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The Boston Globe just ran a front-page story in their “Ideas” section on organizational culture, inspired by some depressing events involving the Boston University hockey team. It was much more impactful than the average writing about culture, and raised the important question: Why do conversations about an important topic like culture typically go nowhere, leading companies to waste time and money with “cultural change efforts” which very seldom work? Here is the problem: First, virtually no one clearly defines what they mean by “culture,” and when they do they usually get it wrong. Second, virtually no one has read the original research that shows why culture — when clearly defined — is so important, how it is formed, and how it changes. Definition: Culture consists of group norms of behavior and the underlying shared values that help keep those norms in place. Take your work, for example, a place where almost everyone shows up between 8:55 and 9:05. Why? Not because the CEO has decreed it, or because people are fired if they don’t do it. That’s just the way it is! That is a group norm. Why does it exist? And why doesn’t it go away when Gen X or Y individuals are hired? My guess: People are hired who embrace the value of respecting others, including other people’s time, so they also show up to meetings on time, and anyone who doesn’t gets a glaring look from everyone else. Where does culture come from? It usually comes from the founders of the group. For whatever reason, they value certain things and behave in ways that seem to help the group succeed. Success is key. So it seeps into the group’s DNA. How does culture change? A powerful person at the top, or a large enough group from anywhere in the organization, decides the old ways are not working, figures out a change vision, starts acting differently, and enlists others to act differently. If the new actions produce better results, if the results are communicated and celebrated, and if they are not killed off by the old culture fighting its rear-guard action, new norms will form and new shared values will grow. What does NOT work in changing a culture? Some group decides what the new culture should be. It turns a list of values over to the communications or HR departments with the order that they tell people what the new culture is. They cascade the message down the hierarchy, and little to nothing changes.

Understanding Organizational Culture Would you act the same way at a rock concert as you would while watching a symphony orchestra perform? Although there are no written rules that dictate the acceptable way to act at either type of performance, the concert audience will try to make it very clear to you if your behavior does not conform to what they consider to be appropriate. Would you dress the same way to attend a golf tournament as you would to attend a football game? Although both are sporting events, there are a set of unwritten rules that dictate what is considered to be the acceptable way to dress for each type of event, and the people in attendance will send you signals as to whether or not they think you are dressed appropriately. At concerts, sporting events, and just about everywhere that people get together, group members convey social expectations by how they dress and act. Newcomers to the group are expected to learn what is acceptable to the group by observing the behavior and dress code of the group members and adapting to the situation accordingly. Defining Organizational Culture Organizational culture works a lot like this. Every company has its own unique personality, just like people do. The unique personality of an organization is referred to as its culture. In groups of people who work together, organizational culture is an invisible but powerful force that influences the behavior of the members of that group. So, how do we define organizational culture? Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs. Every organization develops and maintains a unique culture, which provides guidelines and boundaries for the behavior of the members of the organization. Let's explore what elements make up an organization's culture. Organizational culture is composed of seven characteristics that range in priority from high to low. Every organization has a distinct value for each of these characteristics, which, when combined, defines the organization's unique culture. Members of organizations make judgments on the value their organization places on these characteristics, and then adjust their behavior to match this perceived set of values. Let's examine each of these seven characteristics.

Characteristics of Organizational Culture The seven characteristics of organizational culture are: 1. Innovation (Risk Orientation) - Companies with cultures that place a high value on innovation encourage their employees to take risks and innovate in the performance of their jobs. Companies with cultures that place a low value on innovation expect their employees to do their jobs the same way that they have been trained to do them, without looking for ways to improve their performance. 2. Attention to Detail (Precision Orientation) - This characteristic of organizational culture dictates the degree to which employees are expected to be accurate in their work. A culture that places a high value on attention to detail expects their employees to perform their work with precision. A culture that places a low value on this characteristic does not. 3. Emphasis on Outcome (Achievement Orientation) - Companies that focus on results, but not on how the results are achieved, place a high emphasis on this value of organizational culture. A company that instructs its sales force to do whatever it takes to get sales orders has a culture that places a high value on the emphasis on outcome characteristic. 4. Emphasis on People (Fairness Orientation) - Companies that place a high value on this characteristic of organizational culture place a great deal of importance on how their decisions will affect the people in their organizations. For these companies, it is important to treat their employees with respect and dignity. 5. Teamwork (Collaboration Orientation) - Companies that organize work activities around teams instead of individuals place a high value on this characteristic of organizational culture. People who work for these types of companies tend to have a positive relationship with their coworkers and managers. 6. Aggressiveness (Competitive Orientation) - This characteristic of organizational culture dictates whether group members are expected to be assertive or easygoing when dealing with companies they compete with in the marketplace. Companies with an aggressive culture place a high value on competitiveness and outperforming the competition at all costs.

7. Stability (Rule Orientation) - A company whose culture places a high value on stability are rule-oriented, predictable, and bureaucratic in nature. These types of companies typically provide consistent and predictable levels of output and operate best in non-changing market conditions. If you want to provoke a vigorous debate, start a conversation on organizational culture. While there is universal agreement that (1) it exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change. This is a problem, because without a reasonable definition (or definitions) of culture, we cannot hope to understand its connections to other key elements of the organization, such as structure and incentive systems. Nor can we develop good approaches to analyzing, preserving and transforming cultures. If we can define what organizational culture is, it gives us a handle on how to diagnose problems and even to design and develop better cultures. Beginning May 1, 2013, I facilitated a discussion around this question on LinkedIn. The more than 300 responses included rich and varied perspectives and opinions on organizational culture, its meaning and importance. I include several distinctive views below, illustrated by direct quotes from the LinkedIn discussion thread — and then I offer my own synthesis of these views. (There often were multiple postings with similar themes, so these are simply early selections; unfortunately it was not possible to acknowledge everyone who made helpful contributions.) “Culture is how organizations ‘do things’.” — Robbie Katanga Culture is consistent, observable patterns of behavior in organizations. Aristotle said, “We are what we repeatedly do.” This view elevates repeated behavior or habits as the core of culture and deemphasizes what people feel, think or believe. It also focuses our attention on the forces that shape behavior in organizations, and so highlights an important question: are all those forces (including structure, processes, and incentives) “culture” or is culture simply the behavioral outputs? “In large part, culture is a product of compensation.” — Alec Haverstick Culture is powerfully shaped by incentives. The best predictor of what people will do is what they are incentivized to do. By incentives, we mean here the full set of

incentives — monetary rewards, non-monetary rewards such as status, recognition and advancement, and sanctions — to which members of the organization are subject. But where do incentives come from? As with the previous definition, there are potential chicken-and-egg issues. Are patterns of behavior the product of incentives, or have incentives been shaped in fundamental ways by beliefs and values that underpin the culture? “Organizational culture defines a jointly shared description of an organization from within.” — Bruce Perron Culture is a process of “sense-making” in organizations. Sense-making has been defined as “a collaborative process of creating shared awareness and understanding out of different individuals’ perspectives and varied interests.” Note that this moves the definition of culture beyond patterns of behavior into the realm of jointly-held beliefs and interpretations about “what is.” It says that a crucial purpose of culture is to help orient its members to “reality” in ways that provide a basis for alignment of purpose and shared action. “Organizational culture is the sum of values and rituals which serve as ‘glue’ to integrate the members of the organization.” — Richard Perrin Culture is a carrier of meaning. Cultures provide not only a shared view of “what is” but also of “why is.” In this view, culture is about “the story” in which people in the organization are embedded, and the values and rituals that reinforce that narrative. It also focuses attention on the importance of symbols and the need to understand them — including the idiosyncratic languages used in organizations — in order to understand culture. “Organizational culture is civilization in the workplace.” — Alan Adler Culture is a social control system. Here the focus is the role of culture in promoting and reinforcing “right” thinking and behaving, and sanctioning “wrong” thinking and behaving. Key in this definition of culture is the idea of behavioral “norms” that must be upheld, and associated social sanctions that are 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 the existing norms promoted the survival of the organization in the past? Note: implicit in this evolutionary view is the idea that established cultures can become impediments to survival when there are substantial environmental changes. “Culture is the organization’s immune system.” — Michael Watkins

Culture is a form of protection that has evolved from situational pressures. 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. The problem, of course, is that organizational immune systems also can attack agents of needed change, and this has important implications for onboarding and integrating people into organizations. In the discussion, there were also some important observations pushing against the view of culture as something that it is unitary and static, and toward a view that cultures are multiple, overlapping, and dynamic. “Organizational culture [is shaped by] the main culture of the society we live in, albeit with greater emphasis on particular parts of it.” — Elizabeth Skringar Organizational culture is shaped by and overlaps with other cultures — especially the broader culture of the societies in which it operates. This observation highlights the challenges that global organizations face in establishing and maintaining a unified culture when operating in the context of multiple national, regional and local cultures. How should leaders strike the right balance between promoting “one culture” in the organization, while still allowing for influences of local cultures? “It over simplifies the situation in large organizations to assume there is only one culture… and it’s risky for new leaders to ignore the sub-cultures.” — Rolf Winkler The cultures of organizations are never monolithic. There are many factors that drive internal 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 figures importantly in defining its culture and sub-cultures. Depending on how acquisition and integration are managed, the legacy cultures of acquired units can persist for surprisingly long periods of time. “An organization [is] a living culture… that can adapt to the reality as fast as possible.” — Abdi Osman Jama Finally, cultures are dynamic. They shift, incrementally and constantly, in response to external and internal changes. So, trying to assess 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 big shifts (often in response to crises). Likewise, it highlights the idea that a stable “destination” may never — indeed should never — be reached. The culture of the organization should always be learning and developing. These perspectives provide the kind of holistic, nuanced view of organizational culture that is needed by leaders in order to truly understand their organizations — and to have any hope of changing them for the better. Healthy[edit] Organizations should strive for what is considered a "healthy" organizational culture in order to increase productivity, growth, efficiency and reduce counterproductive behavior and turnover of employees. A variety of characteristics describe a healthy culture, including:         

Acceptance and appreciation for diversity Regard for and fair treatment of each employee as well as respect for each employee’s contribution to the company Employee pride and enthusiasm for the organization and the work performed Equal opportunity for each employee to realize their full potential within the company Strong communication with all employees regarding policies and company issues Strong company leaders with a strong sense of direction and purpose Ability to compete in industry innovation and customer service, as well as price Lower than average turnover rates (perpetuated by a healthy culture) Investment in learning, training, and employee knowledge

Additionally, performance oriented cultures have been shown to possess statistically better financial growth. Such cultures possess high employee involvement, strong internal communications and an acceptance and encouragement of a healthy level of risk-taking in order to achieve innovation. Additionally, organizational cultures that explicitly emphasize factors related to the demands placed on them by industry technology and growth will be better performers in their industries. According to Kotter and Heskett (1992),[7] organizations with adaptive cultures perform much better than organizations with unadaptive cultures. An adaptive culture translates into organizational success; it is characterized by managers

paying close attention to all of their constituencies, especially customers, initiating change when needed, and taking risks. An unadaptive culture can significantly reduce a firm's effectiveness, disabling the firm from pursuing all its competitive/operational options. Charles Handy[edit] Charles Handy (1976), popularized Roger Harrison (1972) with linking organizational structure to organizational culture. The described four types of culture are:[20] Power culture: concentrates power among a small group or a central figure and its control is radiating from its center like a web. Power cultures need only a few rules and little bureaucracy but swift in decisions can ensue. 2. Role culture: authorities are delegated as such within a highly defined structure. These organizations form hierarchical bureaucracies, where power derives from the personal position and rarely from an expert power. Control is made by procedures (which are highly valued), strict roles descriptions and authority definitions. These organizations have consistent systems and are very predictable. This culture is often represented by a "Roman Building" having pillars. These pillars represent the functional departments. 3. Task culture: teams are formed to solve particular problems. Power is derived from the team with the expertise to execute against a task. This culture uses a small team approach, where people are highly skilled and specialized in their own area of expertise. Additionally, these cultures often feature the multiple reporting lines seen in a matrix structure. 4. Person culture: formed where all individuals believe themselves superior to the organization. It can become difficult for such organizations to continue to operate, since the concept of an organization suggests that a group of like-minded individuals pursue organizational goals. However some professional partnerships operate well as person cultures, because each partner brings a particular expertise and clientele to the firm. 1....