Culture shock

All this week, The Telegraph has been running its Summer Business School; a series of articles on business and management. Like many of these newspaper pieces, they have sat on my desk waiting to be read and I have only just got around to looking at them.

The set of articles on organisational culture is interesting. I wrote my master’s degree thesis on culture so I can bore for England about it – and I often have. As the Economist’s Tim Hindle tells us, cultural issues are a major obstacle to the integration of businesses after a merger. How often have we heard that? Whenever mergers fail, ‘cultural incompatibility’ is usually cited as the reason. This KPMG survey found that cultural issues were cited as the biggest obstacle to post deal integration 

Strange, then, that culture is rarely, if ever, looked at as part of the due diligence process. The KPMG study also found, unsurprisingly, that dealing with these issues at the beginning of the process means that the benefits of a merger will be realised more quickly. My own experience bears this out. Rather than hoping that the cultural issues will just sort themselves out, as many companies do, getting them out in the open and dealing with them saves time in the long run. Just taking the temperature of each organisation and expressing the cultural similarities and differences between them can help. Get people from both organisations to understand each others styles, rather than demonise them as wrong, and you’ll get off to a better start.

But trying to manage and change organisational culture is not easy, which is why I found this piece from Robert Heller slightly irritating. He advocates four steps to changing an organisation:

• Flatten the hierarchy
• Empower the workers
• Get close to customers
• Train, train, train

That last bit is really irritating. Why do people think that repeating something three times makes a suggestion more powerful? I remember a colleague of mine once put “sell, sell, sell” at the end of a presentation. The truth was that none of us were really sure how to market and sell a set of new offerings. Using gung-ho language wasn’t gong to make it any clearer.

Flattening the hierarchy and empowering the workers doesn’t always do it either. All too often, it is an excuse for senior managers to opt out of the process. “Look, I’ve empowered the buggers and they’re still not performing. I told you they were all crap.” Later in the article comes this comment: 

It should go without saying that the leader’s personal behaviour must be consistent with these new attitudes.

But that’s the problem, Richard, it doesn’t go without saying. I have sat in many a management meeting where the problem of how to get “them” to change was discussed. The idea that the behavioural change needs to start with the leaders themselves is lost on many of them. Ask the question, “How has our behaviour brought about the current mess that we are in?” – or a similar question to that effect – and you will usually be met with blank stares.

The side-bar to this article suggests reading Edgar Schein’s Corporate Culture Survival Guide. I would also recommend his more in-depth Organisational Culture and Leadership. Schein is, IMHO, one of the best writers on culture. His two main points are that culture is based on subconscious shared assumptions, so changing it is more difficult than you think, and that leadership is the key to managing culture.

Everyone, he argues, from the CEO to the shop-floor is likely to share a culture’s core assumptions to an extent and will be largely unaware of them until they are pointed out by someone outside the company. Schein also points out that leaders embed culture by what they do and the behaviour that they reward in others, rather than what they espouse. To change the organisations’ cultural assumptions, then, leaders need to change their own assumptions before they change those of other people.

This will be a painful process and many leaders are just not up to it which is why so many culture change programmes fail. A friend once told me about a CEO who had spent the best part of two years trying to flatten the hierarchy, reduce status differences and empower all his staff. One afternoon, he was sitting in his big office looking out at people across the corridor working in the open plan area when the penny finally dropped. He picked up his laptop, wrote “Meeting Room” on a Post-It and stuck it to the door of his office, then went and sat down with everyone else in the open plan area. The effect was instantaneous. Word went around the company – “Shit! He really means this stuff.”

You can tub-thump about empowerment, and reducing bureaucracy and the trappings of status in the interests of creating a more responsive organisation, but if you are not prepared to make changes and sacrifices yourself, then don’t bother. Your workers are not stupid. They will look at what you do rather than what you say and they’ll soon work out whether you mean it or not.  

Culture change should not be embarked upon lightly. It can be a long hard process and it requires leaders who are prepared to set an example. That’s why most organisations file it in the put-off-until-another-time box.