Peter Drucker allegedly said that culture eats strategy for breakfast. If strategy is for breakfast then your structure is for lunch. Culture will overcome any structural chart or any reorganisation. Companies fail because they believe that a restructure will change the culture of the company. Even if a restructure creates temporary success, culture will reassert itself. Often senior managers ignore organisational culture because it works for them, by ignoring culture; the senior managers indicate that the organisation cannot learn because they engage in single loop learning. If senior managers cannot talk about culture, they are incapable of double loop learning. Culture refers to “the way we do things around here” , which means it requires double loop learning. Culture cannot be fixed by simply fixing mistakes. Culture is what creates the mistakes and it will always remain no matter the organisational chart or the structure chart. One of the main reasons why senior managers pursue restructures is that they believe that structure determines culture.
If structure determined culture, why would we talk about culture? The question captures the tension between culture and structure. What links them is organisational learning. A hierarchical learning organisation will behave differently than a matrix or decentralized organisation that cannot learn. What we find in organisations that can learn or have a learning culture is that teams and units work well because they can learn and adapt. As a result, they do not need to restructure. What they do need, though, is to be refreshed with new members or new responsibilities. However, the successful managers never confuse a restructure, a structural change, with double loop learning, a way of working. As complex entities, teams explore why they succeed and what needs to be changed to maintain that success. By contrast, most managers and most organisations focus on single loop learning so they turn to restructures in the hope that they will achieve double loop learning and changed ways of working. Successful managers look at ways of improving their teams and their units by building on their existing culture. The manager and the teams are both learning. They understand that maintaining a successful team requires adjustments and some change yet that change or outcome is not determined by the structure. If the structure is wrong, it is changed because the culture is working. The changed structure will not bring a new culture. As they realize the importance of culture within the team, and the wider culture of the organisation, successful managers reject the belief that minor adjustments within a team or teams can be scaled up to the whole organisation to achieve the result seen within the team. When managers and senior managers believe that minor changes in structures or teams can be scaled up to the organisation, they have forgotten culture. In the same way that those managers who are short sighted or simply without vision seek to restructure as an end in itself. In a dysfunctional organisation, senior managers start to restructure as a conscious strategy to avoid dealing with the corporate culture.
Restructuring to avoid dealing with a corporate culture When senior managers use restructures to avoid dealing with culture means that everything is in flux. Teams, units, and divisions are constantly working out their roles, responsibilities, and resources, with each restructure. Instead of creating a new culture to adapt, they only learn to adapt the existing culture to the new structure. As such, they are not doing double loop learning. Instead, they are using the restructure as single loop learning by adapting the existing culture to the new structure. Chief Executives, especially new ones, believe they have to stamp their authority on the organisation. Many do this by changing the structure to fit their vision. Often they choose a structure over culture because structure is concrete and easier to manage. Culture is harder to express than a structure on a single PowerPoint slide. However, successful CEOs will know that they will need to work with the culture to ensure their restructure succeeds. Experienced senior managers know that changing a culture will have a greater impact than any change to the organisational chart or roles and responsibilities, which means the two aspects need to work together.
Does your structure reflect your culture? In a learning organisation, the answer is yes. The reason why it will be a yes is that the managers are asking questions and challenging the organisation on a regular basis. When managers claim to have a decentralized and empowering culture often referred to as tight/loose, but the structure is hierarchical and centralized, you can see a gap. When senior managers claim they empower front-line staff, but give money and resources based on the hierarchy, the language does not match the reality. What we see is that the managers have stopped asking questions about the effectiveness of their culture. The structural problems reflect the cultural problems.
Restructuring is a way to solve many problems except for culture. Restructuring is popular because companies can find it difficult to talk about culture. It can also be difficult for an organisation to know itself. Instead, managers talk about their strategy, their structure, or even their values, such as being customer centred, but will find it difficult to articulate, described or even speak about their culture. Culture is messy. It gets back to identity and engagement neither of which is easy for a manager to do. Yet, culture is what creates an engaged employee willing to do more for the company. A company’s culture is more than a list of values, yet many companies will point to a list of values and say “That is our culture.” If that is how you understand your culture you will not be able to change it because you do not know what it is. Culture is made up of the myths, stories, and accepted practices that infuse an organisation and explain the way we do things around here. For many managers culture is a challenge because they take it for granted. “It is what it is, so why change it”. For others it is resistant to change because of tradition, inertia, and habit of ways of working that require too much effort to change so it is best to work with it. “You are never going to change it, so why try?” In truly dysfunctional organisations, the Chief Executive or senior managers make their peace with the organisation and begin the slow, but certain, process of becoming institutionalised. “It’s not perfect but we are getting improvement so if it aint broke don’t fix it.” When that occurs, especially after a restructure, the organisation has exhaled. It can now breath again after the uncertainty of the restructure. The senior managers reach a new equilibrium and a culture change is avoided. The senior managers settle for what is working and do not seek to push the organisation to improve. They stop asking the questions about the culture, challenging the myths that hold the company back and just look happy to get along with the organisation.
Culture is messy; Structures are tangible We can see why senior managers want to avoid the culture discussion, or avoid trying to understand the way we do things around here, by focusing on structure and strategy. Senior managers can busy themselves with meeting after meeting discussing the strategy, or the structure, without examining or understanding how things are done. When an organisation cannot talk about its culture but is sure of strategy and its structure, it sees restructure as the solution. The management team will solve the problem it knows. However, each subsequent restructure fails to achieve the required results so more restructures are needed. The restructure cycle begins, but never embeds because it does not address the culture. The cycle unfolds in the following stages. The first stage, we see the management team arrive bringing the solutions searching for a problem. They scan the organisation and take stock of teams and talents. They then decide that a restructure is needed. The next stage emerges, which is the post-restructure period. As the teams and units are pushed into uncertainty, some respond and others continue to lag. Overall performance improves as individuals and teams seek to benefit from the changes. They believe the new ways of working will lead to a change in culture. After a few years, the culture has not been addressed, except in a superficial way, the third stage emerges. In this stage, culture reasserts itself. There has been some change and some improvement, but the underlying organisational culture remains. In a sense, the organisation cannot learn which creates its blindness to the need to change culture. The next restructure is done, and the cycle continues. Once restructuring becomes an end in itself, has management stopped?
Speeding up the restructure cycle will not change the culture. We may continue to restructure and find an initial benefit as people seek new ways of working to adjust to the change in structure. Yet, that too will slowly, or quickly, unravels because the organisation, like its culture, is just waiting to exhale. The changes will be absorbed and the organisation will return to the way it has always worked. More and more restructuring will not change the culture because the restructure does not address the issue.
What needs to be done? An organisation and its managers need to be able to talk about how things are done. For example, if an organisation claims to be customer focused, putting the customer at the heart of everything it does, why does it have such high numbers of complaints? The managers have to look at the culture and the systems they have created. They need to look why their intended outcomes are not being achieved. What is also needed is a willingness to hear bad news and find a way to discuss it. If the organisation cannot find a way to discuss bad news, it cannot address its culture. An organisation may survive a long time with single loop learning and restructuring, but it will face a reckoning point where it has to change its culture or collapse. When you face your next restructure, ask yourself; is it to avoid dealing with the culture or because it reflects a learning culture?
- Organizational change (culckhouman.wordpress.com)
- Learning to Change and Changing to Learn or BBQing the scared cows (organisationallearninganddevelopment.wordpress.com)
- How to effect culture change in financial services (openbusinessperspectives.com)
- The power of the Learning Organisation (thebrsblog.com)
- “Speak Up and Say No!” (leadbeyond.org)
Pingback: Do You Know Your Cultural Fit? | Benefit Point
Pingback: Who is creating the rotten barrels in your company? | Thoughts on management
Pingback: My response to the NSA public consultation | Philosophical Politics
Pingback: Building a Culture: You Need to Harness the Value of Core Values
Reblogged this on Ronswithscissors's Blog.
In my view culture is avoided and structure is preferred because structure is more concrete, and culture is more abstract, interpersonal and “softer”. Most management types avoid these like the plague.
I think culture is driven by the company values and principles, and by the extent to which the staff are embracing these two. Culture is what make people stay. Strategy is what people fight for. Both goes in hand. No strategy=you go nowhere. Poor culture= people don’t stay.
I think culture is driven by Senior Management behaviour, in context of the stated values and principles.
Structure changes will not change cultures – people create cultures and they will fight against the purpose of structure changes unless they agree with the ‘Why’ motivating the change. People behave according to the organisation’s Purpose and Values if it aligns with their own sense of purpose and values.
I agree but – slightly off topic – there’s another, bigger predator: context. I blogged about this as recently as 24 June 2015 http://www.leadingautonomy.com/concepts/corporate-culture-part-1/ . The point I was making is that context is the top of the food chain and, while there is nothing new in the power of context, the power of managers to shape or even discern the context their people perceive is deteriorating.
Today context is much more personal than in the past. There is just so much more information, and misinformation, for each of us to acquire separately and weave into our own narrative.
Culture is king and drives everything about your and your organizations Brand. It may not be visionary – but is definitely mission critical.
I feel that Culture is at the core of every company. Any associate that steps into a new company/role will need to buy into the culture well before the structure or even rewards of the position. If leadership chooses NOT to value its people; it will lose its culture. In the USA, as baby boomers retire and or have been paid lots of money to leave companies – allowing the company to bring in “fresh” talent, it pays for – with lost culture… the culture of those that created it in the 1st place. By assessing the skills and talent of the existing workforce 1st, companies can not only retain mad skills, but culture. Retrain, Repurpose and drive on an amazing culture. Talent Management is the 2nd key component to driving the culture. Strong TM practice that occurs in real time and regularly can set the stage for top performance by both new and existing associates at every level. Its like making soup, you can’t toss all the ingredients into a pot and expect them to come together. You have to get your hands in, mix it all up so that all the ingredients come together and bring out the best of each other and create something sweeter than the single ingredient – a fabulous and long lasting culture.
Culture is the learned and communicated experience of the institution which is the set of structural statuses that make up the organization and define the legitimate behaviors expected of those occupying a particular status position. One of the problems with restructuring is that it often fails to take into account the true roles of a particular status and thus separates the learned and expected behavior of the individual from the new expected behavioral set of the new status. Just like a new hire, a new structure requires learning and unlearning behaviors and expectations associated with the new job, or status and its place in the total institutional structure.
thank you for sharing this great article! Being a culture driven company is a hudge asset. Employees are more engaged and passionate about what they are doing, they feel they are more important than process and structures. Complicated to grasp, it’s a tremendus tresure in particular if you succeed in sharing it, living it, keeping it alive, flexible (oral transmission),endorsed by management, and interpretable in different cultures. Unfortunately it’s very hard to express, hence the shortcut to assimilate it to values, and to make it evolve, hence the preference to try organisational changes first.
Pingback: Culture Eats your Structure for Lunch by Lawrence Serewicz (2011) | bullying in the workplace
Three words – “Bolman and Deal”.
I am also of the opinion that too many or too much structural changes can damage a good culture, the new culture becomes one of survival.
Pingback: “Flavor of the Month” – Culture, Culture, Culture – From A Distance
Create values based on culture and create a mechanism to check how people demonstrate those values in the organization. There are many social recognition softwares which helps you do that.
Can’t agree more…change the way your system works and be adaptive with a learning mindset….drawing and redrawing reporting lines are either counter productive or short lived; at best.
Interesting article. I’m also of the opinion that culture should be protected when it contributes positively to an engaged and productive workforce that delivers results in line with the corporate vision and strategy. However, there can be cases when the culture may not be good for business even though the employees may like “the way things are done here”. In such cases when the culture has a negative impact on the corporate vision and strategy, it needs to be changed. How can that be addressed?
It being “well known” that Peter Drucker said that is wrong. Nobody can cite any time he actually said this at all. It’s well known because it’s become folk lore. Not true though. Places like this perpetuating that myth is frustrating. I completely agree with the sentiment though… Just get the facts right please. It detracts from a great topic!
Thanks for the tip about Drucker’s quote. I had a quick search and could not find a reference. I have updated the article to reflect that it is apocryphal. With all great figures he becomes a source of myths and legends. it would have been something he might have said. Using his name often adds gravitas to a statement that spoken by another would sound trite.
“Famously said” is still too assertive, because you are still claiming he said it. I ended up here trying to validate the quote myself. You’ve written a great essay – thoughtful and rewarding. May also inspire me to dig into double loop learning. Am curious – you imply that companies can change their culture, but I wonder in most cases if employees sensing the disparity wouldn’t be better off going where their insights mesh – instead in of wasting time trying to influence intractable seniors.
Culture is only “messy” when the Purpose of the organisation and its people is not clear. When it is clear, the culture is crystal clear and certainly not messy.