Organizational culture has the power to determine a company’s destiny. It involves the employee’s commitment with the strategy proposed by leaders within the organization. It is a process that involves the effort and satisfaction people demonstrate when carrying out their tasks, supporting (or not) the strategic plan put in place by managers.
Various studies, such as the one conducted by Warwick University have shown that a well defined culture can positively influence the workplace environment and thus helps to attract and retain the top talent. This particular study concluded that happy employees are 12% more productive than those who are unsatisfied.
So what do successful companies have in common? A clear culture that inspires employees and serves as a guide to their day-to-day work. Once you hire people who are aligned with the organization’s culture and goals, and manage them accordingly, you are more likely to have an engaged workforce that is dedicated to delivering the best results possible.
But what is organizational culture?
Organizational culture is the collection of values, behaviors, expectations and practices that inform the decisions and actions of every member of the organization. It contributes to the construction of the organizational identity, which defines how the company will communicate, relate, behave and interact with the public and the employees.
A functional organizational culture exemplifies positive traits that will improve performance, while a dysfunctional culture might unknowingly reinforce negative traits that can jeopardize the company’s future. And this is important to note because the culture is created through consistent and authentic behaviours, and not what is communicated externally – in short, you have to walk the talk.
The culture is visible in tangible ways, and thus it can be observed by how a CEO responds to a crisis, how a team adapts to a client’s demands, or how a leader manages infractions committed by an employee.
Another key piece in organizational culture is the organization’s purpose. The purpose must be clear to all, so that the employees know which direction they must work towards, and more importantly, why they are working towards it. This should be old news by now: a company’s “why”, the reason the organization exists, drives the strategic decisions and the company’s culture as well.
And in order to maintain a strong organizational culture, it needs to be a primary consideration during any hiring process, after all, those who are hired have a greater chance at succeeding and being satisfied if they are aligned to the company’s culture.
Why is organizational culture important?
To put it in simple terms, companies with clear organizational cultures tend to attract and retain the top talent in the market. A clear culture and alignment with the company’s strategy strengthen the team, which works towards a common goal: the organization’s success.
Culture impacts the employee’s experience in the company, which directly affects their level of commitment and thus, their performance.
The more work leaders put into creating and communicating an effective culture, the more their teams will appreciate their efforts and contribute to the same objectives. When leaders’ behaviors and actions align with the organizational culture, they are setting an example for all employees – and the same applies when they are not aligned, as they are demonstrating that the lived culture is different from the “official” one.
Sometimes employees might not be able to define a company’s culture, but they can clearly understand what makes an organization a good place to work or an unpleasant experience. However, the benefits of an organizational culture are only accessible when it is clearly communicated and known throughout the company. This ensures that employees know which behaviors are expected of them and that candidates applying for roles also know what to expect in terms of responsibilities and values. When the values and behaviors the company upholds are unknown, employees can be unsure of their own worth within the company, which creates insecurities that are sure to affect performance.
How can technology help companies hire the right people and maintain employees’ engagement?
Technological advancements and digital transformation are providing leaders with new tools to face some of the most important tasks within the workplace: upholding the organizational culture and maintaining employees’ engagement.
The use of artificial intelligence technologies in hiring processes, for example, can allow companies to collect and analyze an incredible amount of data in a short amount of time, making the screening process on a large scale possible and increasing the chances of finding candidates that match the company’s values.
Taking cultural fit into account when hiring is important because if the candidate is aligned with the organizational culture, there is a higher chance they will thrive and remain within the company for a longer period of time. This in turn contributes to a lower turnover rate and an overall more pleasant working environment for all employees.
Another benefit of adopting new technologies to support internal processes is the potential of lowering operational costs and increasing productivity. By making the Human Resources department more agile, there is more time available to invest in understanding and meeting the needs of employees in their development and the construction of a strong organizational culture.
Case Study: AI in service of organizational culture
One of the biggest beverage producers in the world has been using Artificial Intelligence in hiring processes and talent management since 2018.
Rocketmat is the company responsible for the project that aims to identify the behaviors and competencies necessary in employees working in beverage factories through the use of AI technology.
In order to do so, our specialized team modeled two types of algorithms capable of mapping the individual traits of each employee, to comprehend the levels of soft and hard skills in different teams, departments and beverage factory units.
In total, approximately 40 thousand professionals (with anonymized data) were analyzed, which helped conceive an algorithm capable of identifying and predicting gaps in competencies. This helped HR and leaders construct talent development programs that would target these gaps and contribute to the company’s overall growth.
Another algorithm was implemented in the hiring process, in order to identify candidates that have traits which align with the ones required by the company, resulting in more effective hiring decisions and, as a bonus, a more diverse workforce.