Promoting a Positive
Organizational Culture
Prof. Brian Blume, Ph.D
University of Michigan, Flint
School of Management
What factors separate
Successful vs. Unsuccessful
Schools?
Session Goals:
Inform, Illuminate & Inspire
1. Make the business case for “people first”
cultures
2. Explore the evidence which isolates the
characteristics of high-commitment,
“people first” cultures
3. Challenge you: How can you help create a
higher performance culture at IAF?
What is Culture?
Culture is the set of values, beliefs,
understandings, and ways of thinking that are
shared by members of an organization
Culture serves 2 basic functions:
internal integration to integrate members so they
develop a collective identity
external adaptation to help the organization meet
goals and deals with outsiders by responding
rapidly to customer needs
What is an
Organization’s
Most Important Asset?
Exercise: Steak N Shake Restaurants recently
completed an in-depth study comparing their
stores that rank in the top quartile in sales and
profitability and those stores that rank in the
bottom quartile.
What factors were consistently NOT different
across stores?
What consistent predictors or indicators of high
financial performance did they find?
The Steak N Shake Lessons
What DID differentiate the stores on
performance?
(1)High customer service – measured by
external raters
(2)High employee engagement – measured
by low turnover and surveys
(3)Store manager (drives the first two)
(4)Franchise ownership
People are an Organization's
Most Important Asset
The central business challenge is
recruiting, motivating, and retaining
committed managers and employees
Engaged / Committed employees:
Work harder
Work smarter
Are better citizens
Leave less and attract others like them
“If people are our most valuable asset, I say we
sell them.” Jerry Seinfeld
100 “Best To Work for” vs.
Overall Stock Market 1998-2007
Seven Key Management Practices
(Pfeffer & Veiga, 1999)
1.
2.
3.
4.
5.
6.
7.
Commitment to Talent Development
Decentralized decision-making
Reduced status barriers
Extensive sharing of information
Relatively high and performance-based pay
Employment security
Selective hiring using effective methods
Commitment to Talent
Development
What if we train all these people and they
leave? What if we don’t and they stay?”
Sends signal of investment
Creates environment of growth and ideas
and learning
Development Means More Than Training
Candid feedback & coaching
Mentoring from someone “in the loop”
Job experiences
Decentralized
decision-making
Incredible motivational power of control &
ownership & Commitment
Utilize Self- managed teams to increase
responsibility & accountability to peers
Discretion to help students learn and do
what is right
What decisions could someone else make?
Reduction of
Status Differences
Symbols- language and labels, physical
space, dress
Minimize wage differentials across job
levels
Perceptions of Fairness influence behavior
Look for group and organizational rewards
that prompt sense of mutual and shared
interest
Sharing
information
Key to developing high-trust culture
Do you know how the organization is
doing: financial performance, strategy,
operational goals, student outcomes?
Employees desire
Prompt and ample feedback
Some form of input – the opportunity to be
heard
Relatively High Pay based on
Organizational Performance
Surprise: Relatively high pay yields
attraction and retention (Obviously, not
really a surprise)
Be as transparent as possible with
performance criteria
Individual incentives can work in the right
context, but may be tricky and dysfunctional
Look for group and organizational
incentives
Higher pay can potentially lower labor costs
(via higher productivity & lower turnover)
Employment
Security
The case for it includes:
encourages innovation
discourages layoff thinking
incents more careful hiring
creates longer-term perspectives
Does not mean keep low performers -- but
all leavers go with respect and dignity
Challenges conventional wisdom
Top employees ask: Is there a place for me to
be promoted to within the organization?
Selective Hiring
How to attract more applicants?
Need to be more than great place to work –
need to be known as great place to work
Hire for fit – Exceptional results with
ordinary people.
How do you determine fit? What values &
skills are key to the position & organization?
Broaden input on hiring decisions (e.g.,
fellow employees, customers)
Understand the evidence on selection
predictors
How would you rate IAF
on these Practices?
Why?
1.
2.
3.
4.
5.
6.
7.
Commitment to Talent Development
Decentralized decision-making
Reduced status barriers
Extensive sharing of information
Relatively high and performance-based pay
Employment security
Selective hiring using effective methods
Lessons from Culture Change
Must begin by questioning basic assumptions of
thinking behind current behavior and practices
Culture should align with the vision, mission,
strategies and goals of the organization
Policies and procedures should be consistent
with desired culture change
Involve employees
Culture change requires a lot of time and effort
to overcome resistance