Is Organizational Culture the Answer to Overcoming the Challenges of Coordination?
The most significant challenges for any organization
When thinking about the most significant challenges any large organization in any industry is facing, I’d say it is selection of the right people and their day-to-day coordination. In other words, the biggest organizational challenges are related to getting the right people on board from the perspective of competencies, behavior, and motivation, and then having all of them understanding where they are going, how to get there, and finally, rowing in the same direction at a synchronized pace.
Even though some might claim there are other challenges that might be considered as more complex, the ones I mentioned have proven time and time again to be a great puzzle in the life of any organization. Have you ever seen an organization that has managed to overcome these challenges completely or at least came close?
Even though both parts of this puzzle (getting the right people on board and having them rowing towards the same goal) are interesting and deserve a lot of attention, we will focus on and breaking down the rowing part only because recruitment and selection is something that happens at discrete moments, more or less frequently. On the other hand, having everyone in an organization understanding where they are going, how to get there, and rowing in the same direction at a synchronized pace, is something that requires constant attention and devotion from the management perspective. In other words, the life of an organization is not possible without a certain level of transparency and day-to-day coordination.
If we look at organizations as coordinated efforts of two or more individuals joined to achieve specific goals, we can immediately conclude that they must (1) agree on what the specific goals are (setting the goals), (2) always have full transparency and clear understanding where they are against those goals and how to reach them, and (3) coordinate efforts of all individuals involved within an organization to achieve those goals.
Having in mind that setting specific goals is not something that is being discussed and agreed among all organization members (especially in larger organizations), but rather decided within the leadership team and only then communicated to the rest of an organization, it might not be perceived as an equal challenge to transparency and coordination because these two aspects are not reserved for the leadership team only. Transparency and coordination pertain to every individual in any organization as everyone must work in an orchestrated fashion to be able to deliver value for the organization’s customers. However, in this article we will be focusing only on the challenges of coordination.
A quick look at the coordination challenges
So, why is this so hard to achieve coordination and what do we need to be aware of? Let’s put this challenge into perspective first.
When one person is doing the work, there is no division of labor and thus no need for coordination. In that case, the thinking process inside the mind of that individual is practically guiding the work – it gives orders to the fingertips on what to type, as well as to the hands and legs on what to do. Think about a writer writing a novel, or one bricks man building a wall of a house.
However, as soon as there is a need to engage another person to do the work, some form of coordination is necessary. The most usual form of coordination is the simplest one – mutual adjustment (Mintzberg, 1979). Any two individuals will have to communicate verbally or non-verbally, first to agree on who is doing what, how the work will be done and by when, and then to continuously synchronize their efforts while the work progresses.
The two-persons organization in which the coordination is achieved solely by mutual adjustment is the simplest form of organization. However, in a two-persons organization, the time spent on work is split between efforts invested in operations (making and delivering value to the customers) and efforts invested in coordination to get the work done. With this in mind, we may come to the logical conclusion that the split of time between operations and coordination will diminish the productivity of everyone for at least the amount of time spent on coordination. However, two individuals together should do more work in the same period, or the same amount of work in less time as compared to one person doing the work. In other words, there will be an increase in the overall productivity of their work. Hence, if the overall productivity is higher compared to the costs of sum of all individual productivity losses, we think of the growth of an organization in a positive way.
With an organization growing further by adding more people to do the work, responsibilities will be more divided as new people are coming in. This will result in further differentiation of organization where everyone is focused on their area of responsibility, while no one has an overarching view on the end-to-end processes. Work is now chopped up between more people, so more efforts devoted to integrating all of them in a way that will secure uninterrupted execution of end-to-end processes will be needed. The more the organization becomes differentiated, the more it will require integration to be able to create value for the customers in a seamless manner.
In the beginning, mutual adjustment will have to be increased. However, new forms of coordination will start being added at some point as mutual adjustment by itself may provide results only until a certain point. Very soon, another form of coordination that will gain significance is direct supervision. This form allows one person to control and coordinate the work of their direct reports.
After an organization gets even bigger, next form of coordination in line to be added is usually one of the four types of standardization (Mintzberg, 2023): (1) Standardization of outputs where people coordinate their work based on predefined targets while having some degree of freedom to choose how the targets will be reached, (2) Standardization of skills where coordination is based on years of studying and practicing specific discipline (this is inherent for professionals such as doctors, lawyers, accountants, etc.), (3) Standardization of work processes where coordination is based on systems or procedures, i.e., all activities are being predefined and standardized, after which employees are being trained on how to do their work (these skills are much less complex and easier for adoption compared to the skills obtained by professionals mentioned under number 2), (4) Standardization of norms and behavior through indoctrination and shared ideology (this is the most complex form of coordination as it takes a long time, sometimes even years, to establish a shared system of beliefs and values that shapes the prevailing way of thinking and acting across an organization).
Each one of these forms is being used in organizations, but their usage depends on numerous factors such as size, industry, level of maturity, etc. However, it is rare to see only one type of coordination being used to connect different actors across an organization. Usually, it is a mixture of different types of coordination, with each type being used at a different level of intensity.
Organizational Culture as the most effective form of coordination
Designing the right mix of the right coordination forms across the organization is a very challenging task as organizations are subjected to constant changes. However, it seems we are now witnessing a specific pattern – we are recognizing the importance of standardization of norms and behaviors more than ever. Today, almost every organization is trying to define and embed several norms, behaviors, or values into their everyday practice. By doing this, they are trying to standardize certain patterns of thinking and acting. In time, their expectation is to shape the organizational culture that is being embraced and cherished by all the members of an organization.
Why is that the case? Because organizational culture acts as a glue that holds the members of an organization together. Having a resilient organizational culture will positively impact employee engagement and reduce employee turnover, thus making the organization more successful.
Will organizational culture supersede other forms of coordination? Most likely not. However, it seems that this form of coordination has stood the test of time and has something to do with the longevity of organizations. If we look at some of the oldest organizations outside of the government sector that are still operating (armies are usually high ranked on the list of oldest and largest organizations), we will find several religious organizations and educational institutions.
Why? The answer may be found partially in the way these organizations have managed to internalize a strong sense of purpose, identity, and norms of behavior, while also being crafty when it comes to using other forms of coordination. In the case of religious organizations, direct supervision is the next commonly used mechanism (think about the different religions and how their organizations are operating), while educational institutions heavily rely on standardization of skills (think of any school or university).
There are also for-profit organizations that have managed to create a whole new subculture among their customers who are becoming followers to a certain extent, but also among their employees. They have managed to develop a resilient culture that permeates and blurs the boundaries between the organization and its customers. Think of Harley-Davidson and the impact it had on a large number of people globally. These individuals see themselves as part of the Harley Davidson and wider motorcycle community where they dress, behave, and interact in a certain way. Another example would be Apple as their core customers are very loyal to the brand, which is seen through their advocating activities, the share of funds they are spending on Apple’s products and services, and their willingness to go way beyond what is perceived as a usual customer behavior, just to be among the first to buy new products right after their launch date. This usually means coming in front of the store hours if not the whole day before the opening and waiting for the store to open.
It seems that organization culture plays a pivotal role in creating resilient organizations. One of the reasons could be found in the logic that it helps instilling the purpose among the members of the organization, which creates a certain level of unity and sense of belonging. In this way, the culture tends to reverse the negative effects done by politics within organizations (Mintzberg, 2023) where people are often motivated by self-interest and opportunistic behavior to the detriment of organizational goals and interests.
For this reason, it is of crucial importance to nurture and continue to evolve the organizational culture. One of the things to be mindful of is that it takes years and wide acceptance across the organization to build a strong culture, while its collapse may happen in much shorter time frames and under the negative influence of only one powerful individual within the organization. Hence, any member of the executive team or manager that is not perceived in a positive way by their team members or peers or is not behaving according to the accepted cultural norms, may significantly undermine the efforts of an organization to embed certain values and develop specific culture. This is why it is necessary to resolve these cases as soon as they become apparent, irrespective of the role this individual plays within the organization or the commercial value they bring to the table. In the long run, bad impact on the organizational culture will always negatively outweigh any short-term positive contributions.
This is where we go back to the point made at the beginning of this article and close the full circle – selection of the right people is one of the most significant challenges any large organization in any industry is facing as it is having a profound impact on development of organizational culture. It is one of the most important preconditions for good coordination and organizational longevity.
References
Mintzberg, H. (2023). Understanding Organizations... Finally! Berrett-Koehler Publishers.
Mintzberg H. (1979). The Structuring of Organizations: A Synthesis of the Research. Englewood Cliffs, NJ: Prentice Hall.