Business impact of a weak or misaligned organizational culture

Business impact of a weak or misaligned organizational culture

The business impact of a weak or misaligned organizational culture

The costs of a misaligned organizational culture

The business impact of a weak or misaligned organizational culture has become more pronounced over the last couple of years as company after company, from banking, insurance, auto manufacturers and energy utilities have experienced billions of dollars in fines and major declines in share price ultimately resulting from a misaligned or even toxic corporate culture.

Corporate culture provides the key differentiator that elevates performance to the next level

Culture has a powerful positive or negative impact on business performance, company reputation and brand value and should be of increasing concern to CEOs and Board Directors.

The consequences of a misaligned organizational culture:

On the other hand, Southwest Airlines and its “culture of LUV” has contributed to 43 straight years of profitability, plus the highest customer satisfaction scores in the airline industry. And the “innovation culture” at Amazon enables it to penetrate and dominate in multiple business sectors by disrupting old business models and revolutionizing the customer experience.

The economics are compelling, manage culture well and the organization can experience growth, brand recognition and financial rewards that attracts and keeps employees and makes customers highly satisfied. Manage culture poorly and the organization may experience massive fines, customer defections, high employee turnover and loss of brand and shareholder value.

When organizational culture does not align with the strategic goals of the company, optimal performance will be impossible to sustain. Just as a garden must be carefully tended to keep weeds from taking it over, culture must be consciously maintained to prevent it from morphing into something unintended.

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

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