Contact Manager


+64 21 620 456

16 Kauri Street, Woburn, Hutt City, New Zealand


The link between Culture and performance

Recent research has shown that culture, especially the development of trust has a far greater influence over the fortunes and failures of companies from day-to-day and year than the official hierarchy. Culture may be a ‘soft’ subject but this doesn’t mean it isn’t important, indeed it is more important than most of the ‘harder’ subject that managers spend most of their time on.

One of the secrets of the Virtual Group’s Culture Process is that we have found hard empirical ways of measuring the appropriate Culture for your organisation.

In high trust organisations, transaction costs are far lower. For example, if people in different departments or regions (say, marketing and sales, or Asia and Europe) feel enough trust to speak candidly together about their impressions of the market, and the quality of work processes, and the way to improve work, then they have much more opportunity to innovate and think together.

The organisation chart basically shows you the formal rules. But to understand the organisation and how it actually works, you need to understand the human network and values. For people to be able to break through the formal organisation chart and act in ways that make sense for the customer, people have to be given the power and authority to do this. Without this authority the formal structures will be like glue to hold people to their seats and stop them from being effective. In the BNZ when we wanted to free people we found that giving them a badge which said : “Just do it” was really important in making people feel that they had the power and authority to break free.

The form and substance of trust in an organisation is as palatable and influential on performance as a magnetic field is on a cluster of iron filings.

Companies can exert far greater control over their competitiveness and their future than most researchers have ever thought possible, by putting the right people in the right places and fostering new opportunities for them to talk to each other.

Value Statement are used to test all business decisions against. They also serve as a measure of acceptable behaviour and desired characteristics.

As noted above values influence behaviours, however behaviours also influence values. To change culture we need to change behaviours to match those required for the chosen Value Proposition. Its important to realise that behaviours are actions rather than words and will therefore be influenced far more by what people do than what they say. For example when George Hickton was manager of the Department of Social Welfare, Income Support, he took his top team up to run the Otara Office for a week. This single action would have been far more important to communicating that ‘customers and front line are important’ than any number of words and discussion workshops.

Culture and customer service

Until recently most management books stressed that the most important thing was customer service, today more and more are recognising that culture is at least as important because if people feel good about themselves and what they are doing they will do a better job of taking care of the customer.

When we (you, me, everybody) genuinely approve of ourselves, we can afford to be responsive to the needs and wants of others. People who feel powerless, or who don't think they are valued, don't care much about the problems of others. The secret is to create an environment in which people feel they're important to the company's success.

When it comes to Culture small things matter

When it comes to culture small things are far more important than most managers believe. For example, I was working with a major inner city printing company that was trying to introduce more customer service. The whole thing was just words and hot air as long as managers reserved three out of the five car parks for themselves, leaving only two (in a crowded street) for customers.

Back to the main text

Web site design by Web Success CONTACT   |   make an enquiry   |   search   |   site map   |   home