No matter what you think about it, or how you define it, company culture matters a lot, and makes a huge difference in both companies’ performance and value.
According to a Duke’s Fuqua School of Business survey of 1,400 American CEOs, more than 90% of them agree that company culture is important to their firms and that improving culture would definitely improve the value of their company. But the survey revealed another fact – only 15% of CEOs think that their company culture is where it needs to be.
So where does your company culture need to be? Should you “run a tight ship” and oversee every little detail of your operation, or should you let your workers relax and give them the freedom to be creative?
Way back in the 1970s, in an effort to describe the organizational structure, researcher Karl Weick developed the concept of loose and tight coupling.
And while he used it to describe the structure in educational establishments, the same concept can be applied to businesses. Let’s take a look at both concepts, some of their more noticeable characteristics and see their advantages and disadvantages.
Loose Company Culture
In these companies, managers allow more independence and even encourage whole teams and even single employees to explore various options, without having to prove how they fit in organization’s goals. Unsurprisingly, workers have more freedom, and different teams, and even departments have a chance to operate without much coordination between each other.
When management encourages individuals to experiment, it frees up resources to explore new markets, introduce new service and create new products. However, this isn’t a totally unsupervised office environment, but the management gives employees more room to breathe and allows more decision making at lower levels.
Naturally, this leads to higher employee satisfaction levels, and this is more important than you probably think.
According to studies by Gallup and the Queens School of Business, disengaged employees have almost 50% more accidents, 60% more errors and are absent 37% more.Low engagement affects your entire organization – the studies have also found that these companies experience 18% lower productivity, 37% lower job growth and around 65% lower share price.
Of course, there are pitfalls of being too laid-back in the office. For starters, experiments don’t work most of the time, and some notions get so far from the organization’s vision, they are basically useless. It can also break the communication thread, so that the managers may not be aware of what the teams are working on.
What’s more, most people in an office environment waste their time every now and then, but unsupervised workers have a tendency to become even more careless than their peers.
According to a Salary.com survey, almost 65% of workers visit non-work related sites each day. 40% of them waste around an hour per day, and most of them are under constant supervision.
Tight Company Culture
Tight organizations usually have a set of rules, enforced by a manager and feedback system. The supervisors know exactly what their employees are doing at any given moment, and the management can coordinate all the activities according to central strategy.
Most of these organizations work on a strict timetable, and utilize a team schedule maker and various other tools to plan ahead and keep everything tight.
Your entire organization may gain additional efficiency from strict company culture. And even though this working conditions may seem unsatisfactory at a first glance, if everybody understands their place in the company structure, they can boost productivity.
For instance, Germany may be known for its strict working environments, but their workers enjoy shorter working hours (35 per week on average, according to CNN) than their European counterparts. In addition, their culture is of direct communication, where employees speak directly to their managers about performance reviews and launch into meetings without any polite phrases and “icebreakers”.
And while this doesn’t mean that an office should be a completely sterile environment, it just shows that separating work from play can lead to an increased production and a superior work ethic.
The reality is, many companies around the world force a strict 9-to-5 work policy. Most employees feel that staying in the office just to put in “face time” is detrimental to their productivity. What’s more, even though some employees don’t have a problem with these policies, they can still lead to an unhealthy workaholic environment. Some studies even claim that workaholics don’t actually perform better than their “laid-back” colleagues.
A 2013 study, published in the Journal of Occupational and Environmental Medicine, has found that because of mental and physical strain they experience, over-worked employees perform noticeably worse than most of their co-workers. Even though they are devoted to their work, workaholics just don’t produce good results.
While many companies are tightly coupled in theory, in reality, they are loosely coupled. And let’s face it, a vast majority of workers tends to push back most of the attempts to oversee them too closely.
In general, workers follow the rules and regulations perfectly when their supervisors are watching, and tend to disregard a good number of rules when they aren’t being monitored.
In other cases, however, an employee has a specialized skill that the manager doesn’t understand well enough to oversee completely. For instance, some employees have the ability to maintain a piece of equipment or use a piece of software, unfamiliar to their manager.