In this series of papers, author and industry expert Frank Buytendijk examines the people side of business performance and business intelligence. They include:
- Fact-based decision-making, or is it? Take a close look at the process of decision making to ensure a rational, appropriate process is applied.
- What is the best methodology? Getting to double-loop learning. Understanding the right measurement methodology is essential to achieving your requirements.
- Number games: making sure metrics drive the right behavior. Why it’s important to use measurements that incent actions that benefit the organization as a whole.
- It’s the culture, stupid! Unless measurements are linked to an organization’s culture, the effect will be lost.
In this fourth paper in a series of four, Frank discusses how to link an organization’s culture to the successful implementation of a business intelligence strategy. This relies on pinpointing the essence of the culture and identifying metrics that support its growth.
We've also pulled out the first several pages of the whitepaper for you to read. Download the PDF on the right to read the rest.
We need to get more grip on what many intuitively believe is the most important factor in a business being successful; its culture. However, particularly in finance and IT, culture is seen as soft and intangible. Hardly something that you can model or shape. But in fact, you can. One of the social business sciences, intercultural management, has understanding and affecting culture as the main object of study. Organizational culture is very simple to define. It’s how people make decisions and solve problems. Even shorter, it is “the way we do things around here.” The volume of research in this field is astounding. It’s just that most business intelligence professionals are not aware of intercultural management and how to use it to improve their business intelligence.
CULTURE IS NOT “SOFT”
Culture is often called the soft factor, but in reality it is not. Culture has a very tangible impact on an organization’s performance. New employees that join an organization and do not fit into its value system usually soon depart. They don’t feel at home; they do not understand what is important and what is not.
Understanding your organizational culture can be a powerful source of management control. Traditionally, business intelligence is focused on bureaucratic styles of control, consisting of a number of standard processes, rules, and checkpoints to make sure all transactions are performed in the same way. This vertical alignment and a hierarchic approach works best in environments with low ambiguity (only one way to interpret things) and low uncertainty (stable environment). However, most environments are increasingly ambiguous and very uncertain. More control and more performance indicators would not lead to better results. In fact, they would lead to more dysfunctional behaviors. In ambiguous and uncertain environments, internalized control works better.
Internalized control means that the members of an organization share the values and the objectives of the organization, and will seek to do the right thing and be open about it. Again, this principle is not soft.
Organizations with a strong culture often work hard to keep it that way. They invest a lot of time in “painting their employees in the right color.” They discuss decisions in terms of what is the right thing to do.They spend extensive time on sharing information,argumentation and deliberation, to make sure everyone buys into the decisions, and applies the lessons learned in their own decisions.
"Organizational culture is very simple to define. It’s how people make decisions and solve problems."
SKETCHING YOUR CULTURE
There are several frameworks by which to describe and categorize cultures. Often these frameworks use dimensions between two extremes to classify a culture on that specific characteristic. Most of the frameworks focus on describing national cultures, and deal with many social issues. However, some of the dimensions used also apply to corporate cultures, and they affect the way performance management should be implemented.