The word “culture” confuses people. For some, the word defines the customary beliefs, social norms, and material traits of a racial, religious, social, or organizational group. Others insist shared attitudes, values, goals, and practices define the culture of a group. Still others maintain that culture is the pattern of human knowledge and behaviors that depends on a group’s capacity for learning and transmitting knowledge to succeeding generations.
“Culture,” the new buzzword of the financial recovery, has transformed from an ethereal, abstract otherworldly word to a blunt instrument for finding fault on myriad qualitative matters affecting the organization. When an individual, merger, or organization fails, culture takes the blame. We use the word fairly arbitrarily, citing it to explain why things don’t change, won’t change, or can’t change. It’s that subtle yet powerful driver that leaders strive—often futilely—to influence.
No one seems to know what it means, what it looks like, what symptoms indicate it works, or how to measure it. The new rabbit that both leaders and regulators want to chase, culture jumps from one issue to another before it disappears down a hole, only to resurface with the problems it spawned while in hiding.
We need a new way of thinking about culture—one that makes sense and gives us an understanding of how to improve companies. It starts with a new definition of culture: BAR, Beliefs, Actions, and Results.
We base our decisions on what we know to be true—what we believe. Sometimes, however, we believe something that isn’t true. Both intellectual and emotional, beliefs influence our behavior when facts and reason alone don’t.
“What you are speaks so loudly I can’t hear what you say,” noted Ralph Waldo Emerson, capturing the essence of what separates espoused beliefs (what we say we believe) from operating beliefs (the way we do things around here). But Emerson’s observation omitted other factors that influence beliefs, such as habits, mental models, and traditions—or the way we’ve always done things around here.
Espoused beliefs start with an individual’s perception of right and wrong—someone’s sense of what ought to be as opposed to what is. When outcomes prove the individual right, and others observe this, they create shared beliefs that the same course of action will work in the future.
When the gap between what you merely say and what you really do narrows, tough decisions become easier, and cultures improve. High-stakes situations demand that leaders make their decisions based on their core values—the intersection of what they believe and how they behave.
Beliefs reflect those perceptions that leaders consider “correct.” Over time, the group learns that certain beliefs, or values, work to reduce indecision and doubt in critical areas of the organization’s functioning—all leading to actions and the results of those actions.
When leaders continually and constantly grapple with the tough questions and develop a list of standards that serves as more than a nice poster, these beliefs serve as the bedrock of the organization’s actions—decisions related to both strategy and tactics. These decisions provide guidelines about how and what to change and what everyone needs to learn in the process. Defining culture is only the first step, however. Measuring it offers more challenges.
Leaders can’t measure organizational culture the way life guards determine chlorine levels in a swimming pool, but if leaders start with a list of criteria for evaluating culture, they move closer to controlling it. When assessing your culture, ask yourself how often you face these situations:
- An inability among senior leaders to articulate the organization’s strategy
- Excessive risk taking
- Fines and other adverse regulatory or legal events
- Financial losses
- “Workarounds” or other deviations from protocols
- Persistent customer complaints or the loss of key customers
- Turnover among high potentials
- Resistance to innovation
- An inability to learn from mistakes
- A tolerance for code of conduct violations
Measuring things like how often people go to happy hour together or where they rank themselves and others on a happy-to-grumpy scale will provide no useful information. Not one shred of evidence exists to indicate that happy employees act more ethically than unhappy ones, but theorists persist in measuring this and other irrelevant data.
Knowing what to look for and then making decisions to act on the information can turn things around, however. Success is about ideas—not style—and leadership is about tying those ideas to core beliefs, making the right decisions, and expecting dramatic results. Only when leaders understand this new paradigm will they be able to initiate major strategic and tactical change programs that will position their organizations for success and raise the BAR.