Why culture change is back on the agenda

 

Are we witnessing a resurgence of interest in organisational culture and, if so, why might this be the case?

Added on 12 February 2015 by Andrew Day

Business cultures in office environment

Organisational culture was a hot topic in the 80s and 90s. Edgar Schein wrote his influential text Organizational Culture and Leadership in 1985 and Tom Peters wrote In Search of Excellence in 1982. During this period, many organisations, such as GE and Ford Motor Company, were rolling out large scale culture change programmes. Culture was seen to be at the core of an organisation’s success.

In the intervening years, we have arguably experienced a waning of interest in organisation culture, perhaps because hopes were raised to unrealistic levels and topics such as leadership, innovation and strategy have taken centre stage.

Organisations, governments and the media are now returning to the subject of culture. When and where this resurgence started is up for debate; however, the collapse of the banking system in 2008 appears to have been an important trigger. In the subsequent ‘fall out’, more and more stories and incidents have emerged that have been linked to the cultures of many of the global financial institutions.

Concern about the cultures of our institutions has not been confined to the private sector. In 2013, Robert Francis QC’s report on his inquiry into the failures at Mid Staffordshire NHS Foundation Trust made a strong call for a change in culture ‘so patients are always put first’.

Culture change, it seems, is firmly back on the agenda.  Why might this be the case?

If we examine the coverage of the culture in the Banks and the NHS we can observe a debate taking place about how to regulate and control the behaviour of employees. On the one hand there is a call for greater regulations, controls and monitoring of individuals whilst on the other hand there is a recognition of the limitations of such measures to control behaviour. At the heart of the issue is a question of trust in people on whom we are dependent. Do they share our values? Do they behave in ways that we expect?

So where does culture come in?

It is very hard to police hundreds of thousands of people. What seems to be recognised is the role of social norms and values in influencing our behaviour. Cultural norms, if you like, are the invisible regulator of people’s behaviour. They both enable and constrain what we are able to do within any social context.

Psychologists and anthropologist believe it is the social exchange, or interaction, between individuals that regulates their behaviour. The social psychologist Karl Weick, for example, described the process of social enactments whereby we each actively, not passively, unconsciously create meaning with others. The anthropologist, Clifford Geertz, thought of culture as ‘patterns of meaning’ that are created, transmitted and maintained symbolically through the interactions between individuals. Put simply, we are all actively engaged in creating meaning with others and, as such, influencing and controlling each other’s behaviour.

How might this work in practice?

A recent Guardian article on the Foreign Exchange Traders gives a clear example of how culture is being enacted by the traders involved. The article includes a transcript of the traders congratulating themselves at the end of a trade in which they had manipulated the foreign exchange price. This is taken from an online chat room that was used as evidence by the FCA in their regulatory investigations.

“nice work gents...I don my hat”
“Hooray nice team work”
“bravo...cudnt been better”
“have that my son...v nice mate”
“dont mess with our ccy [currency]”

.

In this short exchange, the traders are legitimising and encouraging each other’s actions through shared congratulations, praise and by creating a sense of camaraderie or team spirit. It is through these ‘micro-interactions’ that cultural patterns are created. It’s notable that guilt, shame, remorse or concern appear to be absent from their exchange.

What lessons can we draw from this analysis?

Well firstly, we all contribute to the enactment of cultural patterns in our organisations through our behaviour. Culture is not something that happens to us. Secondly, the rules and norms that are created through social interaction both make possible what we can do and create limits. Finally, it presents a fundamental challenge to organisations. It is fairly straightforward to write a new policy and publish it but quite another challenge to influence how people interact with each other in trading rooms, hospital wards or the shop floor.

Find out more about our Consulting and Change in Organisations programme.

You can also view four video clips below to find out more about culture and the role of leaders in shaping and supporting cultural change.

What is Culture?

How can organisations address cultural change?

The role of Leaders in shaping and supporting cultural change

Ashridge’s approach to working with organisations on cultural change