THE CORPORATE CHALLENGE
LMD ARCHIVES (MAY 2012)
Omar Khan cites five examples to explain how corporate culture can be undermined
There are only two real problems with discussions on culture – though, alas, they are potentially crippling ones, and people emphatically bob their heads in support of the proposition that it matters. The first is that no one is sure what culture really is; and the second is that while everyone agrees that it matters, no one is quite sure in what way.
Without some mode of identifying its impact, it’s hard to create cultural change or even leverage our existing culture for all it’s worth. To simplify this, here are five examples that shine a light on corporate culture.
CULTURE #1 Company A indicates it has difficulties in communication, interpersonal relationships and decision-making. And the observation of the modes of interaction throws up some obvious areas for improvement.
To wit: too much interrupting of each other; getting excessively emotional about proposed courses of action; getting frustrated if others don’t immediately get your point; everyone wanting to win at the same time; and taking forever to arrive at a decision.
Despite this being pointed out, both in real time and offline – and despite acceptance by the group that these traits were in evidence, and fixing them would be very helpful – nothing changed, despite cosmetic adjustments to the decision-making process and the manner in which meetings were conducted.
CULTURE #2 Company B wanted to disseminate its core capability of innovation far and wide throughout the business. R&D was central to its success. Certain hubs of the business demonstrated what we call ‘positive deviance.’ They were centres of excellence and best practice.
Memos were generated highlighting these positive deviants, deriving lessons from their experiences – and they were meant to encourage people to apply these principles and connect with their cohorts, to raise the bar on enterprise-wide innovation.
Despite ongoing exhortations, the memos weren’t passed on, no significant lateral communication ever transpired, and insights and information would not flow across departmental, hierarchical or geographical boundaries.
CULTURE #3 Company C found its meetings to be an officious, enervating, corroding waste of time. This was so despite it being a business with a corporate mission that had a strong social dimension that excited and enrolled many of its members. Knowing that most of its managers genuinely wanted to advance the work of the business, an ‘expert’ was called in to help monitor and facilitate the meetings. The expert decided to dispense with some of the most troublesome formalities of the company’s meetings structure, and instituted a more freewheeling dialogue process, aiming to generate real consensus. This polarised the group even more – splitting them between those who appreciated this approach and those who found that this made meetings even longer.
CULTURE #4 Company D decided to centralise all its technical functions into a single service unit. Whereas earlier, technical specialists were assigned to specific projects, they were now to market their services and sell their value to business units and treat them as customers. The business units would now be billed for their services, so they would opt in or out. The technical experts were vehemently opposed to this, and many of its best talent threatened to leave the company.
CULTURE #5 Company E had been criticised by the press for not factoring in ‘social costs’ and being environmentally irresponsible. A multi-year effort to put safety above all else, public and employee safety seemed to succeed – except in one aspect. Namely, reporting issues caused by peers and bosses.
Highlight this as they would, the new norm faulted in this respect – particularly where peer group relations were implicated. This remained true, despite the thrust for rebranding and rebuilding public trust.
ANALYSING CULTURE The very best entrée into organisational culture is to look
out for the shared assumptions of a group. In the case of Company A, it turned out that the deeply held assumption was that only ideas that survived in the fire of animated debate could be construed to be ‘valid.’ Therefore, the imposition of greater politeness was intellectually accepted but internally rejected.
What did help was to extract the ideas as they emerged, and separate them from the temporary emotions, frustrations or interruptions – and to thereby ensure ideas, and not their presentation, took pride of place in debates and animated exchanges.
Company B had been built on a culture that recognised the business area as one would a surgeon’s operating theatre – your domain of expertise, for you to manage and run, as long as the results came in. Emotionally, it was more akin to a home – not to be intruded, except by invitation. Therefore, someone would have had to set this up as a formal exchange with structured follow-ups. They could have decided when, where and how the exchange would take place. So here, a more directive style was needed to instigate, and a more invitational style in terms of creating openness to exchange.
Company C had a medley of people from a variety of backgrounds. Some had been part of boards that operated according to a specific structure, and they saw this as the linchpin of good corporate governance. Coming from different business backgrounds, others relished the dialogue and looked forward to working towards consensus on key issues, rather than being bound by criticism. This had to be surfaced, allowing people to share their experiences and concerns. They had to articipate in creating a new sub-culture, rather than having one – no matter how benign – imposed on them.
Company D had recruited technical people who were proud of their credentials and bona fides. Digging deeper, they had no idea how to sell or market, or how to establish the value of what they were offering. This was an entirely alien skills set; and if technical expertise was primarily being sought, asking the same person to miraculously shift into this role was as close to science fiction as could be. Looking at the real end in mind, and agreeing how that could be achieved with the participation of business units as well as the technical leaders, was badly needed.
Company E had a strong union issue that kept people from pointing out mistakes of peers. Removing safety hazards otherwise was fine – they got the point. Again, the unions had to be engaged to see that improving safety was different from getting someone in trouble. And if the mistake was repeated or committed through negligence, then union loyalty should demand taking a stand – lest everyone go down with the ship. This reframe was possible, once the cultural reality was appreciated.
DEFINING CULTURE Culture is essentially an established pattern of behaviour built on shared basic assumptions generated by tackling crucial external adaptations and internal challenges of integration.
Healthy cultures form when the pattern of behaviour has been successful enough to be considered rationally valid, and then taught to newcomers… and which is extended and deepened and broadened by the commitment of its members.
The nature of external opportunities and challenges, and the nature of internal structure, size and other elements, determines the assumptions and behaviours needed – there is no universal culture.
CHANGING CULTURE If you wish to effect culture change, you have to work at three levels. The first level is to review the structures of the culture – organisational design, processes, organisation charts and networks need to be at least reviewed, perhaps adapted, and in extreme cases re-engineered.
The second level is to review the beliefs-in-action or values-in-action, the consistent behaviours evidenced at different levels and parts of the organisation.
The third level is to review the underlying assumptions that are generating these behaviours. Some of these are personal and require work with specific individuals. Some are interpersonal and require working on relationships, while some are embedded in the fabric of the organisation and require working with – and through – teams and units.
By making culture visible, vivid, palpable and concrete in this way, we gain one of the most indispensable levers for catalysing and sustaining organisational growth and change.