The notion that culture is inextricably linked to business performance is growing in acceptance as we are finding that companies with strong and vibrant cultures have a greater tendency to outperform those with undesirable cultures (see Firms of Endearment). One of the key learning’s we can take from organizations that vigorously cultivate their cultures is that they rely less on financial parameters to make decisions, and instead encourage the attributes of their culture to drive decision-making.
The paradox of financially based decision-making is that it actually hampers financial performance. In fact it hampers our ability to develop a deeper understanding of what culture is and how to evolve it.
Financially based decision-making is a quantitative process, which seeks to guide and justify decisions based on numerical formulas. Numerical formulas are incapable of assessing human-based values or intrinsic motivations such as the need to feel connected to others or the desire to find meaning in our lives. These states of intrinsic motivations cannot be measured numerically.
The paradox of financially based decision-making is that by relying heavily on the numbers we are leaving out a wide range of factors that lead to people wanting to connect with a company, a brand, a product, or a service. We can conduct market research to determine the percentage of people within certain demographics that will have a leaning towards one type of a product or another, but numbers based market research and the left brain type of thinking required to conduct this level of analysis shuts us off from the creative flow that enables us to infuse our work, our products and services, with genuine authenticity.
Genuine authenticity cannot be measured in a spreadsheet. It can’t be correlated in a psychographic survey or mass-produced on an assembly line. The paradox of financially based decision-making is that being truly authentic requires courage – the courage to be us – while financially based decision-making is most often based on risk mitigation, which is fear based.
It’s not that we want to shun the use of financial parameters in our decision-making. In fact I consider myself to be somewhat of a pro when it comes to financial analysis and frequently work with the numbers. The goal, however, is to use the numbers as a tool for decision-making, not to make them our God.
One way in which organizational culture can be defined is: an authentic expression of the unique personality of an organization. Companies that rely too much on the numbers struggle even to know what their culture is. Discovery of culture comes when we depart from the practice of risk mitigation and embrace the unknown uncomfortable process of organizational self-expression. The more the business world explores the correlation between culture and performance, the more we will see the connection between authentic self-expression, and the compulsion that our audience will feel to connect with our brand, not just buy from us.