Organizational Culture – WHAT is it?

“Things are simply not going well, me and my co-founder speak different languages, it seems.” – I`ve heard that three times since the beginning of the year. It is now 8 months, not more. And to add up to all this, new articles painting vivid pictures of what it means to be an entrepreneur pop out in the media daily. They emphasize on facts like running your own business not only means you are doomed to be short on sleep and money forever, but it is simply super mega nano sucky. And you start wondering – how do the Big ones do it? You feel that you are doing EVERYTHING like them, or like it is told in the how-to books. But it is not really working the same way. And if everyone follows the good advice, why are not all BIG ones? And the next inevitable thought is – how far will I go (this time)?

So all the stress you just caused yourself is followed by an unconscious ‘calm-myself’ technique. Telling yourself that taking night shifts at the office will work out at the end, because ‘hard work always pays off’, right. You`ll get that funding that you`ve been trying to close on for the past months, it is going to happen! And you keep on going… working!

Have you wondered if there was another reason behind the growth of the Big ones, besides working hard (that you do need) and the money? Is it the fundraising that needs all of your initial effort and attention, from a founder`s side?

 

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Why do companies fail or succeed massively?

The reasons why diverse companies fail or succeed are being explored by organizational psychologists in their pursuit of models and ways to boost companies` effectiveness. Results show that the successfully developed organizations form something more than well-structured corporate and big market share strategies, or simply having technological advantages. These factors are all important indeed, however they turn out to be not enough to ensure sustainable growth in the fast-changing environment your company exists in. If there is no other internal glue to keep things together, your business is under constant thread.

Well, that glue has a name – organizational culture. Being neglected too often, that turns out to be a big reason for failure. So what`s needed to be done is for you, the founders, to direct purposeful efforts into forming organizational culture. That would include creating shared organizational values and goals to limit the collective uncertainty, bringing up common vision and establishing social internal order by formulating norms, valid for all and creating a community.

And all of this, as simple as it sounds, is an ongoing and never-ending process. And it is not as simple. It all starts with becoming aware of its importance and understanding all components that organizational culture actually includes.

 

Why is organizational culture so important?

Organizational culture consists of taken for granted values, expectations, subconscious assumptions, jargon, unique in character and content symbolism, rules, collective memory. They all exist in every organization, regardless of size, type and field of operation. Its presence is often neglected and founders do not realize its functions to unite, ensure stability, integrate and motivate. Not being aware of that is the reason why so many do not understand its value and direct connection to organizational effectiveness.

 

Why is it so difficult for newly started ventures to survive the first 3?

There are multiple challenges that newly started ventures face in their first years of existence. They are in a process of forming their organizational structures, work flow and formalized models of internal communication, defining common organizational goals, distributing tasks, roles and responsibilities. They need to formalize recruitment, retention and personnel development practices, to create employee engagement and loyalty, to form group identity and motivational models. The founders are usually two or three people with different expertise who had an idea and a vision (not always a common one) on where they would like to be in 1, 2 or 10 years. An idea and a vision is not enough to create the needed sense of belonging and identification with the organization`s mission and purpose.So that all members are socially, emotionally and professionally satisfied and they work towards achieving the organizational goals with passion and dedication.

 

The newly started companies go through different stages of organizational change. What is in the beginning a very friendly environment turns quickly into business field that brings uncertainty and alienation with the growth of the company. That, on the other hand, creates fear and estrangement. Especially in the so called “Crisis of growth” moments. Often times when companies get funded and need to grow massively and quickly, things fall apart. The reason for that is the crisis that comes from not being able to align efforts and communicate the culture change. Or not change it and try to transfer the family type of culture. And that simply doesn`t work as the company has changed its needs. The good news is that organizational culture pulls it together and navigates all of these processes, if done properly.

 

So working off your balance sheet: difficult to understand and at the same time of an extreme importance, the organizational culture does deserve a bit more of your attention. It`s your choice after all.

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