What Kind of Culture Does Your Company Have?
Culture is a buzz word in the Human Capital and Human Resources world right now. Most would acknowledge its importance, yet struggle to really articulate what it is or measure how tangible it really is on the impact of a business. Culture is more than just nice phrases or terminology on your company website or wall - it does effect the health of your organization. Have you heard the saying : “Culture eats strategy for breakfast?”
Though understanding the culture of a company can be a complex task. One tool we like to use to is the Competing Values Framework (CVF), which classifies organizational cultures into four distinct types: Clan, Adhocracy, Market, and Hierarchy. These cultures are based on two dimensions: stability vs. flexibility and internal vs. external focus.
We appreciate this model for two reasons:
(i). It is clear and concise.
(ii). It is directly correlated to a company’s operating model.
Here, we delve into each of these cultures, assessing their strengths and drawbacks:
1. Clan Culture
Rooted in flexibility and an internal focus, Clan cultures are often compared to families. They emphasize collaboration, teamwork, and a shared vision. These cultures foster a strong sense of loyalty and prioritize employee development.
Pros:
Strong interpersonal relationships can drive commitment and engagement.
Promotes an environment of trust, leading to increased creativity and innovation.
Cons:
Decision-making processes may be slow due to the emphasis on consensus.
Personal conflicts can significantly affect the work environment.
In Malaysia, the collectivistic nature of the society aligns well with Clan cultures. However, potential issues can arise if employees' personal relationships hinder professional judgement.
2. Adhocracy Culture
Adhocracy cultures value flexibility and external focus. They thrive on innovation and are always ready to take on new challenges. This culture encourages risk-taking and emphasizes adaptability and dynamism.
Pros:
Promotes creativity and innovation.
Rapid response to market changes and industry trends.
Cons:
High levels of uncertainty and risk.
Potential for burnout due to the constant push for innovation.
This culture can be beneficial in the Southeast Asian region's fast-growing industries, such as technology. However, the high-risk environment may not be suitable for everyone.
3. Market Culture
With an emphasis on stability and external focus, Market cultures are competitive and results-driven. The primary focus is on accomplishing set goals, outperforming competitors, and achieving market dominance.
Pros:
Encourages high performance and achievement.
Clear understanding of goals and targets.
Cons:
Potential for a high-pressure environment, leading to increased stress.
Overemphasis on results may overshadow employee well-being.
In Southeast Asia's competitive business landscape, Market cultures can drive success. However, companies should be mindful of maintaining a balance between results and employee welfare.
4. Hierarchy Culture
Hierarchy cultures value stability, order, and an internal focus. They rely on structured environments with defined roles, standardized procedures, and clear chains of command.
Pros:
Clear expectations and processes promote efficiency.
Reduced risk due to emphasis on rules and regulations.
Cons:
Limited creativity due to rigid structures and systems.
Resistance to change may hinder adaptability and growth.
Hierarchy cultures align well with the high power distance characteristic in many Southeast Asian societies, such as Malaysia. However, this could stifle innovation and flexibility.
Understanding these cultures using the Competing Values Framework is essential as it can guide strategies to align with the workforce's cultural preferences, ultimately boosting productivity and engagement. No single culture is inherently superior; each has its strengths and drawbacks. The best fit depends on the specific context of the organization, its goals, industry, and broader societal norms.
Quite often, there are varying degrees of each culture and its elements within a company. Below is a sample result of a culture audit we conducted for a client we worked with.
In this instance, we found that the there was a strong alignment between the current culture of the workforce and the preferred culture of the company’s leadership. In other cases, if there were to be a misalignment or desired change - this is where we can come in to help.
Looking to find out what kind of culture your company has?
Ready to embark on a journey to transform your culture to further increase revenue and business impact?
Reach out to us - we are always ready with timely, tailored and trusted solutions.