I was speaking recently with the CEO of a successful, growing e-commerce services company. The subject was organizational culture, and how to consciously create it. Coincidentally, another call a day later with the CFO of a 2,000 person biotech company on the East Coast was about the exact same thing.
It seems that the attention being paid to the concept of “culture” in a business has never been higher, since the point where it was introduced by the founder of modern management theory, Peter Drucker, in 2006. Now, each day a new service firm is created to support what appears to be a growing market for guidance in building a desired culture.
It’s always been a critical element of why some organizations endure and others don’t. The form of the topic, its scope and perspective, its terminology have changed, however. Now, “culture” has come to be the most prominent word to describe the collection of behaviors that are considered required, or at least promoted, throughout an organization, by those who hold the most authority and thus potential influence on the lives of others in the organization.
Before Drucker uttered his now-famous phrase, there have been many approaches to deciding how an organization should collectively behave. Some are repugnant to our modern ear. There have been periods where organizational culture rested on concepts such as slavery, indentured servitude, even human interchangeability. This last phase started when scientific management practices were introduced by Frederick Taylor, an engineer, in the late 1800s. People were viewed as components in a human machine, with processes and procedures as the main topics, supported by data on the statistical range of human abilities, such as reaction time and visual acuity. Humans were, as in slavery, things to be placed on the game board of capitalism.
That view continued for quite a while, until the advent of collective bargaining and unionization of those interchangeable humans. Finally, the balance of control over economics shifted more evenly between the human “cogs” and the business owners. Then we automated away most of those union functions, and entered the era of the service economy, where non-product value exchanges form the largest segment of the economy. As the labor market tightens for knowledge workers and those in “essential” lines of service, unions aren’t as necessary to equalize the bargaining power. Now organizations must appeal to the broader set of human motivations in order to maintain the economic viability of their companies. If the majority of your ability to generate revenue and profitability rests in the minds of people, who have increasing control to negotiate their remuneration (in the long run, as recessions do not last as long as economic growth cycles), now you have to pay attention to the quality of their daily experience within the organization. Because that’s what they want.
It’s this last point that was the subject of my discussion with the biotech CFO. She understands that addressing the quality of life experience in her organization is fundamentally a business strategy for accomplishing any particular objective laid out ahead. Her leader, the COO, thinks it’s only an issue of compensation, and the need to find a way to compete with the compensation structure of VC-backed biotech startups. Psychologists have pretty firmly established that after a certain income level, about the median for the U.S. for example, other factors start to become more important to a person than money. Like enjoying one’s work, finding meaning in it, as part of a group that goes out of its way to help each other in good times and bad. Like seeing a path ahead for one’s career and opportunities to learn, experience new things, apply one’s aptitudes and interests for the benefit of all. Like feeling one’s leader is admirable, trustworthy and interested in one’s well-being. Feeling safe in tough times.
One reason “culture” is so popular right now, is that many business owners have realized they have to address the whole human, not the “cog” that scientific management describes. And unless they are among the hopefully few people who have essentially no awareness outside themselves, eventually business owners and leaders realize that they, too, want work life to at least not suck. Another reason is risk. Improving culture is viewed by some leaders as necessary to lower the risk of negative public relations, or to recover from scandal, and not an end in itself. The impact of social media has been huge in creating business risk resulting from what the public might think is inappropriate behavior within a company.
So here’s the problem. No matter the organizational motivation, many leaders haven’t yet realized or accepted the truth of what they say they want. That truth is: creating a culture is about significant personal and collective behavior change. A culture evolves through enduring, collective, consistent daily behaviors that are intentionally chosen. They won’t become unconscious and self-sustaining for a long time. It takes constant awareness, adjustment and reinforcement. Depending upon how “far” the organization’s current state is from the desired cultural description, it could take several years. The leader of the organization is the one who sets the pace of personal change–it’s not possible for an organization to evolve faster than the leaders can. And you’re really never done, because humans stray, hiring mistakes occur, promotional mistakes happen, leaders get tired of being the paragons of virtue all the time and values will always cost something to keep them. Or they’re not values.
This article is for all of you leaders out there who really want to create an enduring, thriving organization where people want to be, having the time of your lives as you engage in the wonderful game of business. If you aren’t where you want to be yet, just know it’s a long, long journey. There are no “best practices”, no formula or recipe that will get you to your organizational goal in a few short weeks or months. But that’s okay. The joy is in each and every step along the journey, not at the finish line. Because there isn’t one.