​Culture Is a Business Issue

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​​Just what is culture?

Is it about organizational ethics and values?

Is it about attitudes towards risk and the protection of information?

Is it about exciting and stimulating imagination and creativity?

Is it about attracting and retaining talent?

Is it about stimulating teamwork, collaboration, and the sharing of goals and success?

Is it about engaging in a shared voyage to success?

Is it about all of these and more?


My recent post on auditing culture stimulated a number of social media comments and discussions. Some believed that culture is fundamental to the success of risk management and other activities, and therefore should be assessed by risk management and audited by internal audit. Others felt that this is something that is a human resources responsibility and should be left to them.

A recent publication by TriNet, Culture Is a Business Issue (registration required), makes interesting reading. The authors write:

"The reality is that culture is a business issue that has significant impact on a venture's ability to generate a return on investment and should be prioritized and measured just like other business objectives such as financial growth, product development, sales, marketing, and the like."

They include some interesting examples of organizations, their culture, and what they have done to ensure practices align with desired behavior.

Unfortunately, the examples are of smaller companies and they don't describe implications for those with global operations.

I thought I would share some questions that might help an assessment of whether the culture of the organization — in practice — is what the executive team and the board want it to be.

  1. Have the executive team and the board defined the culture they want?
  2. Has it been clearly communicated to employees?
  3. What measures are in place to measure whether the desired culture is achieved, and what actions are taken when it is not?
  4. What is the effect on the organization if behaviors are not aligned with the desired corporate culture? Which strategies and objectives are likely to be affected and how? Is this significant? Does it merit action?
  5. Does the management team reinforce the message about desired behavior when they meet employees and others? Are they credible?
  6. Does the management team walk the talk, setting the example they want others to follow?
  7. Do managers (and risk and audit professionals) pay attention to signs that the desired culture is not in place?
  8. Are indicators of deteriorating culture noticed and action taken (for example, employees failing to attend or arriving late at meetings; a high level of stressed managers and staff; loss of key employees and failures to hire talent when needed; a scarcity of smiles and laughter in the office; and so on)?
  9. When actions such as reorganizations and compensation decisions are made, is the potential impact on culture considered?
  10. Are compensation and related programs based, at least in part, on whether employees' behavior is consistent with the desired culture?

I welcome your comments.

​The opinions expressed by Internal Auditor's bloggers may differ from policies and official statements of The Institute of Internal Auditors and its committees and from opinions endorsed by the bloggers' employers or the editors of Internal Auditor. The magazine is pleased to provide you an opportunity to share your thoughts about these blog posts. Some comments may be reprinted elsewhere, online or offline.​



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