A recent revealed that most companies look inward for their innovation spark. The Deloitte Innovation Study 2021 surveyed business leaders from the fields of innovation, technology and business functions from a diverse set of industries, sizes and business models. The study reported that many programs kick off their process by looking internally for opportunities to optimise existing business operations. While 40% of looked internally only 15% relied on brainstorming for new ideas as their starting point. Innovation has remained a buzzword for a while now. The big question is whether your organization culture supports innovation. We’ll decode this by defining Organizational Culture.

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

Are you looking for consultation on Organisational Culture?

Boston Consulting Group’s annual ranking of the world’s most innovative companies in 2021 saw Apple capture the top spot. Other companies in the top 10 also included Microsoft, Samsung, Sony and Pfizer. The survey reported that effective leaders foster an organizational culture that grants prestige to innovation roles and values openness and thoughtful challenges to the status quo. They assign their very best talent, including true business builders, to the most ambitious innovation challenges. Two themes are common to these five pivotal capabilities: exercising leadership and bringing teams together. A strategy-led, CEO-driven, data-informed innovation culture is central to putting the five pieces in place. A cross- functional, customer-centric organizational approach brings multi-capability innovation teams together to share ideas and develop insights.

It’s important to understand why you want to innovate and conduct a needs analysis. Innovation itself should never be the goal. It’s a tool or a means to an end that you can use to bring your organization closer towards your goals. For instance your goal could be meeting customer needs by improving your products or creating new ones or success in a new market. In none of these cases do you innovate for the sake of innovation. Instead, you look to innovate in order to be more successful.  This is why you need to start from a proper needs analysis. It’s equally important to be clear on what kind of innovation you need.

Chasing the wrong kind of innovation is not only ineffective but can even be counter-productive. If your goal is to improve your existing products, you would most likely do this via incremental innovation. This means gradually improving your existing products. With this kind of innovation, you are, usually, largely following the same processes you already have in place. When your goal is disruptive innovation, to create something that doesn’t exist yet, incremental innovation would be counter-productive. With disruptive innovation, you might create a product that doesn’t exist at all, or even a completely new market. That product, however, might require further development, or might be fairly expensive to produce. You wouldn’t get here by strictly following existing processes but by trying new things and accepting - even welcoming - mistakes.

position. At this stage, you should have already done your competitor analysis but understanding your position goes deeper than that. It requires you to have an honest and analytical - even critical - look into your own working practices. This all comes down to truly understanding your Organizational Culture. The best and the easiest way to understand your current reality is to compile data through an objective tool like our  Organizational Culture Scan. It gives you a snapshot of your Organizational Culture as a whole, and also allows you to divide and measure it in sub-cultures. This means that in addition to the overall culture, you can measure the cultures of different teams, departments, regional or country offices or other functions that you deem necessary. Sub-cultures allow you to get an honest starting point for your transformation project and also enable you to fine-tune where necessary. This is absolutely crucial for larger organizations.

Reach out to us to find out about how our programs and solutions can help you build the optimal Organizational Culture to meet your innovation goals.

A 2021 PWC survey revealed that a strong Organizational Culture drives better business outcomes. The overriding consensus is that a 69% of senior leadership surveyed credit much of their success during the pandemic to culture. Almost 70% who said that their organizations were able to adapt over the past year also reported that their culture has been a source of competitive advantage. Interestingly 67% of survey respondents said culture is more important than strategy or operations. But there’s more than just one type of Organizational Culture. We’ll start by defining Organizational Culture.

Are you looking for consultation on the perfect Organizational Culture for your company?

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how to things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

Optimal culture: is the organizational culture that best supports your organization's strategy in order to be successful. It should take into account the restrictions – such as rules, legislation, economy, that apply to your organization and the strategy your organization has.. It is crucial to keep in mind that optimal culture should always be tailored for each organization, or function of an organization. It is never a good idea to try to apply the culture of another organization as the optimal culture for yours.

Actual culture: should be the basis for all Organizational Culture change projects. It is the culture your organization or department currently has. In order to guarantee accuracy and objectivity, actual culture should be measured using a valid and objective method, such as our Multi-Focus Model^TM on Organizational Culture. It is an easy to use, yet systematic and data-driven, tool based on sound, scientific research that thousands of global organizations have relied on for shaping their culture, since 1985.

Perceived culture: the culture people in the organization think it has. It is also the culture you think your organization has. You can get more insight on the perceived culture by asking others and this might change your perception of your organization's culture. However, due to the subjective nature of perceived culture, it is not useful for aligning your culture with your strategy as you will most likely not get the complete and correct picture about your organization's actual culture. Implementing changes based on perceived culture alone, without measuring the actual culture, is one of the reasons why many Organizational Culture change projects fail.

Ideal work environment: is measured exactly the same way as actual culture, except that instead of asking questions about the current work environment, the respondents describe the Organizational Culture they would love to have. Measuring Ideal work environment gives valuable information about the preferences of the people working in the organization. It can offer insights into how the targets for Optimal culture should be set and how difficult it will be to reach them.

Our Organizational Culture Scan allows you to divide your organization into subcultures. A subculture covers a section within the organization that should have their own specified culture. Subcultures can be based on a variety of factors such as function within the company, department or geographical location.

Find out how Hofstede Insights can help you implement a more active approach to your organizational culture.

The second edition of Culture Insights, a new video podcast series from Hofstede Insights India addressed a challenge many large organizations are confronted with. Culture Insights will explore evolving trends and the multiple facets of Organizational Culture. At Hofstede Insights we are focused on aligning Organizational Culture with Business Strategy and Purpose.  The second edition featured Akhilesh Mandal (Managing Director India, Hofstede Insights) in conversation with Bhaskar Pramanik (Former Chairman Microsoft India / Former Independent Director – SBI / Independent Director & Advisory Board Member). Bhaskar is a veteran industry leader with four decades of experience and sits on multiple boards. He advises organizations and leaders and is passionate about ESG that is becoming an integral element in future business strategies of Corporates across the world. Bhaskar is one of India’s ESG experts and in this insightful tete-a-tete, Bhaskar and Akhilesh discuss the significance of ESG and its interlinkage with Organizational Culture.  Even before we bring you the excerpts from this insightful tete-a-tete, let’s define Organizational culture and bring you up to speed with ESG.

Are you looking for consultation on the perfect Organizational Culture for your company?

Not long ago, ESG was just a buzzword, investors looked at it as a ‘good to have’. Not anymore. A 2019 survey by Morgan Stanley confirmed that ESG investing is becoming increasingly popular.  More than 8 in 10 U.S. individual investors (85%) now express interest in sustainable investing, while half take part in at least one sustainable investing activity. ESG is Environmental, Social and Governance (Corporate Governance). A growing number of Socially responsible investors are now looking at the ESG factor of their investments and no longer just the classic risk vs. return scenarios for future investments.

ESG combines Environmental, Social and Governance factors. Environment includes everything from a company’s attitude towards climate change to the company’s use of renewable energy and how it manages waste. In certain cases it also involves direct environmental impact from a company’s operations such as deforestation or water management. The key area under the Social part of ESG is employee relations. For e.g.: do you pay your employees a fair wage or do you provide employees amenities like a cafeteria or a childcare centre on site. Diversity and inclusion are also under the scanner of many investors. Governance relates to the company’s management and how they respond to the interests of the external stakeholders like consumers and the wider community where your manufacturing facility or Corporate HQ is located. In many cases a strong and vibrant organisational culture improves a company’s ESG evaluation.

When investors look at social criteria, they're interested in how a company manages its relationships with employees, suppliers, customers, and communities where it operates.

For example, investors may look at whether a company provides a safe and healthy working environment for its employees, or if it donates time, money, or resources to give back to the communities where it operates.

Unsafe working conditions or a disregard for community or customer concerns are tangible risks for many companies. On the flip side, companies that treat employees well and give back to society are seen as less risky.

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how to things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

Reach out to us to discuss the challenges faced by your organization. We can help you build an optimal Organizational culture.

The COVID-19 induced pandemic might have been the catalyst but ESG has also come to the fore because of challenges like climate change and environmental challenges that organizations across the world are grappling with. Companies now realise it’s important to embed ESG into the strategy of the company. The other driver for ESG in India, is the Indian government’s mandate to the top 1000 listed companies in India to report on their ESG initiatives.

“If your sole purpose is profit you will struggle to create an agile and resilient business”

Bhaskar believes that it’s compliance – especially given the government’s ESG directive, that’s driving ESG in India currently but there are many leaders who have gone beyond just compliance. “There are many leaders of the pack who have embraced sustainability as part of their overall strategy. At least 20% of large and small companies have focused on governance and used CSR from a social perspective to meet their social requirements”. From environmentally conscious consumers to investors to employees all stakeholders are gradually driving companies to move on from just compliance requirements to ensuring it’s part of their overall strategy.

Companies are relooking at their purpose. What is the difference between purpose and vision/mission? While mission/vision is your inward perception about yourself,  purpose is how the external world perceives you or how you would like external stakeholders to perceive you.  Purpose revolves around what you can contribute to the world and what the world will miss out if you’re not there. “I’ve seen a lot of companies redefine their purpose over the last 4-5 years. For instance Reckitt Benckiser went from being a product company to a company that is committed a cleaner and healthier world thanks to the foresight and leadership of their new CEO. It’s opened up a whole new opportunity for the company. Their focus is now to ensure that their customers take the best possible care of themselves”.

It all starts with the ‘Product Strategy’ of the company that includes everything from choosing the products you will manufacture and the services you will offer. You then have to look at your People and Culture; your teams have to understand your ESG strategy, what needs to be done. The key element here is ‘collaborative engagement’ – it’s what people do without being told. It has to be instinctive. These initiatives have to be reinforced with performance metrics; it's important to establish whether employees achieve their ESG goals too. It has to be inbuilt into processes. Environment is a critical element – for instance should you only work with vendors who are also conscious of their ESG goals  or should you choose vendors who give you the cheapest prices without concern for the environment? Ultimately it’s important how you position yourself.

Millennials and Gen Z audiences – whether they are your employees or consumers, are much more conscious about sustainability and governance. It’s all part of a big ESG ecosystem.

ESG has evolved into a massive ecosystem. There are the ‘Big Four’ accounting companies that can help you identify the areas that align with your strategy and develop the metrics. You also have the management consulting companies that can help you identify your strategy and areas you hadn’t though about; Blue sky thinking that could determine changes in your product portfolio. There are also boutique companies that can help you with reporting. This ecosystem also includes financial companies that can help with the right investments and also help with carbon offsets. While Industry Associations and regulatory bodies help organizations in transparency with their stakeholders.

Success of any strategy or approach is a combination of culture that leads to collaborative engagement and the science of execution. As demographics change, leadership behaviour plays a significant role in creating and sustaining a culture. Bhaskar believes that organizations like Hofstede Insights have a key role in influencing companies that are embarking on an ESG journey starting with defining their current vision and mission and crafting a purpose that in-builds ESG into it.

Stay tuned for the next edition of Culture Insights and reach out to us to discuss how you can future proof your company with our structured programs that can help you meet your ESG goals.

As a global firm that works with leading corporates in the Organizational Culture space, there’s one question that we get asked a lot – “What is the perfect Organizational Culture?” In March 2022, a report from the company review site Comparably revealed its annual rankings of the companies with the best workplace culture. This ranking is based on anonymous employee ratings for 70,000 companies shared on their site over a 12-month period between March 2021 and March 2022. Even before we dive into optimal organizational culture, let’s first define Organizational Culture.

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

Are you looking for consultation on Organisational Culture?

An organization’s culture is often reflected in its mission statement and leadership, evident in how managers treat employees and the benefits offered. Comparably considered nearly 20 different topics that define a positive workplace culture including compensation, work-life balance and professional development opportunities. Microsoft emerged as the no:1 global company with the best workplace culture in Comparably’s 2022 rankings. According to Comparably, companies that finished in the top 50 in their survey aren’t being reactive to employees’ needs but are setting the rules for how to navigate the new world of work we’re living in. These winners were determined based on employee feedback to a combination of workplace culture questions categories such as compensation, leadership and work-life balance.

A look at these successful companies will reveal that there’s no one-size-fits-all silver bullet. We believe that it’s best to shape an Organizational Culture that supports your strategy. In order to know what the best Organisational Culture is for your organisation, you have to start with your strategy. As an organisation, you might decide to put emphasis on:

• Promoting innovation
• Growing within your current market
• Following strict safety guidelines
• Being customer focused
• Aiming for a successful M&A
• Looking to reduce production costs
• Protecting confidential information
• Sustainability
• Employee focus

The key step is to zero in on your point of focus. Once you’ve done that you have to direct your Organisational Culture according to your strategy to reach that goal. This will play out differently for different organizations depending on the industry, the size of the organization and the National Cultures.

• Define your strategy:this is the critical step. You need to clearly define your strategy even before you attempt to  align your Organizational Culture with your strategy
• Understand your current Organizational Culture:assess your current Organizational Culture with an objective process that seeks inputs from different areas of your company
• Identify areas of improvement:Once you have an overview of your current Organizational Culture and have defined your strategy you are ready to identify the gaps where improvements could be made.
• Create an action plan:once you’ve acquired the big picture. There are likely to be multiple gaps to address, which is why we suggest that you focus on the most significant gaps.
• Monitor the progress:In order to ensure consistent monitoring, we recommend creating what we call Culture Squads. This means tasking a group of people with driving and monitoring change. Hofstede Insights can mentor and train your Culture Squads to meet these objectives.
• Re-evaluate regularly:Organizational Culture is a dynamic process. Consider evaluating and re-evaluating your Organisational Culture on a regular basis in order to make sure you are continuously moving in the right direction.

Reach out to us to find out about how our programs and solutions can help you build the optimal Organizational Culture

A global survey of business leaders and employees by PWC in 2021 revealed that the pandemic has revealed that Organizational culture played a big part in lending companies a competitive edge during this challenging phase. At Hofstede Insights, we believe that leaders determine a great deal of what happens in an organization. This is particularly true while shaping the culture of an organization. Any significant change starts with the leadership walking the talk. This has a trickle-down effect on how any serious attempt at change is effective across the organization and through rank and file. We’ll start by defining Organizational Culture even before we outline the role of a company’s leadership in building an optimal culture.

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

Are you looking for consultation on Organisational Culture?

In 2021 PWC surveyed 3,200 leaders and employees in over 40 countries. The overriding consensus is that a strong Organizational Culture drives better business outcomes. 69% of senior leadership surveyed credit much of their success during the pandemic to culture. More than two-thirds of respondents believe that a strong Organizational Culture helps change initiatives happen. Similarly, almost 70% who said that their organisations were able to adapt over the past year also reported that their culture has been a source of competitive advantage. Interestingly 67% of survey respondents said culture is more important than strategy or operations.

Leadership practices can be both positive and detrimental to the overall success of the organisation. When leaders walk the talk and align their actions with the strategic vision of the organisation, they will explicitly and implicitly encourage their employees to do the same. One great way to focus on this is to connect the organisational practices with the strategy. If leadership is able to show they are carrying out practices that align with the strategy, others will follow their lead.  If an organisation is looking to implement a more easy-going culture and wants to implement a less formal dress code, the management team should be the first group to take action. If they continue to wear formal suits, it might discourage the rest of the team from switching to the new dress code. While you might see grass roots change occasionally, most lasting change comes from the positions of leadership where change can be aligned with the overall vision of the organisation. It’s the leadership team that sets the organisational strategy and decides upon the Optimal Culture.

Indirect Change:

This sort of change occurs when modifications are made to current organization practices.  Changed organization practices ‘indirectly’ changes behaviour of people within the organization. These changes can be realized at various layers of the Culture ‘Onion’ below

A good example is change in Rewards & Sanctions systems. This promotes certain behaviours and discourages some others. This indirectly changes people’s behaviour and consequently changes the culture of the organization.

Top leadership behaviour  plays a crucial role in shaping an organization’s culture.

While changing systems and processes indirectly changes behaviours of most people in an organization, top management behaviour change can only happen directly.  In other words leaders themselves need to ensure that they are ‘walking the talk’ i.e. their behaviour is in alignment with the behaviour that is required to build the “optimal Culture” they want to build. To measure this fit, we use a tool called Executive Match that provides detailed insights into how well a leader aligns with the Optimal Culture of the organisation according to their colleagues, subordinates and themselves. Hofstede Insights provides Executive Coaching services which have been found to be the most effective method to align top leadership behaviour .

Reach out to us to find out about how our programs and solutions can help in your company’s transformation journey.