Does Organization Culture Impact Strategy?

Zappos, a maker of shoes, has been in the news a-lot lately because of its adoption of a “holacratic” operational model in lieu of a traditional management hierarchy. Zappos expects all of its employees to make their own decisions about everything, and to work things out with others through collaboration. To scale this, they have defined a governance structure for overlapping teams and how those teams make decisions. It is significant that Zappos only hires people who can thrive in this type of environment. The Zappos core values are:

1.    Deliver WOW Through Service
2.    Embrace and Drive Change
3.    Create Fun and A Little Weirdness
4.    Be Adventurous, Creative, and Open-Minded
5.    Pursue Growth and Learning
6.    Build Open and Honest Relationships With Communication
7.    Build a Positive Team and Family Spirit
8.    Do More With Less
9.    Be Passionate and Determined
10.    Be Humble

If your organization is made up of people who have these values, then you pretty much have no choice but to let them have a great deal of autonomy about how they work: they will not be successful any other way, because these are all highly individualistic, creative, and self motivated people.

Now consider a government agency. The mission and core values of the US Forest Service are:

1.    Safety - Safety will never be compromised, regardless of the work at hand.
2.    Tradition, Pride and Respect - Don’t rest on the Hotshot name!
3.    Physical fitness and mental toughness - Rise to the occasion, strive to be the best.
4.    Productivity - An honest day of work in return for an honest day’s pay, regardless of assignment.
5.    Unity and Diversity - Communication and teamwork get the job done.
6.    Professionalism - Constantly being watched and evaluated… the details matter.
7.    Training - MIHC is committed to training quality leaders, both in the classroom and on the line.
   
Do you see any mention of passion? Of embracing change? And notice that “training” replaces “pursue growth and learning”, indicating that employees expect to be trained rather than learning on their own. There is nothing wrong with these values – they are all good things – but they emphasize different things such as safety (some Forest Service workers do field work), tradition, and professionalism.

This brings to mind the comments made in a recent article by conservative pundit Grover Norquist about his experiences at the very bohemian Burning Man festival in Nevada: “The story of Burning Man is one of radical self-reliance…A community that comes together with a minimum of ‘rules’ demands self-reliance – that everyone clean up after themselves and help thy neighbor. Some day, I want to live 52 weeks a year in a state or city that acts like this…This is hard work. Indeed, there is entirely too much work involved at Burning Man for lazy people to get to the Playa, nevermind build a camp or feed yourself.”

The last sentence is significant: people who are not interested or not able to meet the expectations of the Burning Man ethos do not attend it. The “radical self-reliance” that one sees at Burning Man is a result of its culture and the kinds of people who it attracts. Culture is not only a result of learned patterns of behavior and experiences: it is also a result of the natural tendencies of the individuals in a population. Nature versus nurture: they both matter.

Given this, one cannot expect two very different workforces to react the same way given the same approach from their executives. It is therefore absolutely crucial to understand the culture when planning for transformation.

One cannot expect two very different workforces to react the same way given the same approach from their executives.

One of the most respected methods of formal cultural assessment is the Barrett Cultural Values Assessment. The Barrett approach involves having staff take this assessment, and then a facilitator helps them to discuss the results, which enables them to account for their own cultural biases when they plan for change. In this approach, leadership is about guiding this process.

This sounds like it might be generally applicable to all organizations, but then consider the case of Steve Jobs, who was famous for being autocratic, yet he made Apple into a huge success – twice. Barrett points out that people who have exceptional “charisma” and “reputation” can get away with being autocratic because they inspire people: people will put up with command-and-control behavior if they trust that the leader is taking them somewhere and they feel that they are making a contribution. They “feed their self-esteem by association, and shared identity,” as Barrett puts it. One might call exceptional people such as Steve Jobs “unicorns” – you hear about them, but few have seen them, and so what works for them might not work in a general repeatable manner for others. The same applies to organizations: what works for “unicorns” like Netflix, Amazon, and Google – or Zappos – might not work for other organizations that have different cultures, or different levels of financial resources for making things work at any cost.

Unicorns aside, let's use an example to think this through. Consider the very last impediment listed on the chart from my July 25 post: “Technical skill silos need to be broken down”: in order to address that, it will likely be necessary to change how many of IT’s traditional functions work, and that will require getting senior IT functional managers to meet and discuss that. Since these individuals have been operating in silos (per the impediment’s proposition that silos need to be broken down), the manager of each of these silos has been operating in a kind of zero sum game with respect to the other silo managers, and so it is almost inevitable that there is an atmosphere of competition among them rather than an atmosphere of collaboration. Changing that behavioral dysfunction will take more than getting them to understand themselves better – it will require some very aggressive and meaningful action on the part of the CIO, possibly including changing compensation incentives, reorganizing the functions and how budgets are allocated, and creating some team efforts that can only success if each of these individuals makes an effort – in other words, truly putting them all on the same team rather than arranged as competitors. These are structural changes. The real question is how those changes will be conceived and implemented: (A) autocratically with a dictum to come up with a solution without any facilitation or guidance – i.e., “make it so”, (B) through micromanagement that dictates the details of every change, or (C) through a facilitated collaborative process that is somewhere inbetween the extremes of A and B, that is sensitive to the organizational cultural that exists at that point in time and that allows the staff to participate in defining the changes – including the required cultural changes.

Which do you think would work best? But even if you pick C, there is still the question of how much guidance to give, and the answer to that depends on the organization's culture.