While most people believe they understand what culture means, few can define it. Even business managers may fumble when asked to describe it—triggering heated debates. This lack of clarity, combined with overconfidence, can turn organizational culture into a cult.
What is organizational culture?
Michael Watkins (2013) reported 300 responses to an online debate on LinkedIn.com about what managers believed organizational culture to be. Definitions ranged from organizational procedures, to values and rituals that glue members together, to a civilization or an immune system. None of these definitions are wrong, but culture is much more than these; indeed, confining organizational culture to a simplified definition can be a costly mistake. It is also an oversimplification to say that an organization has a single culture. In almost all cases, there exist multiple cultures—living and evolving as values, members, and organizational practices change, and vying for dominance.
Attempts to precisely define organizational culture are ultimately of little value. We must remain aware of cultural indicators, especially those that are toxic, yeah even cult-like, so that we can create change to make the culture what we want it to be; which begs the question, “what do we want the culture of our organization to be?”
Who determines an organization’s culture?
The debate in culture is not confined to its definition alone. A survey of 1800 American managers showed that the determiners of culture are fiercely contested too. Thirty-three percent of surveyed HR managers surveyed believed they were responsible for setting the organizational culture—but only ten percent of managers and three percent of employees concurred. Twenty-six percent of managers believe that culture was defined by the executive team. Twenty-nine percent of employees believed that it was, in fact, they who defined the culture. Then again, the twenty-eight percent of employees who said that no one particular subset of employees defines culture may be closest to reality.
The truth of who determines the organizational culture is probably somewhere between all these answers. Culture cannot be determined by the leaders alone, although it is their established policies, practices, and strategies that create the rituals, stories, and values that hold the entire organization together. It cannot be determined by HR professionals alone, although HR policies determine the employees’ motivation, engagement, and performance to a large extent. It can also not be based on the supervision of the managers alone, as each manager’s style is different and is largely guided by the organizational strategy and policy. Therefore, it is the entire gamut of organizational members who, along with environmental factors, determine the prevailing organizational culture.
Culture is a living and evolving concept that changes with the members and the environment. The story of an organization may begin with how the founder, or founders, established it, what values they espoused, and how they managed growth. Indeed, the dynamism, charisma, impetuousness, and even the fractiousness of a founder can create a cult-like culture.
Amazon has a famously high-pressure culture that is based on competitiveness, plus an obsessive and ongoing measurement of employees and treating people as cogs in one massive, churning retail machine. Employees are levelled and essentially have a rank. Aggressive managers use the threat of Performance Improvement Plans (PIPs) instead of sound coaching techniques to spur performance. Many in the culture feel that the way to get ahead is to remodel themselves in the image of the founder.
Steven Hassan is a mental health counsellor who has written extensively on the subject of cults. He developed a model to determine whether or not a group is practicing destructive mind control which is the cornerstone of a cult.4 He cites a number of mechanisms used to control people. In his model the control mechanisms fall into one of four categories.
While it would be incorrect to imply that any business would attempt to manage employees following the model set out by Hassan, it is altogether believable that even watered-down versions might be inadvertently employed and thereby create a toxic culture bordering on cult.
How is culture created?
Knowing how a culture comes into being is the key to modification. All employees in all companies have experiences during their tenure. Those experiences can be positive or negative or, most likely, a combination of positive and negative. As experiences recur, beliefs are formed. Over time and with repetition of the experience, the belief gains strength. The belief guides employee actions.
The sum of employee experiences, beliefs and actions is the company’s culture. If you want to change the actions, change the beliefs. If you want to change the beliefs, change the experiences. If you want to change the culture, start with the experiences.
Ultimately what a company wants is results. Results are the natural outcome of employee actions, beliefs and experiences. In other words, culture produces results.
As organizations mature and people join it, the story is often amended through their perceptions. Good stories shared outside contribute to a positive branding while scary anecdotes can frighten talent away.
Organizational change impacts culture
Organizational change may involve a massive restructuring exercise or may be a series of incremental modifications. Regardless of their nature, organizational change does impact culture. Organizations with flexible work hours will find a change in culture when asked to clock in and out.
Changes need the support of the organizational culture as a facilitating factor. Unless the organization has a culture which is ready for change and is supported by various organizational policies and practices, the change is unlikely to be accepted by the members.
Cultural changes require effective change management strategies and transformational leadership. Unless the leadership creates a vision for the change, energizes members, and leverages facilitating factors while removing the barriers, change is almost unfeasible. At a time when the market requires companies and employees to be able to create and respond to change quickly and effectively, having a change-resistant culture can be the death knell of obsolescence.
Understanding organizational cultures
Considering the difficulties in defining organizational culture, how can we understand them? How can we distinguish between toxic cultures and healthy ones? Several authors’ classifications of organizational cultures make it easier to understand them. Harrison (1972) said that culture could be oriented around power, people, task, or roles, depending on the organization’s ideology. Schein (1985) stated that culture can be based on power, role, achievement, or support. Quinn and Cameron (2016) described cultures based on clan, adhocracy, hierarchy, or market, depending on their focus (internal or external) and control (stability vs flexibility).
It is foolish to assume that any organizational culture can be placed in only one of these classifications, considering that multiple subcultures coexist in each organization while continuing to evolve and change. These classifications may appear overly simplistic, yet they can help in identifying the dominant attributes of a company’s culture.
Toxic cultures stifle organizational growth and employee satisfaction
Toxic cultures carry unmistakable signs of dysfunctionality, such as a lack of communication, an overemphasis on hierarchy and power to push work and justify performance, rules guiding all actions, no response to employee unhappiness, no latitude for employees to demonstrate exceptional performance or incentive to do so, and finally, a lack of employee voice. Other toxic cultures include an overemphasis on performance (where top performers are able to get away with atrocious behaviour including sexual harassment, homophobic comments and threats of violence). The ramifications of such a culture can be felt not only on the company’s performance and legal consequences, but in the lasting scars on the employees’ psyche.
Toxicity is not determined by a single factor, so its remediation can also not be managed by a single change. Top leaders must offer whole-hearted devotion and resolute leadership before any positive change can become visible in the organization. The HR team will also need to make—and unrelentingly enforce—policy changes. For example, a strict disciplinary enquiry can set the record straight and send a message to all managers that high job performance does not excuse behavioural deviances.
Positive cultures help propel organizations to the top of their game
While toxic cultures are associated with high talent turnover, positive cultures not only retain talent, they nurture it. The fabled culture of Netflix turned its fortunes from a DVD-by-mail business to the world’s largest subscription streaming video service. The company created a 124-page document that shared definitions of their values. The main tenets of this culture were that employees did not need to be supervised closely and could be trusted to manage their own leave and expenses. Managers would create their own teams and leaders would take ownership of creating the organizational culture.
There are many things to like in Netflix’s positive culture. It is equally important to know that this culture may not suit each kind of organization. However, such maturity of values can make the task of managers and leaders easier and improve focus while allowing employees to improve their performance.
What kind of company culture do you have?
- Are company policies expected to cover 100% of all situations?
- Are interactions between employees more formal than friendly?
- Are the values the same at all levels in the company?
- Are there “in” people or lists of names of people expected to be the next to depart?
- Are there “us” and “them” groups?
- Can each department articulate how it supports the company’s mission statement?
- Do employees feel that the easiest part of their job is the work on their desks?
- Do employees say nothing if presented with an impossible goal but later use the case to speak badly of superiors?
- Does change always come down from the top or does some change result from the bottom up?
- Does information about employees get selectively disseminated?
- Does information get distorted at times?
- How closely do your HR and marketing departments work together to align product brand and employer brand?
- How does information, both formal and informal, flow between managers and employees?
- How important are job titles, job descriptions and levels in the company hierarchy?
- How is information controlled?
- How would your company deal with a major business setback?
- Is access between employees controlled by policy or process?
- Is information a commodity owned by some and spent in only specific circumstances?
- Is mushroom farming used as an analogy to management style?
- Is the word “politics” used frequently?
- Is there “inside information”?
- Is there a robust grapevine of information?
- Is your company achieving the breadth and depth of what you think it should achieve?
- What behaviors get disciplined?
- What behaviors get rewarded?
- What does your board of directors use to measure the CEO’s performance?
- What five areas received the highest scores on your last employee engagement survey?
- What five areas received the lowest scores on your last employee engagement survey?
- What is there about your company that you would never change?
- What is valued at your company?
- What is your company’s compensation philosophy?
- What is your NPS and which direction is it going?
- What metrics are presented to the executive team on a monthly basis?
If any of the above questions give you pause, make a point to discuss creating a positive culture at your next executive staff meeting and become accountable for your company’s culture.