In this second of four articles on culture within organisations, I explore the challenges of understanding corporate culture and identifying needs for change.
Culture consists in tacit assumptions, patterns of thought and perception that drive behaviour. In today's fast-moving world, such assumptions readily become outdated, inhibiting competitive performance. How, then, can organisations identify when culture change is required?
First, culture aids survival. We cling to assumptions as proven ways to negotiate our world and are quick to reject 'disconfirmation', or evidence that calls our beliefs into question. In the absence of a threat or imperative to pursue an opportunity, 'survival anxiety' is low and meaningful change is unlikely to occur. Organisations thus need a compelling reason to decipher culture and undertake change.
Mergers and acquisitions, along with organic growth, often are sufficient reason. Performance shortfalls such as a steep decline in revenue might signify a gap between stable assumptions and evolving demands. Similarly with new market opportunities: lowering of trade barriers or invention of disruptive technologies might presage a need to question beliefs about business, clients and services. However, if an enhancement to a process or product (i.e., to artefacts) would enable competitive performance under existing assumptions, it is dangerous to prescribe culture change.
Where an organisation has sound reason for questioning the fitness of assumptions, the second challenge is to avoid seeing culture merely as a problem to be fixed. Naturally, managers, and perhaps especially consultants, are drawn to grease the squeaky wheel (or rather, if they are astute, that which might soon begin to squeak).
Nonetheless, to champion the cultural assumptions that remain valid may accelerate transformation, for such strengths afford powerful leverage over intractable outdated beliefs. For example, when investment advisors are dismissive of customer satisfaction levels (a cultural problem), the worth they ascribe to financial performance may be harnessed as a cultural strength to encourage them to seek profits for their clients. Increased customer satisfaction is likely to follow.
Third, there is little point in diagnosing culture only at the level of artefacts such as systems, processes and behaviours. When a patient tells of recurrent headaches, the doctor learns something useful about the problem and the inconvenience the young woman is facing. Similarly with culture, examination of artefacts can illuminate shortfalls in, for example, operational inefficiency or client service. However, for the physician to diagnose the root cause and determine treatment, brain scans and blood tests may be required. Likewise, analysis of culture beyond superficial artefacts allows managers to understand how to introduce change that lasts. As with intractable headaches, similar behaviours may be caused by various assumptions.
Observable artefacts thus should be compared with espoused values (those considered appropriate to both present and future situations). Inconsistencies that emerge likely point to tacit assumptions that are no longer valid. For example, when the firm extols world-class client service (value), a tacit belief that deals are more important than relationships (assumption) might account for the actual behaviour (artefact) of sales managers who neglect customers' needs. The complex nature of, and connexions between, artefacts, values and assumptions can be understood only through an iterative process of deciphering.
This imperative reveals the fourth challenge, regarding diagnostic tools. Culture cannot be revealed through a survey, whilst experience suggests that this is often the approach taken. Within the western management tradition much value is attached to statistics, especially when they adorn PowerPoint slides as colourful histograms and pie charts. This is a cultural legacy of the positivist philosophy that has dominated the natural sciences. Unfortunately, people are less consistent than rocks and atoms, and with social phenomena such as employees' attitudes it is hard to generate meaningful output from surveys. Indeed, reliable, valid instruments can take (even trained social scientists) years to construct.
The burden of survey design may be avoided with the use of off-the-shelf instruments. These generally claim to locate a given culture along various, often two, dimensions. Nevertheless, psychometric support for even these instruments is weak, and to learn that your organisation is relatively high in solidarity or low in external focus offers scant insight into how to orchestrate change (although, admittedly, multi-coloured quadrants look spectacular on a big screen).
As a social phenomenon culture resists quantification even more stubbornly than employee attitudes. For a start, an unreasonable number of questions would be required to probe artefacts thoroughly. Likewise, until initial answers became known it would be impossible to scope the areas to investigate (hence the need for iteration). Similarly, employees may find it possible to identify some artefacts, but assumptions are tacit and unlikely to emerge from casual reflection undertaken during a survey. Finally, culture is a shared phenomenon that is more than the sum of (necessarily individual) answers to an on-line questionnaire.
The right key to deciphering culture is exploration of the meaning behind shared experiences. In practice, this involves assembling groups for a structured and iterative discussion of artefacts, values and assumptions. Insofar as culture is invisible from the inside, marginal views offer useful impartiality and so engaging different groups and sub-groups will lead to greater clarity. The discussion must be contained to reflect realistic ambitions (a survey likely sets utopian expectations). Finally, in assessing which assumptions, values and artefacts need to be upgraded, two considerations - first, promotion of cultural strengths and, second, insistence on attempting only what survival and competitive performance demand - can go a long way toward ensuring success.
Quentin Millington, FInstLM (pictured) helps multinationals to harness the potential of national and corporate cultures to enable executive and organisation performance; he is part-time specialist in cross-cultural leadership at Cambridge's Judge Business School.
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