Scenario planning: how to navigate multiple crises
Scenario planning is more valuable than ever – but what is it and how can executives implement it effectively? Peter Schwartz, author of the highly influential book The Art of the Long...
Audio articles
10 attributes of culture that make it so difficult to change – especially when workers aren’t in the office
Published 18 November 2021 in Audio articles • 7 min read • 
Audio available
Understanding your company’s culture is essential to design a strategy and structure that will enable your employees to perform at their best, says Professor Michael Watkins.
While there is universal agreement that organizational culture plays a crucial role in how organizations perform, there is little consensus on what it is, never mind how it influences behavior and, crucially, how leaders can change it.
This is a problem because, without a clear understanding of cultures, we cannot hope to develop good approaches to analyzing, preserving and transforming them. If we can define what organizational culture is, we will better understand how to diagnose cultural issues and develop better cultures.
The challenge is increasingly pressing. With the rise of new technologies disrupting sectors and businesses, companies have to adapt their cultures to become more flexible and curious.
The COVID crisis has further complicated the task of changing culture. Organizations have grappled with how to instill and maintain company culture when employees are working remotely. A clear understanding of culture will help managers onboard new joiners and sustain cultures in hybrid working environments.
Now, as companies start to bring workers back to the office, it will be essential to consider the divergent views of employees. While some workers might be reluctant to return to the rigidity of regular office days, others, particularly new joiners, are craving the chance to finally meet and bond with colleagues. The head of learning and development at a global sporting and equipment company, who onboarded during the pandemic, recently told me, “I’m suffering from culture deprivation.” She was happy to conform to the firm’s Tuesday to Thursday in the office policy. But at the same time, she worried about losing talented long-timers who were reluctant to give up the flexibility they gained by working from home.
Finally, with rising workplace stress and a growing focus on how organizations protect their employees’ mental health, having a strong culture is vital to attract and retain staff.
Here are some ways to think about organizational culture and the implications for changing it:
A clear understanding of culture will help managers onboard new joiners and sustain cultures in hybrid working environments.
1. Culture is‘how we do things here‘
Culture gives rise to consistent, observable patterns of behavior in organizations. This view highlights that behavioral patterns or “habits” are central to culture; it’s not just what people feel, think, or believe. This view also focuses attention on the forces that shape behavior in organizations and their critical importance in making culture change happen.
Implication: It’s not enough to focus just on changing values and attitudes – if behaviors don’t change, culture doesn’t change.
2. Culture acts as a control system – for better and worse
Culture promotes and reinforces ‘right’ thinking and behaving and sanctions ‘wrong’ thinking and behaving. Key in this view of culture is the idea of behavioral ‘norms’ that must be upheld and associated social sanctions imposed on those who don’t ‘stay within the lines.’ This view also focuses attention on how the evolution of the organization shaped the culture. That is, how have existing norms and values promoted the survival of the organization in the past? Critically, what happens when the organizational environment shifts dramatically due, for example, to technological developments, the rapid emergence of new competitors, or a global pandemic that closes offices and forces a mass shift to remote working?
Implication: Established cultures can become impediments to survival when organizations face substantial environmental changes.
3. Culture is powerfully shaped by incentives
The best predictor of what people will do in organizations is what they are incentivized to do. By incentives, we mean here the complete set of incentives — not just monetary rewards, but also non-monetary rewards such as how people get status, recognition and advancement — to which members of the organization are subject. So to understand an organization’s culture, it helps to focus on incentives and the behaviors they encourage and discourage.
Implication: Changes in incentives can powerfully influence behaviors and hence, over time, reshape culture.
4. Culture helps people ‘make sense’ of what is going on
Sense-making is defined as “a collaborative process of creating shared identity and understanding of different individuals’ perspectives and varied interests.” Culture is more than just patterns of behavior; it’s also jointly-held beliefs and interpretations about ‘what is’ A crucial purpose of culture is to help orient its members to “reality” in ways that provide a basis for alignment of shared purpose and joint action.
Implication: The right changes in culture can better help people ‘make sense’ of emerging challenges and opportunities and so adapt more quickly.
5. Culture is an essential source of shared identity
Culture provides not only a shared view of ’what is’ but also of ‘why it is.’ Culture is about ‘the story’ of the organization and the values that reinforce the narrative. This view focuses attention on the importance of organizational values and the benefits of having people feel connected to and inspired by them. It also highlights the danger that attempts to change values can result in a loss of a sense of shared identity and connection to the organization.
Implication: Leaders considering developing a new set of values should weigh the benefits of having ‘better’ values against the potential costs of people experiencing a loss of connection to the past and diminution of the loyalty and engagement that flows from it.
6. Culture is the organizational equivalent of the human immune system
Culture is a form of protection that has contributed to organizational survival. It prevents ‘wrong thinking’ and ‘wrong people’ from entering the organization in the first place. It says that organizational culture functions much like the human immune system in preventing viruses and bacteria from taking hold and damaging the body.
Implication: Organizational immune systems can also attack needed agents of change. This has important consequences for what needs to happen to successfully onboard and integrate people who are ‘different’ into organizations.
7. Organizational culture is shaped by societal culture
Organizational culture is shaped by and overlaps with other cultures — especially the broader culture of the societies in which it originated and operates. This view highlights the challenges that regional and global organizations face in establishing and maintaining a unified culture when operating in the context of multiple national, regional and local cultures.
Implication: Leaders must strike the right balance between promoting ‘one culture’ in the organization and allowing for influences of local cultures.
8. Organizational culture always is multi-layered
The cultures of organizations are never monolithic. Many factors drive variations in the culture of business functions (e.g., finance vs. marketing) and units (e.g., a fast-moving consumer products division vs. a pharmaceuticals division of a diversified firm). A company’s history of acquisition also shapes its culture and sub-cultures.
Implication: If acquisition and integration are not managed well, the legacy cultures of acquired units can persist for a surprisingly long time. This contributes to a lack of shared identity and challenges for people moving between units.
9. Organizational cultures are dynamic
Cultures shift incrementally and constantly in response to external and internal changes. So, assessing organizational culture is complicated by the reality that you are trying to hit a moving target. But it also opens the possibility that culture change can be managed as a continuous process rather than through substantial shifts (often in response to crises). Likewise, it highlights the idea that a stable ‘destination’ may never — indeed should never — be reached.
Implication: Organizational cultures should continually evolve and develop to meet emerging challenges; it’s far better to incrementally shape cultures than to have to drive dramatic shifts.
10. Culture is resilient
Finally, for precisely the reasons cultures can be so powerful, they are difficult to change.
Implication: Changing a culture takes committed leadership, often requiring years of concerted and consistent effort, including intensive work to communicate and reinforce desired new behaviors and values.
These 10 perspectives provide a holistic, nuanced view of organizational culture that should help leaders improve their understanding of their organizations — and change them for the better.
Authors
Related
Eight ways for an outsider to successfully get on board
Søren Toft, CEO of MSC Mediterranean Shipping Company, makes the case for respecting the legacy of a family-owned business when taking the helm....
How to be diplomatic in the age of Twitter
The diversification of actors and a widening of issues challenges the traditional model of diplomacy. A convergence of skills is needed from the public and private sectors to facilitate engagement between states,...
Audio available
Conflict is not inevitable, but ask yourself: what if?
Stakeholder capitalism has forced CEOs into taking political positions, even on controversial topics. Tensions over Taiwan make it critical for companies to plan ahead for the next values-driven conflict. ...
- Audio available
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.