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UNDERSTANDING AND ASSESSING By Julie Heifetz, Ph.D. Understanding and assessing your organization's culture can mean the difference between success and failure in today's fast changing business environment. Companies today are merging and acquiring each other in unprecedented numbers. While it's a sad fact that one out of two marriages end in divorce, corporate couplings fare even worse. A Mercer Consulting study found that of 340 mergers that occurred during the past decade, 57% of acquiring companies performed below industry averages in the three years following the acquisition. A leading cause of failure of many mergers and acquisitions is not the lack of common strategic objectives, but rather a failure to look beyond the bottom line and address potential conflicts that result from differences in the cultures of the two merging organizations. An assessment of organizational values, norms, and practices at the outset can be critical to successfully weaving the human side of organizations together quickly and successfully. Just as two individuals must get to know one another's style, values, and behavior, the same is true for organizations. Thus, many companies find it pays off in the end to include cultural assessment as part of the due diligence process when undergoing organizational matches. Do You Know Your Organization's Culture? Imagine you were asked to describe your organization to an outsider. How would you answer the following questions?
What management pays attention to is a key to discovering the cultural values. Is your company one that encourages innovation and risk taking? Does management reward employees for coming up with new ideas and challenging old ways of doing things? Do mavericks fit in or do they get pushed out? Is rapid change the norm or is the status quo vigorously protected? Does the organization truly value excellence or is the mentality simply "just ship it"? Does management pay attention to the well-being of its employees or is it completely focused on task performance and profits? Does a high level of employee participation characterize the culture or does senior management make most decisions? Responses to this kind of inquiry can give insight into the culture of your organization and some of its underlying values, and norms. What Is Culture?
What you say you value may in reality be very different from what is really important in the organization. Your organization's culture is not the espoused list of values developed at an offsite by the executive team and framed on the wall in your lobby. These are ideals. What you strive to be as an organization and what values you hope to endorse, may be different from the values, beliefs, and norms expressed in your actual practices and behavior. Don't fool yourself. It is critical that you find out who you really are as well as striving for who you want to be. Awakening the emperor to the fact that he has no clothes is often a risky and delicate first step in closing the gap between the real and the ideal. Cultural assessment can provide measurable data about the real organizational values and norms that can be used to get management's attention. It can dispel some of management's illusions about what really matters in the organization and will tell them how far off the mark things really are. Management may find that it is not practicing what it preaches. Basic Assumptions, Values And Norms Drive Practices And Behaviors
The culture of an organization operates at both a conscious and unconscious level. Often the people who see your culture more clearly are those from the outside--the new hires, the consultants or vendors. Remember, culture comprises the deeply rooted but often unconscious beliefs, values and norms shared by the members of the organization. Those not living inside the culture can often see it more objectively. Better to ask a New Yorker to tell you what Californians are like than ask a Californian. Culture drives the organization and its actions. It is somewhat like "the operating system" of the organization. It guides how employees think, act and feel. It is dynamic and fluid, and it is never static. A culture may be effective at one time, under a given set of circumstances and ineffective at another time. There is no generically good culture. There are however, generic patterns of health and pathology. Culture Operates At Various Levels - The Visible Artifacts To The Deeply Rooted And Unconscious Culture can be viewed at several levels. Some aspects of culture are visible and tangible and others are intangible and unconscious. Basic assumptions that guide the organization are deeply rooted and often taken for granted. Espoused or secondary values are at a more conscious level; these are the values that people in the organization discuss, promote and try to live by.
Some of the most visible expressions of the culture are called artifacts. These include the architecture and decor, the clothing people wear, the organizational processes and structures, and the rituals, symbols and celebrations. Other concrete manifestation of culture are found in commonly used language and jargon, logos, brochures, company slogans, as well as status symbols such as cars, window offices, titles, and of course value statements and priorities. The Role Of The Leader In Transmitting Culture One of the critical factors in understanding a corporate culture is the degree to which it is leader-centric. In other words, ask yourself, how central is our leader to the culture? If you are the leader yourself, the culture of your company is likely to reflect your personality, including your neurosis. So if you avoid conflict and tend to sweep it under the carpet, don't be surprised if you see avoidance of conflict played out in the organization. The behavior that is modeled by the leader and the management team profoundly shapes the culture and practices of the organization. What you emphasize, reward and punish, your behavior, your reactions and what you talk about, all set the tone of the culture. If the culture is already firmly established when you assumed leadership and you have simply inherited a strong set of traditions, then you may play the role of the guardian of the culture. On the other hand, like Lou Gerstner at IBM, you may have been brought in as a change agent charged with dramatically transforming the organizational culture. Why Assess Culture? Beyond understanding the integration of cultures in a merger situation, why would a company be interested in assessing its culture? If Company X wants to maximize its ability to attain its strategic objectives, it must understand if the prevailing culture supports and drives the actions necessary to achieve its strategic goals. Cultural assessment can enable a company to analyze the gap between the current and desired culture. Developing a picture of the ideal and then taking a realistic look at the gaps is vital information that can be used to design interventions to close the gaps and bring specific elements of culture into line. If your competitive environment is changing fast, your organizational culture may also need to change. However, you may only need to change some of its practices and secondary values while keeping a few precious and non-negotiable core values intact. Value And Goal Alignment Across Subcultures, Divisions And Geographic Regions In many companies there is a strong dominant culture that is pervasive throughout the organization and across business units or even regions. This kind of organization is said to possess a high level of cultural integration. However, often the culture in large organizations is not singular or uniform. Organizations can vary widely in terms of the degree of cultural integration and the strength of the subcultures that coexist. Subcultures may share certain characteristics, norms, values and beliefs or be totally different. These subcultures can function cooperatively or be in conflict with each other. In general, subcultures can differ by function, (engineering vs. marketing), by their place in the hierarchy, (management vs. administrators, assistants) by division, by site, or by geographic region and country. It may be both undesirable and unrealistic to try to homogenize the organization across all of its parts. Still, a thoughtful assessment of the culture can facilitate the alignment of values and strategic goals across subcultures and geographic areas. It is very important for global companies to tolerate and support a certain amount of cultural differentiation. Yet there may be a core of values, a subset of four or five deeply held principles, that management thinks should cut across subcultures, divisions, and international settings.
Individual-Organization Fit Corporations that are growing fast must hire a large number of new employees. It is critical that these new hires are a good fit with the current culture. If an individual is out of synch with the culture, the organization's cultural antibodies will often attack. However, there must also be a good fit with the culture that you are trying to create. It is now possible to make hiring decisions based on quantitative assessment of the compatibility between the candidate's personality, values and behaviors and both the current and desired culture. Organizational Change Today the pace of change is so rapid, particularly in the high tech industries. Only organizations that can adapt to this fast changing environment can survive. However, as Built to Last, by Jim Collins and Jerry Porris has demonstrated, enduring great companies are usually built on both a solid foundation of timeless core values, but also on the adaptability of their behavioral practices, secondary values, structures and other cultural artifacts. The secret to a company that will last is its ability to manage both continuity and change. Such companies are capable of responding with nimbleness to the environmental drivers that necessitate change in strategy and practices. These drivers include: rapid technological change, changes in industries and markets, deregulation, aggressive competition, the global economy, increased organizational complexity, new business models. Getting a profile of the current culture can enable organizations to thoughtfully bring the elements of the culture into alignment and move forward towards an ideal. Now with the development of the Cultural Assessment Tool, the CAT, it is possible for an organization to objectively and quantitatively identify and assess its culture and to demonstrate to senior management what the values and culture of the organization truly are not what management thinks or says they are. Organizations develop cultures whether they try to or not. Whether your intention is to appraise individual-organization fit, to aligning culture and strategic goals across subcultures and geographic regions, to take wise actions regarding mergers and acquisitions, or make organizational changes in practices or values, understanding your culture in an objective manner can give you a business advantage and spare you enormous time and money. Not understanding your culture in today's business world can be fatal. |
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