The cultural framework that can transform your business
During a recent BambooHR Virtual Summit keynote, PI CEO Mike Zani talked about the importance of aligning your people strategy to your business strategy. Using the PI platform, Zani demoed how users can see whether a team’s behavioral patterns align with the company’s strategic goals.
The PI Strategy Assessment was inspired by research in business strategy, behavioral science, and organizational culture. When researching organizational strategy and organizational culture, PI referenced a widely-applied theory known as the Competing Values Framework (CVF).
But what exactly is the CVF—and how do its concepts apply to talent optimization? Read on as we tell all.
What is the Competing Values Framework?
The Competing Values Framework was developed in 1983 by Robert E. Quinn and John Rohrbaugh as a model of organizational culture.
The pair interviewed theorists from various fields and used their responses to model what they (at the time) called “organizational effectiveness.” This model sought to describe how opposing drives—or competing values—manifest themselves within organizations.
Over time, Quinn and Rohrbaugh distilled their findings down to two fundamental competing values:
Stability versus flexibility: Companies that focus on stability value order and control, whereas companies that focus on flexibility value innovation and change.
Internally-focused versus externally-focused: Internally-focused organizations address the needs of employees and the processes within the company. Externally-focused organizations tend to be more competitive and focused on client needs.
Using a four-quadrant design, Quinn and Rohrbaugh demonstrated how organizations can plot where they fall on these two spectrums. The framework is still widely used by companies to measure culture within their organizations.
The four types of organizational cultures
Building off the Competing Values Framework, PI has identified four common organizational cultures. These cultures are Cultivating, Exploring, Producing, and Stabilizing.
A Cultivating culture rewards cooperation, collaboration, and patience. Leaders act as mentors, taking an active role in the development of their employees. Employees value teamwork, group success, and community.
An Exploring culture rewards venturesome, non-conforming behavior. Exploring organizations tend to have little hierarchy, with leaders that are transparent and approachable. Employees value flexibility, adapting to new and unexpected challenges, and pushing forward despite uncertainty.
A Producing culture rewards drive, assertiveness, and independence. Leaders expect the best, focusing on metrics and challenging employees to push themselves. Employees tend to value taking action and delivering results.
A Stabilizing culture rewards conservative, reliable, and steady behavior. Stabilizing organizations typically have a formal hierarchy, with leaders that emphasize process and procedure. Employees tend to value consistency, expertise of work, and diligence in getting things done.
(These cultures mirror the four strategy types PI has identified: Cultivating, Exploring, Producing, and Stabilizing. That’s because culture must be designed intentionally to maximize strategic performance.)
Understanding the relationship between different culture types
Cultures that are adjacent to one another share one value from the CVF model—and differ on another. For instance, Exploring and Producing cultures are both externally-focused cultures that reward proactivity and client-driven work. However, the Exploring culture encourages flexibility of ideas, whereas the Producing one demands employees follow a more regimented process.
By contrast, cultures that sit diagonally from one another do not share a common value; they promote solely opposing ones. For example, a Cultivating culture encourages collaboration, team cohesion, and individual development. Compare that to a Producing culture, which puts a premium on competition, externally-driven goals, and hardened rulesets. The differences become clear.
It’s common for organizations to promote more than one type of culture, especially if they’re adjacent ones. However, if a business were to try to pursue diagonal cultures, it could send mixed signals to employees—and hinder performance.
The importance of organizational culture to talent optimization
If you’re an executive or senior leader, you likely make decisions according to your business strategy. Too often, though, those decisions gloss over a crucial asset of any successful business: your people. As Mike Zani said in his keynote, “Strategy doesn’t run itself. Strategy runs through people.”
Talent optimization is the discipline of aligning your people strategy with your business strategy to deliver results. So, how does company culture tie into all this? As it turns out, culture plays a critical role.
An organization’s culture sets expectations for how employees should behave. It also functions as a control system, defining rewards and consequences that help condition expected behavior. Put simply, when your culture isn’t aligned with your business strategy, it means you aren’t encouraging/rewarding the behaviors needed for your strategy to succeed. From a talent optimization mindset, this is a big red flag.
By understanding these four cultures, you can develop self-awareness about your own company’s culture. More importantly, you can see how well—or poorly—it fits your strategy.
Perhaps you work for a financial institution in a high-pressure market. If you have a culture that revolves around group success, your people likely aren’t going to be task-oriented and competitive enough to keep your company afloat. Or, perhaps you sell vacuum cleaners in a market that requires process and precision. If your culture rewards innovation and risk-taking, your employees may be working with the wrong objectives in mind.
Only by aligning culture with strategy can you begin to encourage the right behaviors—and nail your business goals.
Take the first step in promoting a culture that fits your strategic needs.
You’ve identified the dangers of having misalignment between strategy and culture. What now?
Start big. Get together with your senior leaders and make sure you agree on business strategy. Once you have alignment, foster a culture that reflects those strategic goals.
The Predictive Index can help you get started. The PI Strategy Assessment lets you assess your company’s current strategic emphasis—and see where your organization sits within the Competing Values Framework.
Once you’ve identified the type of strategy your company is pursuing, you’ll be empowered to establish a culture and encourage behaviors that fit your business needs—setting you and your organization up for success.
Strong cultures build strong companies.
Changing an established culture may seem daunting. For many companies—especially those that have been around for decades—changing culture means altering time-honored traditions.
However, the benefits of a renewed culture are well worth the effort. By aligning culture with strategy, you ensure your employees aren’t stretching themselves to work in a way that runs counter to your business. The end result is a company that’s more productive—and ultimately more successful.
At the end of the day, fostering a strong culture comes from within. There are many ways to establish your desired culture—from leadership training to team-building exercises—but the most important part is just to get started. Even the smallest of actions can set an example for others and help trailblaze your new direction.