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Culture is critical to company success and business transformation, but good luck taking advantage of it

A 2013 Booz&Co study, Culture’s Role in Enabling Organizational Change by DeAnne Aguirre, Rutger von Post, and Micah Alpern, is revealing on two levels.

The first level: the direct analysis of results of a survey of 2,200 executives, managers, and employees from a broad range of companies across the world is revealing, showing a widespread belief that organizational culture is a key element of company success. For example, as the authors report,

Eighty-six percent of C-suite executives and 84 percent of all managers and employees say culture is critical to their organizations’ success, and 60 percent see it as a bigger success factor than either their strategy or their operating model.

However, this is juxtaposed with startling statistics about the need for cultural change:

A full 96 percent of respondents say some change to their culture is needed, and 51 percent think their culture requires a major overhaul.

My bet is that three out of four believe their company needs a fairly significant culture reintegration, which tracks closely to the proportion of people disengaged at work.

The aim of the study wasn’t principally to gauge the need for cultural change, and as far as I can tell, the survey did not touch on what sorts of cultural change are needed or desired. I will take the liberty to suggest that the great majority of companies have cultures that reflect the contemporary norms of the late industrial era of business, where the fraying of the social compact between employer and employee has only accelerated in recent years, and where work stress levels are at an all-time high (see Burnout is the consequence of a broken way of work). The real goal of the study was to explore the role that organizational culture plays in business transformation efforts: initiatives to enact business-spread change, usually as the result of the perceived need to adapt to changing market circumstances. And relative to that goal the results are more like an indictment of management than any sort of assurance of the likely success of change efforts in general, and more specifically, the authors state “only 24 percent said their companies used the existing culture as a source of energy and influence during the change effort.”

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As I suggested, there is a second level of revelations arising from the study. The manner in which the researchers position culture reveals the attitudes of a management consulting company in the business of leading change efforts, and perhaps the attitudes of the executives of those client companies. The authors present the premise that culture is something that can be ‘leveraged’ during business transformations, something to be ‘managed’. In the findings above, you see that 45% “do not feel their culture is being effectively managed.”

Ok, this may be mere semantics. Perhaps it is just an inelegant way of saying that culture is something that management needs to attend to, to monitor and invest energy into. My suggestion would be that we intentionally approach cultural discussions in anthropological and ecological terms and frameworks, and not terminology more aligned with engineering and warehouse logistics. We need to start with the perception that organizational culture is about people’s behavior, the values that drive them, and the meaning they derive from their actions and the actions of others. Cultures can be changed by changing values and drives, and therefore changing people’s behaviors. But ‘managing’ culture is next to impossible, because culture is the slowest aspect of an organization to change.

The authors seem to treat culture as a very shallow thing, in that they only discuss cultural self-identification by employees with the company:

Only 35 percent of respondents who said change efforts hadn’t succeeded saw their companies as trying to leverage employees’ pride in, and emotional commitment to, their organizations.

This dissonance between the author’s views of organizational culture and mine is likely the result of differing mindsets. The authors see culture through an integration perspective, which seeks out shared values and those aspects of a culture that appear unambiguous and uniform, such as organizational pride (see the discussion of Joanne Martin’s work by Liese Gerritsen in Metaphors matter: Talking about how we talk about organizations). However, I am thinking of organizational culture through three views: not just a single heterogeneous matrix, but also differentiated into separate subcultures (that may be in conflict with one another). And, just as importantly, I start with the viewpoint that culture is inherently fragmented, with a strong element of incoherence or ambiguity, and therefore tensions within the culture may be more like unsolvable dilemmas than problems to be fixed, at least until such time that major cultural reintegration occurs.

The simple restatement of that might boil down to something like this: is organizational culture too unwieldy and manifold to be effectively used as a lever to assist in business transformation, except in that happy 4% where no cultural change is needed?

The last takeaway of the study — which may be its most unambiguous reward — is that ‘change fatigue’ is the major barrier to business transformation efforts, the accumulation of too many competing priorities and too many recent change efforts when companies don’t really have the capabilities to effectively foster change.

All rolled up, it makes a tough nut to crack.