Culture matters in your organization — and I’m not talking about whether you pipe in opera music at your work sites.
Recently, Butler MBA students examined the concept of culture in our “People in Organizations” class taught by Dr. Jerry Toomer, executive partner and adjunct professor.
The Denison Model, developed by Dr. Daniel Denison while at the University of Michigan Business School, shows a definite link between organizational culture and bottom-line performance measures such as return on investment, sales growth, quality, innovation and employee satisfaction.
The model measures culture based on four critical traits of culture and leadership: Mission, Consistency, Involvement and Adaptability. Questions address such areas as core values, customer focus, team orientation and creating change.
The importance of organizational culture can be seen in the example of a fast-growing Indiana company, AIT Laboratories. Since its founding in 1990, the Indianapolis company has become one of the nation’s leading forensics labs and ranks among the country’s top five companies doing compliance monitoring in the misuse and abuse of prescription medicine. A new division, AIT Bioscience, tests pharmaceutical and biotech products.
With this business model, AIT has generated record-breaking growth. In 2009, the company with more than 450 employees generated an 86 percent increase in revenues —the sixth consecutive year the company has reported double-digit increases in revenues. Its organizational culture has earned AIT numerous awards, including being named a Best Place to Work in 2008, 2009 and 2010 by the Indiana Chamber of Commerce.
AIT Vice President and Chief Information Officer Dr. Ron Thieme and Director of Human Capital Derek Doddridge spoke about AIT’s culture in our “People in Organizations” class in November.
Students learned how AIT’s culture fits the Denison Model while also exploring how culture plays a key role in fostering or inhibiting their own organizations’ performance.
Mission. Dr. Michael A. Evans, founder, president and CEO of AIT, is also “The Keeper of the Culture,” according to Doddridge. He noted that senior management looks at the company’s culture as strategically as it does business plans.
Besides having a goal of providing clients with superior toxicology testing, Evans wanted a company that reflected his core values. AIT’s mission statement includes this: “Our services are provided with integrity and quality by employees encouraged with dignity and respect. Each service response is given in truthfulness in order that every client receives continued satisfaction with demonstrated gratitude.”
Consistency and Involvement. Because of AIT’s Employee Stock Ownership Plan, “we don’t hire employees — we bring on new owners,” Thieme said. “We’re about developing great human talent.”
The extensive “360-degree” interview process begins with a coffee or lunch in which a recruiter gets a feel for the person rather than how his or her skills fit the job. This includes 10 behavioral/situational questions, designed to see if the person’s values match AIT’s.
The potential hire also participates in interviews with his or her immediate manager, the next-level supervisor and other key personnel. It is not uncommon for a prospect to come back for multiple interviews.
An extensive three-day orientation includes “Culture Jeopardy,” in which new hires compete for prizes by answering questions about AIT’s culture.
Evans keeps all employees informed of AIT’s performance and situation in the marketplace through monthly Meet the President gatherings, held during every shift. According to Thieme, these have changed from updates on rah-rah financial results during the days of explosive growth to a thoughtful examination of the challenges facing AIT with the uncertainty of health-care reform and moderating growth rates.
Adaptability. In the early 1990s, AIT lost its largest client and 85 percent of its revenue. Evans was urged by some to declare bankruptcy. Instead, he asked each employee to take a substantial pay cut — and all did.
Today, with the growth of its compliance monitoring and pharmaceutical testing business, AIT seems poised to successfully make its way through uncertain times. “One thing about AIT: If a problem arises, people see it, own it, figure out a way to solve it — and do it,” Thieme said. “That’s part of our culture that will never change.”
Chuck Williams is dean of the College of Business at Butler University. Dr. Jerry Toomer, executive partner and adjunct professor at the COB, contributed to this article, as did Dr. Ron Thieme and Derek Doddridge, members of the leadership team at AIT Laboratories in Indianapolis. For more information on the College and its “real life, real business” approach to business education, visit www.ButlerRealBusiness or e-mail Chuck at firstname.lastname@example.org.
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