The Elephant In The Boardroom

by Richard C. Reale

What is organizational culture?

Only a few decades ago, the word "culture" spoken in an organizational setting implied the contents of a Petri dish rather than the mores on Mahogany Row. Until recently, speaking of corporate culture was taboo in most organizations. Corporate culture was – and in many cases still is – the elephant in the boardroom that everyone knows is there but no one admits to seeing. While organizational structure is relatively easy to describe; organizational culture is less tangible and more difficult to identify. Culture emerges and evolves over time in a more clandestine way. Organizational culture comprises the attitudes, beliefs, values, norms, and customs of leaders and their followers.

Every organization has some anomalies in its culture. The gag order placed on discussion of culture most likely stems from a belief that placing culture under the microscope would quickly become personal and threatening. However, not understanding and evaluating organizational culture can result in Enron-type mutations that fail to sanction behavior considered repugnant or unethical in the larger culture. In today's turbulent environment, the ability to change and adapt quickly is critical to survival. Positive organizational results come from timely and appropriate actions and those actions are regulated by the culture. It's time to stop ignoring the elephant and start talking about culture.

Why should we be concerned with our organizational culture?

Organizational culture poses an obstacle to change if the required adaptation is outside the boundaries allowed by the culture. In addition, cultural boundaries will be fuzzier and narrower in organizations where values and culture are rarely discussed. Even perceived cultural boundaries will take precedence over any change initiative. Failure to resolve the conflict between what's really acceptable to the culture and what's needed for the change will result in a failed change. It is essential that we understand the impact of organizational culture and unearth the underlying organizational values. We need a clear understanding of the link between values and behaviors as well as a better understanding of how to attribute meaning to the behaviors we observe.

Culture surrounds us and exerts forces that can either restrain or drive our actions. Like a dog inside an invisible electric fence, most of us after a few unpleasant experiences get the idea and stay back. The ubiquitous gravity-like presence of the force of culture provides imperceptible signals that over time become embedded in the underlying framework of our thinking. Simply put, our worldviews are dramatically affected by our own particular culture. Cultural differences are often most clearly seen across racial, religious, and national boundaries. Within a culture the subject is a bit fuzzier; each sub-culture usually contains many of the same values as the larger culture, but those values may be emphasized or interpreted differently. There appears to be a bandwidth of acceptable difference in and prioritization of values beyond which a culture may be described as fanatical.

Culture and behavior

A culture can be defined by examining the behaviors of its membership. The physical product of behavior and the behaviors themselves tell a story. We often study cultures by analyzing the culture's art, architecture, literature, and laws. Implied in these physical manifestations of culture are an underlying set and priority of values. Observing how members of the culture behave reveals patterns of commonality in how the culture views the world through its values. In a sense, behaviors and their products identify a broader mental framework based on what the culture holds in high esteem and how it interprets the world. For example, how a culture views and values time will result in dramatically different judgments regarding an individual's tardiness, the meaning of that tardiness, and whether sanctions will be imposed. Values, culture, and behavior are intimately connected.

A culture's understanding of how values are demonstrated by behavior evolves over time. Some cultural values are well documented and easily determined by observation. One of the most famous examples was the rigid dress code imposed by IBM on its employees. While creating a strong corporate image, the company also telegraphed the priority of the value of organizational compliance over individuality. Over time, a culture of compliance inadvertently suppressed "out-of-the-box" creative thinking. Conformance to a visible external dress code, however, is much easier to decipher than more subjective and difficult-to-measure values such as teamwork, customer focus, loyalty, sense of urgency, open-mindedness, and respect.

Our own personal experience and history can complicate our attribution of meaning to the behaviors we observe. Misinterpretation is likely since our own background and experience may not be representative of the larger group. Appropriate connections between values and behavior can go horribly awry. This is made disturbingly clear when an abusive parent beats his children because he wants them to be good kids and not turn out like him. In this instance, good intentions are repulsively manifested by a disconnection with society's values/behavior equation. Within groups, normalizing the connection between a specific value and a given behavior happens empirically. Group norms are established by the way the centers of power respond to the behavior and how the balance of the group reacts to their leadership's response. Cultures can become perturbed when this norming process is short-circuited and not allowed to achieve equilibrium. This occurs when those in power misattribute meaning to behaviors and feedback from the balance of the group is consciously or unconsciously suppressed. Dictatorships are an excellent example of this phenomenon – especially when conflicting feedback is eliminated by coercion.

The hierarchical structure of organizations creates a propensity for unbalanced communication and the possibility of mixed signals. Top-down communications in most organizations overpower other forms. This structural property. coupled with a fear of opening the Pandora's box of organizational culture, can subvert implementation of the cultural adaptations needed for survival. During change the behaviors needed and wanted may be inadvertently discouraged if the existing culture does not support them. Sometimes the interpretation of a value has to be changed or the priority of that value repositioned with respect to other values. The quality movement in the late 1970s is an excellent example of both a change in priority of values and a redefinition of what behaviors are connected with those values. Exhibiting quality was clearly defined as "meeting customer requirements". This widespread definition provided a new "norm" and direct insight into how to behave and identify appropriate behaviors. Ford's motto of "Quality is Job #1" went further and attempted to identify the priority of the value of quality in their organization. Of course, saying what the priority is doesn't make it so. Changing the culture's response to behaviors in line with or in opposition to the new value or priority is what determines whether things will really change.

Behaviors - Attitude - Culture - Values

The best way to understand what cultural drivers are needed in a given change begins with a zero-based definition of the new behaviors needed to achieve the desired outcome. It is also important to understand how we will recognize and evaluate the appropriate behaviors when they occur. Once the behaviors are clearly defined, we can reverse-engineer the process from behavior (effect) to cultural value (cause). Continue to work backwards until you can identify all of the needed cultural drivers. People behave in a particular way based on their attitude. Attitude is our internal response to historical and cultural signals. Knowing what attitude will motivate the desired behavior gives insight into the cultural drivers that will support and encourage that behavior. Once the needed cultural drivers are known, compare them with the existing cultural values and their interpretation. If a new value, a different priority, or reinterpretation of a value is required, develop a plan to ensure that the new cultural condition is understood by the organization at large. Also investigate the current structure to ensure that conflicting signals from the old way are consciously attenuated. Only through this type of understanding and re-alignment of your organizational culture will you be able to effectively and quickly implement change.

Cultural misalignment is the primary reason for failure during implementation of organizational change. Cultural boundary-keeping signals must be adjusted to allow accurate interpretation and stimulation of the behaviors needed for a new value or priority of values to take hold Change implementation problems will persist in organizations until we understand the impact of culture on change outcomes. Our organizational survival depends on the ability to quickly adapt and change our behavior. Those who publicly acknowledge the elephant in the boardroom and undertake its training will be the most likely to change and succeed.

Culture vs. Process

A company in the commercial printing industry asked us to help improve their business processes. The Sales department was particularly upset and outspoken about the Estimating department's three-day turnaround time for quotes. They were convinced that they were losing business to faster-quoting companies.

When we put the estimating process under the microscope we found that 80% of the requests for quotation could be completed in 45 minutes if all the information was available on the standard quote form. Even the most difficult quotes took no longer than 24 hours. Before long it was clear that the major cause of the problem fell squarely on the shoulders of those who were complaining the loudest. The quote form was completed by the sales force with the customer and was usually submitted to Estimating incomplete. The estimators were constantly trying to reach sales personnel to ask questions regarding the missing or incomplete information on the form. Since the sales force was usually in face-to-face meetings with other clients, multiple phone calls were often required. Even worse, the sales representative frequently had to contact the customer for clarification, increasing the delay and escalating tension between Sales and Estimating.

Company management was amazed when we informed them of our findings. They quickly assigned a cross-functional team of sales representatives and estimators to work with us to fix the problem. The team was chartered to simplify the quote form and develop a training plan for the sales force. The form was made more user-friendly and the training was completed successfully. Unfortunately, little or no improvement resulted. The Sales Manager continued to badger the sales force about completing the form with little effect.

It wasn't until we discovered that sales representatives were rewarded for the number of monthly sales calls that it became clear why no one wanted to spend the time to properly complete the form. Even though the message to the sales representatives regarding the importance of completing the form was clear, the priority dictated and rewarded by the established culture was in direct conflict with the behaviors needed to implement the change.