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Is organizational culture over-hyped?

If you’re in HR, or you’re the CEO of an organization, chances are that you talk a lot about your “unique” organizational culture. It’s also a favorite of academics. Definitely politically correct. But even the promoters of organizational culture don’t exactly know what it means – see for example this article, direct from the PC headquarters of academia, the Harvard Business Review, “What Is Organizational Culture? And Why Should We Care?”. Of course the author asserts there is such a thing although even he isn’t sure what it really is.

So let me define organizational culture in my own inimitably biased way. The doctrine of organizational culture asserts that organizations have, can have, or should have a set of values and behaviors that are unique to themselves. There is no other organization on the planet that thinks acts and behaves like they do. If you like it’s the organizational parallel to American exceptionalism, or whatever country you like that cares to assert that it too is exceptional.

The doctrine asserts that the reason for the organization’s success is its truly unique culture, that no-one else possesses. You could compare it to anthropomorphism, that humans are the only intelligent creatures in the universe, the chosen ones and that’s why we are all collectively so great.

Of course I’m hardly the first person to write about organizational culture and its discontents. Phil Rosenzweig’s 2007 book “The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers” debunks organizational culture (and much more). But it’s a tough myth to squash because it is so strongly self-serving for organizations and CEOs that want to create a storyline, or myth about why they are so successful, essentially the corporate version of the chosen one. Or soup up their stock price.

Now this isn’t to say that organizational culture doesn’t exist, or that there aren’t important and systematic differences in it between both market sectors and companies. It’s clear that there are huge differences between the organizational cultures of government agencies, nonprofits, the military and the private sector.

I’ve worked in government so am well aware of the differences between it and the private sector. Basically in government it’s all about keeping the voter happy no matter what the cost or inefficiency. In the private sector it’s (generally) all about making money and being ultra-efficient.

I haven’t worked in the military but I have worked with them and I can easily accept the exceptionalism of being within an organization that serves to kill the enemy and the limits that places on the way you think and act. The same for nonprofits. So let’s accept that each of these sectors is exceptional with its own type of organizational culture.

And it’s also true that within the private sector you get systematic differences in organizational culture too. These revolve around the main focus of the company, be it sales and growth, products, quality and finance.

Again that’s hardly a new idea, check out Danny Miller’s 1992 book “The Icarus Paradox” which sets this out and shows how companies generally fall into these main categories of organizational culture which sets up a bright dividing line between different companies with these different cultures. Incidentally the punch line is that it is the existence of such organizational cultures that inevitably leads them to fail when their culture gets too religious about it.

Nor does my skepticism mean that I cannot admit that there are certain other companies that are exceptional, and that this flows into how they act and think in ways that are unusual, albeit if not exceptional or unique. Mostly these are companies that have been fabulously successful like Google, Yahoo (in its early days), Tesla now (although of course it is bleeding money) and Apple.

These wildly successful companies are sitting on so much money that they can afford things that are luxuries to normal working stiffs in normal companies. Free gyms, time off, free food and other bennies that I probably haven’t even heard of and if I had would make me insanely jealous and gnash my long-suffering teeth.

So let’s admit that companies that are wildly successful from a financial perspective AND pass on some bennies to the serfs, also have unique organizational cultures. But let’s also accept that it’s from their outlandish success, not from the chosen nature of their leaders or people. That is, it’s strictly temporary, and continues only as long as the money lasts. Just like General Motors and US Steel also were exceptional in their day and either defunct, dying or just plain ordinary now.

And finally, being skeptical about organizational culture doesn’t mean that there aren’t outliers. How about Zappos, with its culture? It’s infamous contribution to the management lexicon is “holacracy” which actually means no managers (except, of course, the CEO). Some see it as being bizarre but in my book that definitely counts as being exceptional and a bona fide example of a unique organizational culture, even if it’s totally weird.

There’s probably quite a few of these around which haven’t hit the management textbooks yet (the Trump organization maybe?). So let’s admit the (tiny number) of the weird and bizarre to the august club of exceptional management cultures.

But guess what? All of the exceptions aren’t enough to result in the vast majority of organizations possessing an exceptional organizational culture. In fact the opposite is the case. In the case of the private sector the vast majority of companies are working stiffs trying hard to eke out a small profit and the only thing that distinguishes their culture is how hard they try to cut costs and the extent to which they shave a smidgen off what their competitors achieve.

The vast majority of government organizations aren’t exceptional; they’re just trying to mosey along over-spending their budgets with the program set by the politicians and trying to look like they are working hard for the taxpayers. The militaries of all countries are essentially the same given a few political commissars more or less in some. Ditto for nonprofits, well in the West anyway. The vast majority of organizations in all sectors are boringly similar.

But of course that doesn’t stop anyone of them trying to look as if they are different. Leaders want to think they have made a difference. New CEOs and boards want mission statements that reflect what they think the public would like them to be even if they aren’t. All organizations, just like most individuals, want to be different and exceptional even if they aren’t. It’s just part of human nature to want to stand out from the crowd.

I’m not against organizations trying to be exceptional. What I am against is the tokenism that so many of these attempts involve. Ultimately they are self-defeating because the employees always know even if John Q. Public doesn’t.

To adopt some PC vocabulary myself, I think that if an organization strives for true authenticity, that will get it to the unique organizational culture appropriate for it.

But authentic leadership is yet another story….

 

 

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Sunday, 25 June 2017

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