The 5 Cultural Values that Drive Organizational Agility

Competitive advantage depends on the ability to move quickly, decisively and efficiently in sensing, responding to and exploiting change in the business environment.

Does your organization have a workforce that's able to properly respond to volatile conditions? The Secret Formula for Organizational Agility, a study from the Institute for Corporate Productivity (i4cp), found that a culture grounded in the right values is vital to empowering agility.

Values, arguably the most important component of culture, help employees understand what an organization stands for and what is expected of them. Values that are well-defined, consistent with leadership actions and behaviors, and woven into the fabric of the organization provide the foundation for culture. When employees understand, share and embrace the values of the organization, they are more likely to act in a way that is in the best interest of the organization and to exhibit discretionary work behavior.

In this study, 82% of respondents from high-performance organizations indicated that their employees share the organization's values, compared to only 45% of those from lower performers. But which shared organizational values matter most and what can your organization do to foster them?

The five that really matter

Five shared values move the needle the farthest and are most predictive of agility. Companies with deeply rooted and visible commitment to one or more of these values are more likely to be effective at agility than those without them, and respondents from high-agility organizations are 10x more likely to indicate that all five values are embedded in their culture.

Together, when embedded in every aspect of how an organization operates, these five values provide the right environment for agility to thrive:

1. Innovation

Cultures that value and promote innovation--supporting it through processes, leadership, technology, training, recruiting, and rewards--are more successful at creating and sustaining innovation capability. Further, organizations that value risk-taking and encourage or even reward failure are significantly more agile and innovative than those that don’t. Essentially, leadership needs to allow their employees to test ideas and learn from their mistakes.

Recommendation: Reward well intentioned failure--possibly with opportunity to act on lessons learned--and even the smallest of innovations, not just the earth shattering ones.

2. Transparency

Encouraging open communication across the organization and soliciting feedback from and involving employees in making decisions requires trust. Trust is the foundation for building a strong culture--trust in leadership, trust in teams and trust in individuals.

Transparent communications build trust that influences both employee support and acceptance of change. It also provides a sense of safety for employees to allow creativity and innovation to be stimulated, accepted and promoted.

Recommendation: Make the criteria for high-potential consideration visible to all. Great companies do not hide what it takes to be a Hi-Po, they are clear on this and transparent about it.

3. Creativity

Creativity enables problem solving through the integration of divergent thoughts and perspectives. In i4cp’s Human Capital Practices that Drive Innovation, high-performance organizations were 2.5x more likely to provide internal training in creativity and innovation practices. This was one of the ten practices that was found to significantly influence innovation effectiveness.

Recommendation: Introduce gamification into the workplace to stir up the creative juices and accelerate changes in employee behavior.

4. Diversity

The mere existence of a diverse group of individuals does not directly lead to creativity, but not having it is an impediment. Innovation is most likely to occur when there is diversity of thought and experience, as well as true familiarity with the issues needing to be addressed. A key component to corporate agility is having a diverse and inclusive culture. Organizations that value diversity and make it a priority are able to "quickly consider a challenge or opportunity from a wide variety of options and perspectives, and select the most beneficial response while avoiding the blind spots that may exist in any single individual or cultural group lens," according to D&I expert Joseph Santana.

Recommendation: Create metrics to gauge the impact of D&I initiatives. Be aware of the current talent mix and uncover whether hiring choices are supporting diversity efforts.

5. Collaboration

A collaborative work environment engages employees at all levels in finding solutions for customers. Collaboration is not about exchanging information (knowledge sharing) or achieving structural harmony, but rather it's about using combined resources to create something new.

Recommendation: Design work with teams in mind and consider implementing quality circles. Quality circles allow the focus of your teams to shift from division of labor and leading by authority to a more participative approach in which team members identify problems that need to be solved and suggest solutions.

Culture is the heartbeat of an organization. Prosperity and growth comes to those organizations that continually invest in their people, place value on things that align to organizational goals, and reward those who exemplify the culture's values.

Combined, the five values outlined above should help enable higher levels of organizational agility, and should be included in hiring models and performance management processes (including rewards).

For more on cultural values and organizational agility:

• Visit Culture Renovation for in-depth resources
• Download the i4cp member-exclusive report The Secret Formula for Organizational Agility
• Read this story about culture/values change at member company TIAA-CREF.