What is Organisational Culture and why is it important?

The role of organizational culture in driving performance, retaining employees, and future-proofing your business is critical. As a leader, it's important to understand the culture of your organization and be able to change it if necessary. However, organizational culture can be elusive. A riddle summarizes this well: "Those who live it understand it, but can't see it, and those who don't live it can see it, but can't understand it." This riddle refers to culture, which is difficult to identify because it's taken for granted and considered normal. 

Organizational culture consists of values, norms, beliefs, and behaviours that are not questioned but are considered part of the normal routine. Although culture is reflected in rituals, routines, symbols, structures, and systems, much of what culture is resides beneath the surface, making it difficult to identify. 

Changing culture is difficult because people who are part of a particular organizational culture treat it as obvious and normal, making it challenging to identify and change. Furthermore, people may resist culture change because it threatens their sense of self and normalcy. However, culture change is not impossible, but it's essential to determine whether it's necessary before attempting to change it.

In this article, I will explore the reasons why organizational culture is essential for leaders despite its difficulty in identification and influence. 

•  A strong culture can provide a competitive edge for an organization. 

•  A strong culture can hinder organizational agility. 

•  Organizational culture plays a crucial role in preventing unethical conduct and corporate scandals. 

Netflix is an example of a company that has successfully leveraged its innovative and high-performance culture to achieve strategic success. To maintain its culture amidst growth, Netflix created a manifesto that outlines the desired behaviour of its employees based on its core philosophy. 

Organizational culture is difficult to replicate and can provide a significant competitive advantage. However, research indicates that leadership teams often do not pay enough attention to it, leading to post-merger integration failures due to culture clashes. Lastly, organizational culture plays a vital role in preventing unethical behaviour and corporate scandals, although it remains a challenge for management to influence it. 

In summary, organizational culture is critical for leaders due to its potential to provide competitive advantage, hinder organizational change, and prevent unethical conduct and corporate scandals.