Whether we are talking about organisations or nations, the key differentiator of performance is culture.
Culture in Organisations
The culture of your organisation is either your biggest asset or your biggest liability. Who you are and what you stand for has become the most significant differentiator of performance. Strong vibrant cultures that are vision-guided and values-driven create high levels of performance because they attract and keep talented people and they inspire employees to go the extra mile. A strong positive culture creates internal cohesion and enhances the organisation’s capacity for collective action by building trust. Your organisation’s culture is a liability when it displays high levels of cultural entropy: when limiting behaviours such as blame, bureaucracy, internal competition and manipulation inhibit the smooth functioning of the organisation.
Culture in Nations
The most successful nations are those that display high levels of social capital. They operate with high levels of trust. They deliberately build their social capital by creating rules, regulations, systems and processes that support law and order and at the same time display high levels of integrity around how the rules and regulations are enforced. They embrace democratic processes that focus on equality, openness, fairness, transparency and social justice. Widespread mistrust in a society imposes a “tax” on all forms of transactions, a tax that high-trust societies do not have to pay. This “tax” is a reflection of cultural entropy.
For more information, see:
Richard Barrett, Building a Values-Driven Organisation: A Whole System Approach to Cultural Transformation, Boston, Butterworth-Heinemann, 2006
Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity, New York: Free Press, 2005