Corporate Culture – Part 2

Last week I posted thread that outlined some of the different types of corporate culture and started the process of looking into how corporate culture influences project outcomes. In this week’s post we’ll look at where cultures come from.

Part of the reason corporate culture is so poorly understood is because few organizations appreciate how cultures form. Cultures are invisible and they are hard to define. They develop out of ongoing interactions rather than a single moment in time and they are the collective behaviour of a group rather than the private domain of any one individual. In this post (and next week’s one) we’ll try to peer through the fog a little and glimpse how cultures in real organizations work. To start that discussion, we need to break a culture down into a number of components. For a culture to establish itself it needs to have a source, the ability to spread and mechanisms that keep it relevant or alive. In this post we’ll take a look at the question of where cultures come from, i.e. the source…

I’ve worked with many organizations over the years and through the classes I teach I have heard about the workings at many more. From that background I’ve observed a number of patterns of behavior that directly contributed to the culture within those organizations. In some cases the culture arose spontaneously out of the shared values that a set of like-minded people already possessed (a spontaneous culture). In others, the culture was set by the powerful personality of one or more influential people in the organization. Sometimes those influencers actively tried to establish a specific culture (a conscious culture) and in other cases the culture was simply an unconscious byproduct of one person’s particular style of work (a personality driven culture).

My experience has been that spontaneous culture arise in smaller organizations (start-ups or very small businesses), or, in larger organizations in which the senior management themselves are not providing active leadership to those below. In the latter of those two situations, the many individual groups, teams or departments in the organization may form their own individual cultures and there is no overall pervasive culture that guides the organization as a whole. These fragmented cultures often face internal strife as the interaction of the various cultures act as friction points that sap energy out of the organization.

Personality driven cultures happen without any one consciously thinking about the values that they want the organization to have. The culture arises from the words and actions of one or a handful of very senior executives. A personality based culture reflects that the natural preferences of the person or people who have the seniority and clout to influence everyone else in the organization. If quality is important to them, then their words and actions reinforce to everyone else that quality matters. If sales is the most important thing to them then their words and actions reinforce to everyone else that sales is the most important thing. Personality driven cultures tend to be very susceptible to changes in management. When one person leaves a critical post and another arrives the entire culture can change in a very short period of time. People who have had a change of manager or experienced a merger or acquisition, often report rapid changes in culture that disrupt the way business is done (sometimes positively and sometimes negatively).

The final situation is that of a conscious culture. In a conscious culture the senior management are fully aware of how powerful culture can be and they have taken direct conscious action to set the type of corporate culture that they want. In such situations it is usually fairly easy to identify the source as the most senior levels of the executive are the ones directly setting and communicating their expectations throughout all levels of the organizations. In such situations the senior management are often very open about what they are doing and what their expectations are. Read their biographies or listen to them speak and culture is often a theme they directly discuss on a regular basis. Be it Richard Branson’s Virgin group or Steve Job’s Apple, the leader at the top is actively managing their organization using culture as a tool through which their leadership is exerted. When done well it can unleash creativity for all levels of the organization, it can result in massive levels of personal commitment from the staff (feelings of pride and motivation) and it can align the organization with the customer’s real needs.

Of course there are many executives who are aware of what a positive corporate culture can achieve and most executives would claim that they are actively trying to instill an effective culture. Evidently however there are many organizations where those efforts have failed or been perverted. In looking at those organizations, it is clear that a slogan, an occasional speech and a framed mission statement doesn’t do the job, but that leaves us with the question what does…

In the third part in this series we’ll look at the mechanisms through which cultures spread, how they stay alive and what it takes to really influence a culture in positive ways … Read part 3