- Posted by Jon Hellevig
- On January 11, 2012
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Awara has the expertise, resources and in-depth understanding of the Russian business environment needed to help our clients build a modern, innovative and winning corporate culture. By a corporate culture audit, we can identify the weaknesses in the corporate culture and help draw a plan for upgrading it so that the company can reach its full potential on the Russian market.
In this paper, we explain how Awara carries out a corporate culture audit and how we can help you to implement a desired corporate culture in Russia.
Awara’s Approach: Considering a Business in Its Entirety
Awara is different to other organizational consultants because we look at a company’s entire corporate culture in our audit. This is in line with our conviction that a corporate culture is the aggregate reflection of all actions of a company, decisions and behavior of its management and all of its employees, as well as all the business processes. That corporate culture is the sum total of all behavior and operating practices (formally sanctioned or not) of each individual employee as part of the collective of employees. We do not, as the typical organizational consultant does, restrict the concept corporate culture to psychological issues such as “the mindset and instincts” of employees and soft-issues as corporate traditions and rituals. We thus look at every element of the business in unison to understand what part of its culture needs to change in order to reach its full potential. This, whereas the psychologically bent organizational consultants concentrate merely on the psychology of behavior, relying on surveys and casual interviews.
We believe that really business management skills are needed in order to identify and change the issues that affect a company’s culture. We analyze the key aspects of the company’s business in terms of how they are organized, and how they function and engage the best specialists in the relevant fields of business to do so. In this work we engage the best specialists in the underlying fields of business. Our team consists of management consultants, organizational consultants, lawyers, tax specialists, accountants and IT specialists, as well as human resources specialists.
We then describe the present reality in regards to those issues and identify problem areas. This concludes the audit part of the work, and after that we move to the change process which starts with discussing the audit findings with the key executives. After the dialogue with the company executives we develop an action plan, and then we go on to assist the company in actually implementing it.
The main audit highlights the flaws in what should be the primary aim of each firm: to profitably satisfy customer needs. We ask the question: is this company organized for success? We look for obstacles preventing a business from reaching its full potential. We reveal what stops the company from having a modern and flexible business environment in which innovation can thrive.
Our work on the audit consists of an expert analysis of the key aspects of business by looking at the facts as they can be observed. Depending on the case, and the client’s willingness, we may also employ a variety of other methods. These include formal and informal interviews with top management, middle management and specialists; questionnaires and surveys; focus groups; interviews with external sources such as suppliers, customers and former employees; and we may even act as a mystery shopper making test purchases of goods and services.
Below we present the main categories of issues that we focus on in a corporate culture audit.
Main Categories of Issues in a Corporate Culture Audit
1. Mission, vision, strategy
2. The organization model
– Corporate Organizational Structure (legal entities)
– Staff organization
3. Level of Teamwork in the company
4. Decision making systems
– power hierarchy
– decision making processes
– empowering – taking ownership
5. Internal Communication practices, procedures and rules
6. External Communication practices, procedures and rules
7. Brand Image
8. Adequacy of IT-Systems for the corporate culture (ERP, CRM, etc.).
9. Accounting procedures and systems
10. Reporting procedures
11. Corporate policies, rules and other norms
– Formal policies
– Actual policies (i.e. formal vs. actual policies)
– The degree to which the policies are actually adhered to
12. Document flow
13. Human resources policies
14. Interactions with customers at each stage
15. Degree of risk optimization
16. System of Corporate Governance
17. Internal Control systems
18. Creation of organizational capital
How We Implement a Strategy for Change
After the audit, we engage the company’s executives in a discussion about our findings, and together we brainstorm for solutions. This process is carefully designed to allow leading executives to better understand their business and its place in the market.
Using SWOT analysis, executives identify Strengths, Weaknesses, Opportunities and Threats facing the company. Using the PEST method, executives identify Political, Economic, Social, and Technological factors that affect the environment. Executives may also want to consider ecological and regulatory factors.
Guided by their vision and mission statements, executives will consider what their company will do, where it fits into the current market, and how it will win over the competition. When they have arrived at their strategy, they engage all key employees, including middle management and specialists, to further develop it.
It is important to engage key employees for two reasons. Firstly, because these are the people expected to lead and manage the change, it makes sense for them to be part of shaping the strategy. Secondly, because these are the people who hold the knowledge that informs the strategy, these people know how the business works.
When putting the strategy into practice, the whole company needs to be engaged. All individuals have to be made aware of the new strategy in terms they can understand. They need to feel the commitment to change as their own. To encourage the whole company to feel a part of the change, leaders need to regularly and effectively communicate the strategy to all.
The Importance of Vision, Mission, and Strategy
More often than not, the reason a corporate culture isn’t working is because the company lacks a properly articulated vision, mission and strategy. Vision, mission, and strategy must be properly understood before an effective strategic plan can be put together.
The vision statement is short, succinct, and inspiring. It explains how the leaders see the future business environment, and how the company fits into this. It outlines where the leaders want the company to be in the future, and the steps needed to get there.
The mission statement defines the main purpose and aims of the company, and what it will do to achieve its vision. It sets out the goals the company will pursue, and the ways it will accomplish them. It defines the kind of industries the company should be involved in, the products and services it should offer, and what change is necessary for success.
There is some overlap between the vision and mission statements. They feed into each other. The main function of both statements is to create a sense of direction and opportunity for the company. They are essential parts of the strategy-making process.
Sometimes it is also helpful for companies have a statement identifying the company’s core values – the principles that guide internal and external communications and conduct. It doesn’t matter if statements of vision, mission and core values exist as separately published documents or not. What matters is that they are considered, and reflected, in the strategy for how to go forwards.
Planning a strategy is really about a deep analysis of the company’s market place, its competitive position and its direction. Strategy is essential to understanding what a business needs to do to be a success.
The strategy contains guidelines for allocating human, financial and capital resources. It gives instructions for how the company can achieve its ambitions, and sets financially and quantitatively measurable goals.
– Does the company have a pronounced strategy? Has the strategy and vision been communicated and understood? Does the company have an assessment of its corporate culture? Does the company have a pronounced goal of an ideal corporate culture that it wants to reach? Does it have officially pronounced values and a mission? Does the company have pronounced ethical standards, if not, does the company have ethical standards that are tacitly known
– How do these pronouncements compare with the actual reality
– Do staff members believe in the products and services of the organization