THE BLOG

Organizational Success and Culture

06/02/2015 06:15 pm ET | Updated Jun 02, 2016

My passion and love of business began as a young child. My father, a Cuban political refugee, was a serial entrepreneur. Despite his best efforts, none of his business ventures ever achieved any commercial success, but his journey sparked in me an immense desire to understand how successful businesses are structured and managed. What I have come to appreciate is that no management structure or style is certain to result in business success but organizational cultures that encourage initiative, innovation and creativity are more effective than those cultures based on control.

Working with my father provided me an opportunity to observe him regularly interacting with employees. He adopted a command and control management structure coupled with a patriarchal management style to operate his business. I don't think this was an intentional decision but like many new and less experienced entrepreneurs, organizational culture isn't usually a factor considered by the entrepreneur when determining how to build a successful enterprise. Instead, organizational cultures are often a byproduct of necessity driven by the demands of the business coupled with the leader's personal value system. For example, many businesses identify the work which needs to done and hire employees to do the work. The leader's expectation is that employees do the work they want done when they want it done. My father was no different, in that he expected employees to do exactly as they were told and not to question his instructions simply because he was the boss. He determined what work needed to be done based on customer demands and his expectation was that employees did as they were told.

It is commonplace for leaders to choose management structures and styles that align with their own value systems. Like my father, many leaders possess a value system where the person at the top makes all the decisions and everyone else has to simply conform or risk losing their job. This is especially common in small businesses and start-ups where the leader's livelihood is directly connected to the organization's performance. In these cultures, leaders are fearful of losing their livelihood and use the same fear to lead their employees. So, it is not surprising that so many of us have experienced unjust and inequitable working conditions in command and control cultures where leaders use fear and aggression as the means to drive employee productivity.

A few years ago, I worked for a company, the CEO, fearful that she would lose her livelihood, routinely bullied some employees and favored others. By favoring employees, she sought to gain the loyalty of those employees she liked and perceived to be productive so they would continue to work for her. By bullying employees she sought to use fear to improve employee productivity. Though bullied employees continued to do the job they were hired to perform, the level and quality of their performance was low because they were constantly coping with being bullied.

Interestingly enough, the favored employees were also unproductive because they were coping with the abuse they routinely witnessed by their CEO. The favored employees felt helpless because they could not protect their co-workers from the CEO's abusive treatment. The CEO created a habitual cycle of bullying and low performance. The net result of the CEO's management structure and style was employees felt no loyalty to her and spent much of their time consoling one another instead of working. Eventually, the very thing she was trying to protect, her livelihood, was lost. Would she have saved her own job had she opted for a different organizational structure or a nicer management style?

By contrast, another company I worked for also used the command and control management structure but the President's management style was a mixture of laissez faire and complacency. Like the CEO who bullied employees, this President also feared losing his livelihood, but instead of bullying employees, his leadership style was to build personal loyalty by being nice. He seemed to operate under the assumption that leaders who hold their employees accountable were not nice. As a result, employees were rarely held accountable and employee productivity and loyalty was low to non-existent. Though, today this company still exists, the President's complacency has positioned the company in a downward financial trajectory, and time is its inevitable demise.

Though, historically, the command and control management structure and its many iterations of management styles has been successfully used by many companies, there is evidence that organizational cultures based on value systems that reward initiative, creativity and innovation result in greater employee productivity, loyalty and engagement than cultures based on control. In other words, organization's that adopt command and control management structures, even when coupled with friendlier management styles, are likely to find that employee productivity, engagement and loyalty are not as high as those organizational cultures that encourage initiative, creativity and innovation.

An organization's culture should not be a byproduct of necessity but instead be viewed as a means to increase the chances of an organization's success. Next time you are considering how to improve your organization's chance of success, ask yourself, what a successful business culture looks like and head in that direction.

Emily Sharp Rains is a seasoned transactional attorney and has worked with over 1, 000 companies nationwide. She is also a serial entrepreneur with an insatiable appetite for building business. Her experience as an entrepreneur gives her a unique insight into the needs of her clients and the perspective of its management. Today, Emily pursues her passion for the law and business through her work at Westminster College where she is an assistant Professor. Rains holds a Juris Doctor from the University of Utah in 2003 and her LL.M. of Taxation from the University of Washington also in 2003. Rains is licensed to practice law in multiple jurisdictions including Washington, Oregon and Utah. To connect with Rains find her on Linked-In or email her at mail@emilyrains.com.