. In this level of need Maslow placed such things as physical and psychological security, safety, protection, and freedom from fear or anxiety. The third order of need is “love”. In this level of needs are the drives for acceptance, affiliation, love, and belonging. “Esteem” is the next higher order of need in Maslow’s model. The need for esteem includes recognition of intelligence, strength, or other prowess, prestige and status. The highest of Maslow’s levels of need is “self actualization”. In this level, a person is concerned about personal growth and fulfillment, peak performance, or reaching their highest personal potential. Maslow stated that until a lower level need is substantially met, an individual could not move on to fulfillment of a higher level need, but once, and as long as, those lower level needs were met sufficiently, they ceased to provide a motivating force for that individual.

Expectancy theory of motivation holds that individuals are motivated to attempt any given action based on their belief that they can successfully accomplish the action and that successful completion of the action will bring the results they desire. Of course this presupposes that the foreseen outcome of the action is something they support or wish to happen. If the anticipated outcome is contrary to their most closely held beliefs or values, they will resist accomplishing that goal, irrespective of reward. In general, a formula for expectancy theory would be: Motivation = Expectancy of outcome x attractiveness of outcome. Motivation to act, then, depends on people believing they have sufficient control to positively impact outcomes and that the anticipated rewards are worth the effort.

In this last sentence is the key for leaders and managers of organizations that are trying to create an environment where members are motivated towards a common goal. First, organizational and individual goals need to be expressed and understood in a way that resonates with the values of the individuals involved. Organizational members need to understand how the overall organizational goals align with and support their individual values and goals. Second, leadership needs to ensure that goals are perceived to be obtainable, even if not easily achieved. Goals that require extraordinary effort are fine, if they are perceived as possible. However, if the goals are seen as being impossible, even with maximum effort, lack of motivation at best and de-motivation at worst are probable. Even if the goal is viewed as desirable, and the promised rewards exciting, if there is no belief that the goals are obtainable, there will be little intrinsic motivation to act. Finally, rewards must be tied to goal achievement, aligned with the individuals’ values, and perceived as being worth the effort required. It is important to note these rewards need not be monetary. They include the psychic rewards of community, membership, involvement, intellectual stimulation, feelings of accomplishment, and recognition, among other things.

Test expectancy theory against your own experience. I believe it will explain why you, and others in the organizations of which you are a part, sometimes are motivated and sometimes are not motivated to act. Does the goal align with our values and beliefs? Do we think the goal is achievable? Finally is the reward greater than the perceived cost of the effort? If the answer to all three is yes, internal motivation should be released. If the answer to any of the questions is no, that is where management attention is most urgently needed.

What is organizational excellence?

I suppose one of the foundational elements I need to establish for this blog is what I mean by organizational excellence. Often in our society organizational excellence is measured primarily, if not solely, by the bottom line. Quite often, at least for publicly traded companies, this myopic definition is shorted in time to a quarter’s performance at worst or a fiscal year at best.

There is no doubt, at least for organizations that are businesses, that profitability is one key measure of excellence. In my mind, however focusing only on that is insufficient. Is profitability being gained today at the expense of future performance? Is profitability gained through unethical treatment of employees, the greater community, the environment? The interaction of an organization with all of its stakeholders, not just shareholders, certainly needs to be considered in defining organizational excellence. Further, for many organizations, profit is not an objective, so using that as a measure of excellence is failed from the beginning. A broader meaning for the term is required.

One of my favorite theorists on the topic of organizational excellence and leadership is P.B. Vaill. If you are not familiar with his work, I would strongly recommend sampling some of his writing. In a journal article written on the broader topic of high performing systems (excellent organizations fitting in as a subset of that broader group), Vaill stated that a high performance system must meet one or more of the following criteria:
· They are performing excellently against a known external standard;
· They are performing excellently against what is assumed to be their potential level of performance;
· They are performing excellently in relationship to where they were at some earlier point in time;
· They are judged by informed observers to be doing substantially better qualitatively than other comparable systems;
· They are doing whatever they do with significantly less resources than is assumed are needed to do what they do;
· They are perceived as exemplars of the way to do whatever they do, and thus they become a source of ideals for the culture within which they exist; or
· They are the only organizations that have been able to do what they do at all.

(Vaill, P. B. (1982). The purposing of high performance systems. Organizational Dynamics. Autumn, 23 – 39.)

Two more of my favorite authors on this topic are J.R. Katzenbach and D. K. Smith. In their seminal work on high performing teams in excellent organizations (The wisdom of teams: Creating the high-performance organization), they identified six characteristics of excellent organizations:
· They have balanced performance results that benefit all of the primary constituencies of the team: customers, employees, and shareholders/owners;
· They maintain clear, challenging aspirations;
· They enjoy committed and focused leadership;
· They have a dedicated work force dedicated to productivity and learning;
· Skill-based performance is a source of competitive advantage; and
· Within the organization, open communication and knowledge management exist.

(Katzenbach, J.R., Smith, D.K. (1994). The wisdom of teams: Creating the high-performance organization. New York: HarperCollins.)

While it is possible to debate the definition of excellent organization and cite various authors to support different perspectives, in this blog when I use this term or refer to organizational excellence, the characteristics espoused by Vaill and Katzenbach and Smith are the foundation upon which I will be building.

What do you think? What makes an organization excellent in your opinion?