Culture Drives Performance

This is so true — and highly relevant for all executives and managers, including those in internal audit and risk management.

Read this article and think about the message. I have questions for you:

  • Does your organization have a culture that rewards the performance the board and top management want?
  • Is the culture one of taking too much risk and playing down the potential impact?
  • Is the culture one of taking too little risk and missing opportunities?
  • Is management trusted by the board?
  • Is management trusted by employees?
  • Does management trust employees?
  • Is management trusted by its business partners, regulators, the community, etc?
  • Does the culture enable making decisions quickly, or do managers jump on the train after it leaves the station?
  • Does the culture enable the use of new technology, or are you wearing clogs and slowing down the business?
  • Is there a culture that rewards dotting the i's and rigorously following policy, or are managers able to get things done?
  • Is there a culture of "lean" — focusing on what counts and getting rid of unecessary red tape?
  • Does the organization understand the risks of the "wrong" culture?
  • What does it do to promote the desired culture?
  • When employees are hired, how does management ensure they will add to and not detract from the desired culture?
  • Finally, do employees enjoy coming to work?

One more question for internal auditors: have you considered the risks of the "wrong culture" — the impact on performance — and included audits to address the higher risk areas?

Posted on Jan 14, 2011 by Norman Marks

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  1. When I think in culture + performance, the first thing that pops-up is collaboration. Organizations that incentive a collaborative culture, by re-engineering their processes and trying to break down silos, will get improved sharing of knowledge and information, thus driving to better performance levels. IMHO, using technologies that support the processes and their information will probably favour collaboration.
  1.  Norman

    I'd suggest a subtle change. I don't think culture drives performance directly. Culture does drive behavior and along with other forces driving behavior (e.g. compensation, knowledge, wisdom etc) you will get a level of performance. Culture is pretty fuzzy stuff. Behavior can be observed.

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