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What is Organizational Behavior? How to Build the Business You Really Want

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Whether you call it culture, ethos, or values, every small business wants to distinguish itself through the intangible vibe that underpins it.

As the old guard moves on and Millennials start to fill the workplace, having an understanding of what your company stands for is more important than ever.

You will lose out if your organization doesn’t know what it really represents. You will lose good employees to companies with a better cultural fit. You will see applications decline if word gets out that you’re not practicing what you preach.

Luckily, there’s a whole branch of psychology dedicated to understanding the behavior of organizations—organizational behavior (OB). Clever name.

Today, we’ll look at what organizational behavior is, how you can understand where your business stands, and how you can use that knowledge to make your business stronger. I’ve also created my own organizational assessment system (BOFP—read on to find out what that stands for) to help you up your game.

What is organizational behavior?

Organizational behavior is the study of interactions between people and organizations, people within organizations, and organizations themselves.

In other words, it’s how organizations interact with people and other organizations.

In business, organizational behavior can be used to understand what sorts of people are going to thrive in your business and what sorts are going to suffer. Knowing what you want your organization to look like allows you to manage your business better and to walk the values talk.

I don’t want to spend a lot of time beating around the bush—this is science. Organizational behavior is studied by psychologists, using classic techniques. You can quickly get into very theoretical terminology and speculation, which is unlikely to help you in your day-to-day.

If you’re really interested in the academic side of OB, you can check out any one of the many online certifications or courses focusing on it. I’ve heard great things about the certificate program from Harvard, for instance. Actual retail price: $10,800. You could also check out the much lower priced Coursera options.

How to manage organizational behavior in your business

Instead of wrapping our propeller in the weeds, let’s talk about a practical application of organizational behavior.

Imagine brewing a beer. When you first brew, you might think, “I want an imperial stout,” so you go out and brew an imperial stout.

The longer you do it, though, the less the name attached to the beer holds importance.

Instead, you think, “I want something dark, smooth, high ABV, and not very hoppy.” Then you work out the details of that and discover that you’re making something like an imperial stout. But the idea stems from the flavor profile, not the name.

Similarly, as a small business, you probably think, “I want to be like Google/Uber/Capterra.” So you buy a ping pong table and get everyone snacks.

But how do you determine the details that make up the flavor of your business? I developed Brown’s Organizational Flavor Profile (BOFP) for just that.

Brown’s Organizational Flavor Profile

BOFP was developed about five minutes ago, by me. It’s called “Brown’s” because it reminds me of an Alton Brown sketch where he explains how to choose the right wine for your coq au vin by explaining flavor profiles. C’est la vie.

The idea of BOFP is to benchmark your organization’s existing profile against the profile you have in mind for it.

Build an organizational profile

Before you can measure and shift your focus to align with your vision, you have to have a vision.

For BFOP, I recommend planning your company profile on a five-point preferences graph (illustrated below). While you may have some specialized values to measure, there are seven that I recommend, dealing with the organization’s interaction with its employees:

  1. Formality of work environment [Shorts and Flip Flops Suit and Tie]
  2. Frequency of overtime work [Never Every Week]
  3. Business hierarchy [Completely Flat Strict, Level-Based Structure]
  4. Employee extracurriculars [Weekly Happy Hour Only a Holiday Party]
  5. Technology leniency [Pick Your Own Laptop Regulatory IT Requirements]
  6. Perks for employees [Shuttle Bus Provided 401(k) and Health Insurance Only]
  7. CEO-employee interaction [Buddy-Buddy Boss-Subordinate]

Make sure the descriptions aren’t leading. You can’t have “fun and great versus boring and stodgy.” You might think in those terms, but you want people to be free to answer as they see fit and not feel obligated to tell you what you want to hear.

Create a baseline

Sit down and figure out what you think your business should look like, first. For each measure, you’ll determine the ideal for your business.

If I were to score Capterra, for instance, it would look like this. This is what I, personally, imagine we’re looking for in life, so take it with a grain of salt.

A baseline BOFP for Capterra

This is your BOFP baseline score. This is what you want your company to look like. Now, you need to figure out what people actually think of your business. You can do this super easily in Google Forms.

I asked a bunch of my colleagues about Capterra, and here’s what I got:

Capterra’s BOFP responses from about 60 employees

What to do with your new insights

Your employees’ scores are going to vary from your perception or idealized scores. The question you need to ask yourself is, what does that variance mean?

On the one hand, it may be that your business is doing a poor job of explaining itself to the people who work there. Perhaps you don’t offer happy hours often, but your employees go out on their own and count that as a perk. Maybe that’s good, or maybe it opens your HR department up to complaints about drunk coworkers.

With the results of your survey, you can now go back and either change the way you run the business or change your expectations. For Capterra, my best guess was that we want to be middling on tech leniency, but people reported feeling much more on the regulatory side of things.

I can reassess what we want—I suppose that’s up to someone who’s technically “in charge,” but I could still give it a shot—or I could try to make the tech policy less restrictive.

Once you’ve developed your vision, grabbed your current snapshot, and shifted your policy or communication, then it’s time to let it ride. Give it six months or a year and iterate.

You can also run this prediction and survey again with your vendors and clients to determine what your organization to organization profile looks like.

How to use your OB insights to make real change

Through all of this, you can refer back to some of the more accessible research on organizational behavior to figure out exactly what your company needs. To make this work, you need to work from the abstract to the practical.

Take meetings. Some recent research out of Harvard takes a look at meetings and why we’re spending so much time in them. When assessing the situation, the researchers didn’t advise to “Focus on working as a team,” or any of that fluff.

Instead, they recommend real actions, supported by research from the OB field. Assess the state of your business to determine actions, monitor the impact of those actions, and reassess once the actions have had their impact.

These are actions you can take to achieve shorter, better meetings. With your baseline and actual BOFP in hand, you can look at ways to shift your organization toward its idealized self through actual, scientifically-backed steps.

The end goal

A colleague —thanks, Christina—recently sent me an article on company culture, which asks, “If asked to describe your company culture in five words, what would you say?” What I want to impress on you is that it’s a two-way street.

Will the five words you use line up with the five words your employees use? How about the five words your biggest customer or supplier would pull out? By measuring the space between the sets, you can start to think about both your realistic goals and the perception your business promotes.

The more you monitor your profile, the more you’ll be able to make smart choices about the levers you pull. In the end, you should have clear set of tools that you know, due to testing, can be employed to move your company one way or the other.

I would love to know what you think about this. I like the system, but how would you change it? Shoot me an email or drop a line in the comments below. The more input I get, the more we can refine the process.

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About the Author

Andrew Marder

Andrew Marder is a writer for Capterra. His background is in retail management, banking, and financial writing. When he’s not working, Andrew enjoys spending time with his son and playing board games of all stripes.


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