Successful organisations are characterised by strong values and a strong guiding vision that communicates what behaviour is appropriate and what is not. If these values are widely shared across the organisation and are reflected in the everyday actions of employees at all levels, both individually and collectively, then there is a strong culture.
The report, Vision and Values: organisational culture and values as a source of competitive advantage, builds on earlier CIPD research into people and performance and explores organisational culture issues in detail. Understanding the People and Performance Link: unlocking the black box identified a number of issues as being particularly important to the relationship between how people are managed and the performance of the business. Evidence was provided to show that organisational success is dependent on having the right mix of HR policies in place. The ability, motivation and opportunity (AMO) model supports the theory that business success is based on the capacity of organisations:
- to recruit people with the right ability
- to motivate them
- to provide them with the opportunities to use their skills in well-designed jobs.
Vision and Value includes a number of case histories from the research companies, implications for policy and practice and details of how some aspects of vision and values can be measured and managed.
What is organisational culture?
Organisational culture is a system of shared values and beliefs about what is important, what behaviours are appropriate and about feelings and relationships internally and externally. Values and cultures need to be unique to the organisation, widely shared and reflected in daily practice and relevant to the company purpose and strategy. But there is no single best culture.
The research also found that it's important for organisations to create the kind of environment or culture where the positive managerial behaviours of listening, coaching, guiding, involving and problem-solving are actively encouraged and reinforced. This is where HR policy is critical as it reflects and reinforces organisational values and culture.
The 'Big Idea'
Many of the companies studied focus on a 'Big Idea' or a few key words that simply express what the purpose or values of the organisation are, how the organisation works and what it's like to work there. But the research shows clearly that the 'Big Idea' on its own isn't enough. To build commitment and drive improved performance it needs to be:
- embedded and understood across the organisation
- integrated into relationships between stakeholders
- enduring, built around or on a legacy of past success
- habitual, with behaviours repeated, collective and routine.
The research also clearly shows a link between strong shared values and high commitment. Where strongly shared values can be demonstrated, people are more likely to be satisfied, displaying higher levels of organisational commitment, lower quit rates, greater customer satisfaction, and lower levels of dissent or dissatisfaction over levels of pay.
This is a summary of the CIPD Executive Briefing, Vision and Values: organisational culture and values as a source of competitive advantage, by John Purcell, Sue Hutchinson, Nick Kinnie, Juani Swart and Bruce Rayton. For further details, visit the CIPD bookstore.