What is the Best Organisational Culture to aim for?

Excerpt from Hofstede Insights - Organisational Culture:


There is no one best Organisational Culture to aim for, because the best Organisational Culture is always contextual. The key thing to keep in mind is that the best Organisational Culture your organisation should aim for should be a culture that best supports your strategy.

An up-and-coming start-up will most likely have a very different strategy than an already established international organisation, and the Organisational Culture should reflect that. Similarly, the Optimal Culture of that up-and-coming start-up will probably change over time.


Bigger organisations tend to operate in different contexts and face different requirements and restrictions and, therefore, one day there may be a need for more structure and processes. If the Organisational Culture of the start-up remains very flexible and employee oriented, those processes will be difficult to implement.


It is important to note that the National Culture of the organisation always affects how the Organisational Culture is perceived. An open and approachable Organisational Culture can create an effective self-steering  organisation if the National Culture is fairly Individualistic and low on Power Distance (more about the 6 Dimensions of National Culture). But in cultures where seniority-based expertise is expected, it may seem weak and even incompetent.


The missing factor: Culture


Despite carefully accounting for local factors such as legal requirements or supply chain risks in their global expansion, the business’ international performance had remained mixed. The company achieved breakthrough performance once they considered what, according to them, turned out to be “the most important factor at play – the Culture Factor”.


In order to make cultural diversity their competitive advantage, the firm partnered with Hofstede Insights in 2017, a cultural training provider and consultancy.


Bas Breedenord, HR Director at Mars International Travel Retail, explains the steps they took to develop their cultural in a speech filmed at the Hofstede Insights 2019 conference. (see the video on the right)


Below are some key points of his presentation.



Know your own Culture

Before you can adapt your style to local cultures, you first need to know what your own style is. Mars' corporate culture places the Five Principles described here at the core of everything they do.


While its employees could definitely feel and experience these principles at work, the organisation needed something measurable and tangible to know where to begin.


The business therefore measured their own corporate culture using Hofstede’s Organisational Culture Scan, a set of online surveys and interviews with senior management and general staff.



Map how you do things in relation to others


Mars' organisational culture was then compared with where their stakeholders (e.g. customers, suppliers and new joiners) sit using national culture scores. In that way, the organisation could quickly pinpoint areas of synergy and areas of improvement to meet their global business objectives.


One finding from the Organisational Culture Survey for example was that Mars’ corporate culture was relatively open & loose. Open & loose organisations see themselves as easy-going and agile. Communication tends to be informal and information is shared easily across hierarchical layers and with external groups. People come together quickly to address immediate problems and disband just as fast once a speedy solution has been found.


In his talk, Bas recounts how this approach led to a bad customer experience in Germany. The Dutch team of the Mars office visited their German client to jointly brainstorm a solution through a workshop. To their surprise, the client refused to engage in discussions. In the client’s opinion, Mars’ attitude of “let’s discuss the problem and see what we come up with with the people in this room” was nonsense. To really address the problem, their senior technical experts needed to be involved and get a chance to thoroughly analyse the issue before they could seek a solution. As a consequence, the client refused to continue and actually cancelled the meeting with Mars.


This example illustrates how Mars’ strong corporate culture might work well in countries that tend to take a more task-based and application-first approach, such as the Netherlands or the United States. But it can present issues in places that approach problems with a stronger sense of formality, process or structure, such as Germany or Japan.


Bridge the cultural gap from all sides


After conducting introductory cultural training with senior management and all staff members across their 8 locations worldwide, the company identified various cultural gaps or “pain points” as they called them, that they experienced when conducting business around the world.


To bridge these gaps, a select number of senior managers (like Bas) and employees received more in-depth cultural training through Hofstede Insights. These 10 Cultural Ambassadors taken from their 8 business locations then produced custom, internal training for the rest of the staff to address questions such as:


  • How do we run effective meetings?

  • How do we give and receive feedback?

  • How can we become more effective with our top 20 customers?

The answers to these questions are not straightforward when you serve clients in 80 different countries with employees from 25 different nations.


In fact, the group found that 6 distinct cultural viewpoints needed to be taken for every single topic to effectively cater to the diverse set of internal and external stakeholders.


The Best Cultural Advice is Contextual

In addition to cultural considerations, many other factors also come into play of course, like the overarching business strategy, role-specific priorities, P&L pressures, geographical distance, logistical challenges, technology constraints, etc. The best cultural advice is therefore always adapted to the business context. The Cultural Ambassadors’ knowledge of both cultural theory and the business’ operational environment enabled them to recommend practical changes to their colleagues and managers.


To paraphrase, they advised others on "here’s where you can do it the 'Mars way' and here’s where you’ll need to make the following changes for this particular national culture."


Integrate flexibility into day-to-day operations


The success of the Cultural Ambassadors programme led to numerous internal consulting projects. These projects drove cultural adaptation for its external and internal stakeholders, such as negotiations with customers and management of its supply network.


There is only so much you can learn in a classroom-based, educational setting. Through these consulting projects, the company truly started to reap benefits. “The moment we started to apply our new knowledge and skills to prepare customer interactions, the penny dropped”, explained a sales manager.


Bas recounts a particular example where Nicola, a Cultural Ambassador, helped management prepare for a senior client visit:


The Mars team was made up of an Indian category director, a French sales director, an Australian general manager and a Dutch CFO. They were meeting with the client’s Brazilian CEO, a Chinese category director and a Dutch CFO.


As many people know, finding agreement between people from multiple departments at a meeting is not always straightforward. In addition, Mars also knew that meeting expectations could vary greatly with that many different cultures present.


Armed with Nicola's knowledge of cultural styles and her understanding of the business, management was clear that they wouldn't be able cater to everyone's needs and expectations over one "standard" meeting.


Instead, Nicola focused on identifying the 1 common trait across the diverse set of meeting participants. That commonality was the foundation for designing an initial meeting that would work.


Together, management and Nicola developed a series of steps to take during that meeting, and, more importantly, in other follow-up interactions. This approach allows them to better address the diverse needs on the client side.


Support on your Intercultural Journey


The company has invested in several tools and programmes to assist its employees in developing their cultural intelligence :

  • Employee Onboarding - newcomers take Hofstede Insight's intercultural e-learning course

  • Personal Profiling - employees assess their own personal style through Hofstede Insight's Culture Compass tool

  • Refreshers - staff take regular refreshers in cultural training

  • Unconscious Bias Training - to reinforce diversity & inclusion (between different cultures and other diversity features)

  • Custom Training - tailor-made courses on feedback and effective meetings across cultures


The benefits - with external and internal stakeholders alike


The company attributes its success with external customers and suppliers to their culturally diverse approach. According to a sales manager, the business’ cultural intelligence has given him a clear competitive edge against his competitors in the market.


With hindsight, Bas wishes they had applied this approach with external stakeholders even earlier in their intercultural journey. Instead the firm focused on getting cultural flexibility right internally first. A senior manager advises to “focus on early customer wins” to speed up the commitment to cultural adaptation from the business.


Internally, business leaders have also improved how they communicate with their international employee base. For example, senior managers adapt their corporate communication at townhall events to better match their audience's local preferences.


The company’s intercultural success has also raised their profile inside the wider Mars universe. The business unit’s cultural intelligence now attracts talent from other units at Mars Inc , as they see the Mars International Retail Travel division as the place to join to “learn how to lead and run a global business”.


Cultural Flexibility is an Applied Skill - not a Theory


As Mars experienced, classroom-based training can only take one so far in learning a new skill. Developing Cultural Flexibility in business takes 4 steps:


First, you or others within the organisation need to build cultural knowledge of different cultural styles. This can help determine whether a particular business challenge is culturally influenced or not, as many other factors also play a role.


Next, the knowledge needs to be applied to your business context to be truly effective. For example, Mars integrated cultural flexibility into their business strategy, such as "How can we become more effective with our top 20 (international) customers?" and its company-wide activities "How we give feedback (across cultures)".


Thirdly, different roles within the same company involve different activities and priorities. Integrate cultural flexibility into your personal day-to-day by asking "how can I use this right now for my current work goals and tasks?". This leads to actionable, practical strategies that are uniquely useful to you. Mars truly reaped the benefits of cultural intelligence once their people applied it to a specific, immediate activity of theirs, such as upcoming client negotiations.


Finally, as with any skill, practice makes perfect. Or as Bas puts it, "your cultural muscle needs exercising regularly".


He sums up Mars' continuous process to deal with intercultural challenges:

  1. Decide for yourself whether there are cultural factors at play

  2. Hold your judgement

  3. Go into the (cultural) science, use the tools and develop a technical strategy

  4. Implement it, enjoy it, have a laugh, and try again.


Questions


Record your answers to the questions below in this document: <<<Your Answers Go Here>>>

  1. Stakeholders: List the stakeholders involved in the Mars case study above. For example: teams, business units, job functions, informal groups, external organisations, ... Record your answer in the appropriate cell in column A. For each stakeholder or row in your spreadsheet, decide the below:

  2. Challenges Experienced: Was this stakeholder negatively impacted by cultural challenges? Describe the costs in terms of time, money, people or other resources. Record your answer in the appropriate cell in column B.

  3. Actions Taken: Did this stakeholder take any action/help resolve the cultural challenges?Describe the actions, changes and solutions (if any). Record your answer in the appropriate cell in column C.

  4. Benefits Gained: Did this stakeholder benefit from Mars' improved cultural skills? Describe the benefits in terms of time, money, people or other resources. Record your answer in the appropriate cell in column D.

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