Corporate Culture and Its Relation to Organizational Development and Operational Excellence

Operational Excellence Series is an informative set of documents prepared by Simple and Pragmatic Consultancy

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What is this document about?

Competition in business-life obviously increasing.

A simple research shows that, most of the top-100 companies in the world 60 years ago are not in the list anymore.

Speed of change is increasing globally and companies need to adapt better than ever. Actually, adapting only helps survival.

Companies need to lead change in today’s world.

In the previous presentation we discussed what should be done before starting operational excellence efforts in the company. Additionally we also defined the Shingo principles which are regarded as pillars of operational excellence.

Human factors as well as technical factors influence achieving operational excellence. The social climate in the organisation, behavioural patterns of employees and their values are all very important for achieving desired OpEx levels.

Corporate culture therefore remains as an important topic to be covered for those who want to understand and carry out operational excellence practices.

Without understanding corporate culture, it becomes very difficult to design and run OpEx projects. In the end, all these efforts require employees to adapt their way of thinking and behaviours to new and better ways of doing the company’s job.

Therefore, we will briefly introduce the concept of corporate culture in this document.

Organisational Culture is a very important factor affecting OpEx projects

What is culture?

To truly understand what company culture is, we need, first to understand what the CULTURE is?

According to   E.B. Tylor, English anthropologist and founder of cultural anthropology;

Culture is the whole complex s y s t e m w h i c h i n c l u d e s knowledge, belief, art, morals, law, custom and any other c a p a b i l i t i e s a n d h a b i t s acquired by man as a member of society.

..without understanding culture, it is hard to solve organisational problems…

What is corporate culture?

..without understanding culture, it is hard to solve organisational problems…

Shortly, culture is the values and practices shared by the members of the group. 

Company Culture, therefore, can be defined as the shared values and practices of the company's employees. Exceptional organizations create and sustain a culture that engages and motivates their employees.

Creating a company culture requires : • Meaningful work • Deep employee engagement • Job and organizational fit • Strong leadership

How to transform corporate culture?

..transforming the company on purpose and with control is critical…

In reality, every organization is n a t u r a l l y i n s o m e s t a t e o f transformation.

The critical question is, to what end i s t h e o r g a n i z a t i o n b e i n g transformed and who are the architects of the transformation?

5 Steps to transform company culture are : • Figure out what aspect of culture

needs to change • Identify the influencers in the

organization and bring them “in” • Start walking the talk in small

steps • Be courageous in weeding out

behaviors that do not align with the Company Culture

• Communicate and celebrate the winning culture

How to create a continuous improvement culture?

In order to achieve success in operational excellence efforts, corporate cu l tu re shou ld be t r a n s f o r m e d t o s o c a l l e d “ c o n t i n u o u s i m p r o v e m e n t culture” (CIC).

In creating CIC, it is critical to get employees committed and involved in the change process of the company. Every employee needs to share the CI vision, which is about focusing on the customer and making the word “improvement” part of the company’s DNA.

The executives may demonstrate their commitment to CIC by, • Setting clear objectives and

priorities • Identifying the right team

• Continuously developing CI skills within company

• Preventing from excuses when deviations happen from the plan.

Continuous improvement begins by clearly defining value through the eyes of customers.

The four goals of improvement must be making things; • Easier • Better • Faster • Cheaper

for the customers.

..continuous improvement culture should be embedded in the corporate DNA…

How to create employee involvement in continuous improvement?

Employee involvement is central to the philosophy of continuous improvement. CI involvement is about: • Leading by doing • Asking the right questions • Listening to all ideas • Regularly reviewing key CI projects • Empowering all employees to make

improvements

Opera t i ona l exce l l ence requ i res a widespread commitment throughout the organisation.

A culture must be developed where every person in the organisation demonstrates a high level of respect for every other person.

..continuous improvement culture should be embedded in

the corporate DNA…

Shingo principles revisited

As you might recall from previous presentation, Shingo Principles were regarded as pi l lars of operat ional excellence. To remind you shortly the Shingo Principles, they are; 1. Respect every individual 2. Lead with humility 3. Seek perfection 4. Assure quality at the source 5. Flow and pull value 6. Embrace scientific thinking 7. Focus on process 8. Think systemically 9. Create constancy of purpose 10. Create value for the customer

All the items above are related with CIC. Especially the first three have a direct impact on the culture. Therefore we are going to mention these shortly in the following section. …shingo principles are directly

related with company culture…

Shingo principle 1 - Respecting every individual

..without respect as a fundamental value in an

organisation, sustainable outcomes are impossible…

Respect is a principle that enables the development of people and creates an e n v i r o n m e n t f o r e m p o w e r e d associates to improve the processes that they “own.” Respect for every individual naturally includes respect for customers, for suppliers, for the community and for society in general.

Some examples to respect as a corporate value are as follows: • Because we respect every individual (the

principle); therefore, we always place safety first (the value).

• Because we have respect for every individual (the principle); therefore, we empower people to act independently (the value)

• Because we have respect for every individual (the principle); therefore, we make all of our key communications open

Why and how to lead with humility

Humility is an enabling principle that precedes learning and improvement.

A leader’s willingness to seek input, listen carefully and continuously learn creates an environment where associates feel respected and energized and give freely of their creative abilities.

Some examples to leading with humility as a corporate value are as follows: • Because I lead with humility (the principle);

therefore, I am open to good ideas and innovation from anywhere in the organization (the value).

• Because I lead with humility (the principle); therefore, I accept responsibility and enable change (the value).

• Because I possess humility (the principle); therefore, I seek,

• trust and follow the direction of those with a responsibility to lead (the value).

..humility makes employees feel respected and energized and give freely of their creative abilities…

Seeking perfection and continuous improvement

The third principle of Shingo is seeking perfection.

Excellence is a non-ending journey. Improvement from a certain level to another is achieved and this success for sure deserves an appreciation. However, the final destination to excellence is never reached.

Keeping this in mind, the motivation and focus of everyone in the company should be aligned for a never ending continuous improvement.

A powerful incentive for employees at this stage is an improvement and learning opportunity for themselves. At first sight, efforts for perfection seems for only company’s wellbeing.

However, continuous improvement efforts should be designed and introduced also as opportunities for improvement of the employees.

..seeking for perfection and continuous improvement

culture should be embedded in the corporate DNA…

CI is an improvement opportunity for employees as

well as the company…

Creating and leading change in the corporation

All we have mentioned and all we are going to mention from now on are about a “change” process. Unfortunately, most of the change efforts are unsuccessful.

By systematically designing and managing the change process, it is possible to achieve the change desired.

The steps and the mechanism to be followed for achieving change are going to be mentioned in the following presentations. Till then, we are inviting you to work on the obstacles refraining your company from success in the change process. Just take a piece of paper and write down the items coming to your mind. Similarly, also work on the items which are easing the way on the change process.

We are going to use these drafts later in managing change presentation.

…change is a process which can be systematically

intitated and managed…

To be continued with other Shingo principles

So back to Shingo principles; they are: 1. Respect every individual 2. Lead with humility 3. Seek perfection 4. Assure quality at the source 5. Flow and pull value 6. Embrace scientific thinking 7. Focus on process 8. Think systemically 9. Create constancy of purpose 10. Create value for the customer

Our following presentations aim to mention all these items and give you a simple and pragmatic understanding to apply the principles in your organisation.

We have covered the first three items. We are continuing explaining the rest of the principles in our following presentations. Additional topics related to OpEx are going to be available as well.

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