Researchers estimate that toxic workplaces costs companies almost $14,000 per employee due to loss of productivity, with unhappy employees projecting their frustrations onto clients and customers, and the overall quality of work decreasing. In Australia the national resignation rate has seen the sharpest rise in five years and 67% of Australian employers say they have seen an increase in staff turnover, with many experiencing the flow on effect of loss of productivity and revenue. Replacing an employee can cost as much as double their annual wage.
Organisational Culture is the pattern of behaviour that determines how things are done. “In a sense, culture is to a group what personality character is to an individual. We can see the behaviour that results, but often we cannot see the forces underneath that cause certain kinds of behaviour. Yet, just as our personality and character guide and constrain our behaviour, so does culture guide and constrain the behaviour of members of a group through the shared norms that are held in that group” Edgar Schein.
A strong company culture permeates throughout an organisation. It forms the foundation for company growth and enables employees to do what they do best and creates an environment for high performing teams to flourish, giving them a competitive edge. But research shows the faster a company grows and the larger it grows, the more susceptible it is to toxic behaviour and the higher chance that foundational values will fade. Neglected relationships, inconsistent or overtly demanding leadership and reactive planning are all factors that lead to unsustainable growth patterns.
If the organisational culture is the personality of an organisation, then the organisational climate is akin to the mood that the company is in. As Schein describes, it is the perception and attitudes of the people within the organisation, and the experiences of the clients and visitors. There can be differentiation between the climate throughout the culture and it can be traced to such things as differences in leadership, workload expectation and perceptions of policies and procedures. A climate is created by what leaders do, what circumstances apply and can evolve quickly. It is not surprising therefore that research by Rapid Context found that many leaders have limited visibility about whether the climate of the workplaces in which they operate are on a trajectory for a positive or negative organisational culture. Further, if there is a negative culture, they don’t necessarily know how, or where, to start repairing it.
In 2019 leading organisations know that culture is more than exciting benefits and flashy perks. It is the beliefs and behaviours that form the foundation of your company. Those who acknowledge and embrace evolving requirements needed to bridge generational gaps, redefine roles to enable accessibility and flexibility and, ensure a balance of business, professional and personal growth across their whole enterprise.
Research shows that many companies are experiencing deep cultural issues, ignoring what are actually systemic problems and therefore not engaging with the right support.
Some of the signs your company is experiencing a cultural issue:
Problems take too long to solve and keep recurring, wasting time and resources
Too many conflicting priorities
Slow to react to systemic changes
Low retention rates
Not meeting diversity targets
The organisation is not performing as well as it should – growth has slowed down.
The majority of people are excluded from any decision making, reducing input and the potential for quick adaption
Leaders are not adaptable or flexible
Roles are rigid and collaboration is awkward
High rates of unacceptable behaviour, such as harassment and backlash.
Low employee engagement rates
There are inconsistent expectations and disagreements on workplace values and practices.
Rapid Context can help you understand and make targeted changes to your organisation. We use high quality defensible research to meet urgent needs without compromising rigor. We assist organisations in solving sensitive and complex problems related to policy change or development, reform, culture change, or targeted issues such as leadership, workplace bullying and diversity and inclusion. Our experienced team of specialists analyse issues using different lenses and vantage points – not off the shelf models - to provide a more complete appreciation of the problem and develop solutions that are tailored to your specific context.
Sara Edwards is the General Manager of People and Culture at Rapid Context. She specialises in flexible workforces, organisational culture, and education and training. She works with clients across industries to develop successful flexible workforces, analyse and report on organisational culture and assist with team development.