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Organizational Culture

Define, Analyze, & Change

What precisely is organizational culture?

If you have difficulty answering this question you are not alone. Ask any group of business professionals to define the elements of organizational culture and you will get a list — a long list. Ask them to explain the relationship between those elements and you will get a discussion, a long discussion. This is why most companies can describe their culture, but cannot define, analyze and change it in a meaningful way.

The theoretical basis for our work on culture comes from Dr. Robert Hardy's book The Self-Defeating Organization. In this book Hardy applies his model of Self-Defeating Behaviors to organizations to understand how cultures are formed, how they change, and why they become self-defeating at times. Hardy's work provides the conceptual framework and tools needed to define, analyze and changing organizational culture.

Defining Organizational Culture

Use our experience, expertise and objectivity to accurately and efficiently define the elements of your organization's culture.

There are five elements that combine to form an organization's culture. Articulating each of these elements for your company will define your organization's culture.

1. Core Beliefs

These are the foundation of all organizational cultures. They are a set of beliefs about what makes the organization successful and unsuccessful. They are developed over time and through experience. Eventually they combine to form the organization's “success formula.”

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For example, an organization may notice than whenever someone takes personal responsibility for a new product it tends to succeed. When a new product lacks this ownership it tends to fade away. Therefore the organization may develop a core belief that a new product must have a product champion to succeed. Product Champion now becomes part of the company's formula for success.

2. Values

Core beliefs have strong positive and negative emotions associate with them. The positive emotions are expressed as values. Every core belief holds a promise of success that is transformed into a set of values. “We value the tenacity and risk taking that individual champions bring to the organization!”

3. Fears

Every core belief also has an associated fear of what will happen if the organization ignores the belief; “Without champions the bureaucracy will micro-manage and kill new products!” Therefore any product that does not have a champion is doomed to failure.

4. Normative Behaviors

Values and fears form the boundaries of normative behaviors — also known as “how we do things around here!” Product champions, for example, routinely ignore management, exaggerate the positive, and work outside of their areas of responsibility to get things done. The Champion may be an expert in one area, but they behave as a generalist, doing what ever it takes to get the product developed.

5. Infrastructure

Normative behaviors become institutionalized in the organization's infrastructure. Infrastructure establishes roles, rules and structure to support the Core Beliefs. Accountability is achieved by developing a system of rewards and punishments — the things the culture values are rewarded and the things it fears are punished. Now the organization's Core Beliefs are locked into the “way we do things around here.”

Analyzing Low Performing Cultures

Use our experience, expertise and objectivity to accurately and efficiently analyze patterns of low performance driven by your organization's culture.

The values and fears created by organizational culture create the boundaries of acceptable behaviors. When attempting to change things Management tends to focus on the positive “value” of the change — e.g., “Using teams for product development will reduce our cycle time!”

People, on the other hand, tend to focus on their fears when reacting to management programs — e.g., “Now the team will take credit for my ideas!” In organizations that measure and reward people for the number of ideas they generate, teams will be counter-culture. From the employees perspective the perceived value of the team is out weighed by the real punishment they will experience for being a team player. When people do good things (teams), but have bad things happen to them (lose credit) they become resistant to change.

Hardy's Low Performance Loop Analysis accesses individual and group fears to provide a quick and direct way to identify cultural roadblocks that are creating a resistance to change and result in self-defeating behaviors that minimize performance.

Fears

Behaviors and activities that are not consistent with the organization's core beliefs create a great amount of fear and discomfort. For example, a product inventor in an organization that promotes people based on the number of ideas they come up with may fear working in a team setting because he or she will lose credit for their ideas.

Techniques

Individuals develop techniques for dealing with their fears. Some of those techniques are positive, but most are developed to provide protection. For example, the product developer decides to not share ideas with the team and not participate in team meetings in order to protect his or her ideas.

Results

Techniques are developed for protection and generally deliver negative results in terms of performance. The product developer is seen as untrustworthy and a non-team player and becomes isolated from the team. As a result the team will likely experience a delay in cycle time and may even self-destruct.

Minimize/Disown

Caught between their fears and poor results individuals will search for ways to minimize the poor results (Teams are not easy, every company struggles with them!) and blame someone else (It's the team leaders fault for running such poor meetings!) The conflict and finger pointing this creates wastes critical resources and poisons the culture with political battles over assessing blame.

The Low Performance Loop is an extremely powerful tool. Tracing the fears back to the organization's Core Beliefs tells you exactly which part of your culture is creating the resistance. This forces the organization to address whether or not this core belief is still accurate. If it is decided the Core Belief is still accurate, than the organization will have to accept limited performance in this area — just like people, organizations cannot be all things to all customers, all the time. If the Core Belief is not longer accurate, than the organization will have to establish a more accurate Core Belief and align its values, fears, behaviors and infrastructure to support the new Core Belief.

Changing Organizational Culture

Culture change can only be achieved by changing the organization's Core Beliefs. Values, fears, behaviors and infrastructure all flow from the organization's Core Beliefs. Therefore, attempts at changing culture by changing these elements are doomed to failure until the Core Beliefs are changed.

Developing a new Core Belief requires management to change its success formula. This requires talented management who understands their external market and can translate that understanding into action. Our role in this process is to facilitate collaboration among top management to assure they come to the best conclusions.

Integrated Performance Strategies

Once a new Core Belief has been identified we help implement it into the organization's infrastructure. Using our Integrated Performance Strategy we develop the ability, willingness and opportunity to achieve high performance on this new element of the success formula.

  • We change the organization's infrastructure to create the opportunity for people to perform.
  • We provide training on the new behaviors to develop the ability to perform.
  • We maximize participation in the change process to create the willingness to perform.

When the ability and willingness to perform are met with the opportunity to perform, maximize change and performance is delivered.

Stages of Organizational Development

Organizations go through predictable Phases of development. The role of culture and infrastructure varies greatly at each Phase. Therefore we approach defining, analyzing and changing culture based on our client's current Phase of development.

Phase 1 — Management by Activity

In Phase 1 the organization is entrepreneurial and still trying to identify its value discipline and Core Beliefs. Culture development in this stage is focused on learning from experience to develop the organization's Core Beliefs.

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Without clear values, fears, normative behaviors and infrastructure the organization often takes on the personality and style of the founder or CEO. This can politicize culture development by forcing people into two camps — those who support the CEO and those who do not. The whole process shuts down if disagreeing with the CEO is seen as a career-limiting experience.

Phase 2 — Management by Objectives

The organization enters Phase 2 when it has identified its value discipline and its Core Beliefs. Culture development at this effort focuses on values clarification and infrastructure development. The organization is in a building mode as it strives to replicate these elements across all organizational units. Learning is limited and activity is driven by specific objectives.

Phase 2 — Management by Bureaucracy

The organization enters Phase 3 when it goes on autopilot. Everything remains fine until the outside world begins to change. Focused on its past successes the organization is highly resistant to change. Like the proverbial maker of buggy whips, the organization's core beliefs are no longer accurate for the times. But with deep pockets and lots of staying power the organization clings to its past success and begins to re-organize, re-trench, re-structure, re-staff and re-train — all providing the illusion of control.

Culture Change in Phase 3 is extremely difficult because the organization believes it just has to try harder. Driving change requires the organization to re-define itself based on the realities of the external world. Culture change therefore must be driven from the top, but implemented from the bottom. The top down provides strategic direction and the accountability to force change. The bottom up provides the information and analysis to do the “right things.”

Consulting Services

Defining, analyzing and changing cultures cannot be done by outside experts. But changing culture from within is difficult because internal resources often lack objectivity and can be unduly influenced by internal politics and careers.

Our clients value our consulting services because we are objective and honest, brutally honest when needed. They tap into our knowledge, skills and tools to efficiently and effectively define, analyze and change their organizational culture. Our change efforts use highly collaborative processes that create ownership and commitment to through participation. When working with clients we establish the following norms to create a robust change process:

Truth Telling

  • Providing accurate and complete information.
  • Honest and tactful sharing of opinions, conclusions and learning.
  • Avoiding distortion or deletion of information to support a position or request.

Openness

  • Considering a wide range of alternatives when making decisions, solving problems and developing plans.
  • Developing a broad base of criteria for analyzing alternatives.
  • Avoiding developing selective criteria to justify a pre-conceived conclusion.
  • Willingness to think outside a different box.
  • Willing to take calculated risks when justified by the potential results.
  • Avoiding “groupthink.”

Cost-Benefit Sharing

  • Ensuring that individuals who do the right thing for the business do not have bad things happen to them in their job.
  • Recognizing and protecting those who must absorb the costs for doing the right thing.
  • Creating a win-win situation in all conflicts.
  • Ensuring one group does not consistently benefit at the expense of another group.

Maximizing Results

  • Avoiding the “not invented here” attitude.
  • Incorporate the work of others to avoid re-inventing the wheel.
  • If it works for you, actively looking for others in the same situation that can benefit from your work.
  • Creating strong networks among peers so everyone is “in the know.”

Ownership

  • Celebrate and share learning from your successes.
  • Take ownership for and share learning from your failures.
  • Make every financial decision like you were spending your own money.
  • Take responsibility for performance wherever you can influence it.
  • Bring a business perspective to all your actions.
  • Make every decision as if your job depended on it.

By institutionalizing these norms you can drive continuous improvement in your organization's culture, creating a more agile and responsive organization that adjusts to learning and changing circumstances.