Culture is a fascinating term. It is considered the most influential force in a team and company. With the right culture you can do pretty much anything you want, with the wrong culture you will experience a slow and painful decline. Culture has made and broken companies the world over.
I do not think it is unfair to say that culture is one of the most unknown forces in business. It is difficult to measure and it’s difficult to influence, yet it is so important.
Many companies try to deal with culture through process, tools, management, yearly reviews, half yearly reviews and various other ingenious tools and techniques to try and bring this aethereal force under tangible control. There is, however, no clear scientific evidence to support how to measure culture or how to influence culture.
So, what is the point in my writing this bleak post about an uncontrollable company destroying force? I want to try and uncover the mystery behind culture. I want to apply hard science to understand it, measure it and manipulate it with repeatable and predictable outcomes proven with fact and hard evidence. Data, data, data…
The first step here needs to be to define what we expect culture can impact. There may be things missed here, and when we identify other things affected by culture then we should include them.
Culture can impact:
- Employee happiness
- Client happiness
- Customer happiness
- The bottom line
- Maturity of relationships
- Sentiment when concluding an account
- The ability to grow
- The ability to increase profit margins
- The rate of delivered value
- The quality of delivered value
- The ability to respond to change
Considering this idea, we can come up with a problem statement and a hypothesis.
The problem is:
We currently don’t know the level of impact of culture within businesses and we have no idea how to control and influence it.
The hypothesis is:
A culture which has a mostly positive effect on its impacts results in an overall win for the team, group, company with that culture.
I think we probably need to figure out what success looks like. I think it’s fair to say that success, in the context of a company, is that company being able to sustain and improve profit margins at the will of the company owners. If growth is desired, then growth should be easily possible without causing disruption. Success I suppose is ultimately business stability. There is a lot that goes into that, it’s difficult to quantify and is comprised of so many different causes and components.
So, we currently think that culture is complex. But we still don’t really have a definition of it. I’m going to postulate a few statements which I think adequately define culture in a way we can try and manipulate it.
To do this, I want to make a statement. Please clear your mind and just reflect on the next words:
Culture as a bottleneck
At first glance, this statement doesn’t make sense, but I think if you take a bit of time to really think about it you’ll start to see a spectrum of possibilities.
Suppose for a moment that culture is difficult to grasp as a tangible thing because it isn’t a thing. Suppose that instead it represents a channel, mechanism or process (in the none managerial sense).
Whether or not we accept this as hard truth is difficult to know, it may be true, or it may expose a different word/term which correctly describes what is going on. Stay with me here, this is a thought journey.
If culture is considered as a channel, then there must be something that flows through that channel. If culture is a bottleneck, then that channel must have limited capacity.
So, if culture is a channel, what is it a channel of? What are the sources and terminals? If we look at what culture impact’s, then we can see a common theme there of people and their opinions. Opinion is formed when people observe conversations, actions and outcomes which impact things that the person cares about. Impact of conversations, actions and outcomes therefore must impact how a person feels. This can then be thought to impact how likely a person at a client/customer is to agree to continue to do more business and buy more of the product.
I’ve made a few logical jumps there. They feel instinctively correct however they will need to be proven.
What impacts the content of conversations, actions and outcomes? Conversations and actions are usually driven by an individual’s goals and values. Goals and values can be formed based on complex stuff, however for the purposes of this I think that goals and values are tangible enough to understand, and even to determine and set. There is something cyclical here, a person’s goals and values influences another person’s opinion which in turn influences the other persons goals and values. Goals and values shift and changed by these experiences.
So, we have a wonderfully closed loop. Let’s recap a few key ideas so far:
- Culture is a channel
- The culture channel has limited capacity
- The culture channel transmits events sourced from the goals and values of a person
- The culture channel transmits events which terminate and change the goals and values of another person
- The events are conversations, actions and outcomes
Let’s assume that if the goals and values are perceived as negative with respect to the desired state of a company, then these goals and values will cause others to develop more negative goals and values in the relation to the desired state of a company. A toxic culture becomes more toxic. If this is true then perhaps it is also true on the opposite, a positive change may be able to cause more positive changes.
Now, this is where there is a glimmer of hope and we have an opportunity to prove or disprove this. We have postulated that the culture channel can only handle a limited amount of event through put. That is central to the idea of culture as a bottleneck. Therefore, this bottleneck can be exploited. Assuming that culture is a bottleneck then the culture channel should be focused on only positive value adding culture work and events.
What does this mean? This means that by flooding the culture channel with conversations, actions and outcomes aligned with having a positive impact on the company goals and values should result in the propagation of these goals and values through the staff, clients, customers, consumers and ultimately impacting the bottom line.
What does this further mean? This means that to be successful this approach must be shared, supported and ultimately positively and actively pursued by anyone and everyone in a position of influence. Pursuing this means not just paying lip service and having hidden agendas but having completely transparent agenda’s and sharing those honestly and earnestly where your peers and reports are able to see, to observe and to believe that you mean what you are saying.
I would love to run experiments around this, having a control however is difficult because what company is going to want to purposefully hold back on being better? So, I propose that a company use a before and after set of observations and data collection to identify the impact.
This is just a thought experiment right now, it needs a lot of work and a lot of thought but I think it has a lot of potential and is worth considering scientifically.