Some of the most successful companies in the world are able to create environments their employees love to go, and job seekers desire to work from. Identifying and developing a company culture that is healthy and productive can make a huge impact on an organization’s success. Organizational culture is the set of values, expectations, and practices that guide the actions of all people in the company. A great culture leads to improved performance, while an ineffective company culture can damage even the most successful organizations.
Organizational culture can be considered a key driver of organizational performance outcomes. The culture of an organization affects the behaviors of individual employees and therefore has an impact on performance (Calori & Samin, 1991). In addition, considering the effect culture has on an organization makes it a key factor in driving superior business performance.
One of the goals of developing a great culture is to give the organization a competitive advantage in the workplace. Studies report that the culture of an organization can create a competitive advantage because of how it influences the organization through employee efficiency, performance, satisfaction, and dedication. What happens in most effective organizations is that they have high levels of adaptability, internal harmony, employee participation, and a powerful and clear mission. Companies that have a united, connected culture can reach higher levels of financial performance so long as they function in a steady environment. At the same time, it is also important to consider that since companies operate in an increasingly dynamic business environment, to affect organizational culture positively is not an easy task. Some experts suggest that firms must consider both financial and non-financial performance when considering the impact of organizational culture on an organization.
Moreover, there are many contributing elements that affect organizational culture as well as help build it. Senior executives have an effect on both how culture is developed and carried out. Understanding organizational culture and how it affects performance is challenging due to varying success criteria at the project and portfolio level. What makes it even more difficult is the fact that each company is different from another, and each one of them operates in different industries and contexts.
Projects and company culture
It often happens that lots of organizations do not have a culture that promotes project disciplines. For this reason, establishing a culture for project work is a priority for organizations engaged in working with projects, especially for those that want to maximize their results by applying good project management practices.
Studies report that team culture should be addressed at the beginning of a project in order to drive behavioral outcomes that improve team performance. Culture in project work is highly correlated to team efficacy and project success; in addition, a collaborative team culture can benefit the project-based organization.
One of the key roles in project culture is the project manager. The motivation of the project manager is extremely important to reach project success. At the same time, to execute a project successfully, it is also critical to establish a good level of motivation within a project among group members. Moreover, project culture can influence project success. For example, researchers state that environmental pressure on IT projects can affect the relationship between project performance and organizational culture. Having said that, it is pretty clear that organizational culture can have an impact on stakeholders, projects, and businesses. All these factors should be taken into account at the strategic level.
Project Portfolios and company culture
When companies need to deal with culture at the portfolio level, they should consider the interconnected nature of projects within the organization. Generally speaking, the role of project portfolio management is to set strategic orientation and direct projects. At the same time, it is important to consider that the culture of the organization is incorporated in its strategic orientation. In addition, the culture of an organization and the country where the company resides provides context to how organizations should execute projects, programs, and project portfolios.
Organizational culture plays a role in the strategic orientation of the organization and adds a layer of contextual complexity to the PPM process (Martinsuo & Killen, 2014). For example, Teller and Kock (2013) report that a risk management culture can have a positive effect on portfolio success. From an innovation point of view, it has been proven that a strong innovation culture leads to higher levels of project success. Corporate innovation culture could have a positive effect on the strategic orientation of the organization as well as its potential for portfolio success. Therefore, the perspective of the company helps guide its strategic orientation and priorities.
Managing a portfolio of projects, its interdependencies, and resource needs is complicated for many companies. To assess the complex dynamics of PPM and organizational culture, it could be useful to understand how cultural values are impacted when PPM is introduced.
Keep in mind
It is important to note that organizational culture is created through coherent and authentic actions, not statements or declarations. A great culture in action can produce lots of benefits, such as team members adapt rapidly to new customer needs, managers support employees who need help, and executives respond to a crisis in an effective and proactive way. Developing a healthy and productive company culture can make a huge impact on an organization’s success.
Francesco Pecoraro, PMP, PSM, PSPO, SSYB, SSGB, SSBB, CL, CC is the founder of francescopecoraro.com where he shares useful and practical information about project management, program management, project portfolio management, and agile methodology. Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking, and leadership expert. Francesco writes about project methodologies, program, and portfolio management.