Company Culture

Organisational culture affects business performance. Here’s how

Organisational culture

Organisational culture is a lot like the general smell in an elevator - if it’s neutral or pleasant, nobody tends to notice, but as soon as it heads over to the dark side (e.g. someone lets one rip when the ventilation system is on the fritz) everyone notices. In fact, it becomes the only thing you can think about until your floor mercifully arrives and you can escape the stinky and oppressive atmosphere you had to endure (and politely ignore) along with everyone else who was along for the same torturous ride. 

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Naturally, we all want to believe that our organisational culture comes out smelling like a metaphorical rose, but the truth of the matter is that there are always aspects of your company culture that can be addressed if your end goal is to affect business performance positively.

For the purpose of this article we’re going to break it down in terms of two of the four dominant organisational culture types, as described by Kim S. Cameron and Robert E. Quinn from the University of Michigan in the much-referenced Organizational Culture Assessment Instrument (OCAI), a validated research method to assess organisational culture in the modern business space.  

 

1. The hurdles and benefits of a clan culture

The clan culture is found in businesses with a close-knit, family-like feel. Most SMEs and startups have this atmosphere. Although it sounds like moonshine and roses, this type of culture has its pros and cons when it comes to business performance

On the positive end of the spectrum, a clan culture fosters: 

 

  • Happy productivity. Clan cultures are normally quite happy-go-lucky and positive and employee engagement is likely to be high. Because employees' needs are front and centre, morale is sky high and the workforce feels seen and valued - all great boosters for productivity. 
  • Open lines of communication. When a tribe feels connected, they share and work as a team. These wide-open lines of communication are great for keeping everyone on the same page. 
  • Inclusive feedback and idea-sharing. Clan cultures are known for fostering a blue-sky atmosphere in which people are free to share ideas and come up with wild new initiatives - not every idea may be a million-dollar notion, but you never know!
  • A healthy work environment. Welcoming, nurturing office spaces are good for the health and wellbeing of your team, leading to fewer absences and improved overall productivity. 

On the flipside, the cons of the clan culture are the following: 

 

  • A lot of noise. Open lines of communication can lead to empty over-collaboration and time wasting if you don't keep it in check.
     
  • A lack of boundaries. In the clan culture vibe, it can be easy to slip into the role of buddy rather than boss when you're trying to build rapport with your staff. However, boundaries are important if you wish to guide and nurture. 
  • Clashes of strong personalities. When you encourage people to play on their individuality, clashes can occur that may lead to rifts in teams if you don't address it with the proper tact.
  • Not-so-appropriate behaviour. In a space where the rule is 'there are no rules', some employees may take this to mean that they have free rein in terms of office shenanigans, which could disrupt overall productivity and lead to harassment and discrimination cases in a worst-case scenario. 

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2. The pros and cons of an adhocracy culture

Businesses with an adhocracy culture are known for having an adaptive mindset and flexible working conditions that lends itself well to dynamic production and bleeding-edge innovation. Things progress at lightning speed in these environments, which is why these businesses are normally first to market with all sorts of exciting goods and services. 

When viewed from a positive angle, an adhocracy culture is known for: 

 

  • Frequent challenges. In an adaptive environment, employees are met with frequent challenges that keep them moving and inspired. 
  • Dynamic ways of working. Adhocratic spaces are known to offer employees dynamic ways of working flexi-hours, remote set-ups, etc. This is great for people who can manage their time well and like to have the freedom to structure their own schedule. 
  • Future-focussed atmosphere. Creativity flourishes in an environment that is focussed on the future and always on the lookout for the Next Big Thing. 
  • Innovative creation. Environments like these are a great space for forward-thinking employees who like to be on the forefront of innovation and inspire the same drive in their contemporaries. 

However, there are also a few negative aspects to consider. These include: 

 

  • Frequent hurdles. Adaptive environments may be inspiring, but it can also be completely overwhelming for individuals who are still learning the ropes. As such many apprentices and greenhorns find an adhocratic environment to be too much to handle.
     
  • A lack of stability. It's very important to hire for cultural fit in an adhocracy culture - some employees may not fare well in an environment where there is a lack of structure, which will be noticeable in their productivity. 
  • A near-impossible balancing act. When you're always shifting focus from one Big Thing to the next, teamwork has to be flawless if you wish to keep any of those precious balls from dropping. This can be too much pressure for certain employees, which could lead to unwanted talent churn if the recruitment process is not up to snuff. 
  • Unhealthy competition. Cutting-edge environments can bring out the dog-eat-dog mentality in Type A personalities, which can lead to unhealthy competition and a toxic work environment. 

Fascinating stuff, right? Look out for Part II, in which we’ll discuss the benefits and drawbacks of a hierarchy culture, as well as the yays and urghs of a market culture. 

If you’re experiencing that niggling feeling that suggests it’s about time you address your organisational culture in order to promote behaviours that contribute to the kind of atmosphere you’d like to establish at your company, now is the time to heed your intuition.

Take a look at our innovative employee engagement platform - this SaaS tool leverages employee recognition and rewards to boost organisational culture in line with your operational objectives. Plus, we’ll let you try it on for size completely FREE of charge. Simply click the button below to get started. 

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