To truly comprehend an organisation’s culture, it is essential to look beyond what you can see on the surface and understand the underlying beliefs and values that drive the collective behaviours of people within the organisation.

So what are beliefs, values, and behaviours in an organisational context?

At work, people are constantly making decisions motivated by their personal needs or those of the organisation. Most people make decisions based on their beliefs, which they then project into the future. Beliefs are contextual and grounded in the national or ethnic culture that people are brought up in, parental influence, and other past experiences. The trouble is that in such a volatile, uncertain, complex, connected, and ambiguous (VUCCA) world, the past is no longer a reliable predictor of the future, and making decisions based on beliefs and assumptions can be risky.

In this dynamic and ever-changing business environment, the case for diversity at the board and top management level is compelling. Decision-making that draws on the variety of beliefs and richness of life experience that comes from those of different genders, ethnicity, sexual orientation, age, and so on is turning into a competitive differentiator.

Research by McKinsey (Why Diversity Matters, 2015) indicates that when companies commit themselves to diverse leadership, they are more successful. Mergers offer a chance to increase diversity, yet too often key appointments and decisions are made on ‘sameness’. This carries a huge opportunity cost.

Values

Values are deeply held principles that reflect what is important to us. Unlike beliefs, which are contextual, values are universal. That is why common values can create internal cohesion in an organisation.

The purpose of an organisation’s values is to guide the decisions its people make and the actions they take. Whatever their beliefs, when people share and live by the same set of values or principles, decision-making is easier and more consistent. When an organisation declares its values, everyone knows what they stand for and what’s important. In the absence of clear and strong organisational values, people will decide and act based on their individual beliefs, values, and assumptions, which can be the source of problems in M&A.

“If values-focused, it provides a baseline way of behaving and performing that resembles the brand. Once you are clear that this is the way you want to be seen, determine your values; ask whether your people are behaving in that way. Once you get people to accept the values and behaviours, support them in displaying them through reward and recognition, and correct bad behaviour.” – Chief HR Officer currently in the health sector

An organisation’s chosen values are usually conveyed as a set of single words or short phrases, proudly displayed. Everybody within the organisation is expected to embrace and live by the same core values. Additional values are often adopted by different units or teams to reflect their distinctive ways of working.

What values set your organisation apart?

Unless the values are genuine versus buzzwords, and the leaders are constantly communicating them, reinforcing them through their stories and behaviours and embedding them into the organisation’s frameworks, policies, and initiatives, values become lost. Without these important guide rails, cultural dysfunction can set in.

People demonstrate their values through their behaviours, and organisations express their collective values through their culture. Research, including that from Kotter and Heskett (Corporate Culture and Performance) and Collins and Porras (Built to Last), has proven that there is a strong link between the alignment of employee and organisational values and financial performance, so they are worth focusing on in an M&A context.  Click here to find out more.

To your success,

Linley Watson
Australasia’s Authority on M&A Culture Integration