Culture matters A Lot! Cultural Interactions matter MORE!!
“Failures of culture have been the single biggest destroyers of value in the last five years,” states the former senior vice president of HR of Google in a recent article.[i] This revelation by one of the contemporary tech giants supports the previous dictum, “Culture eats strategy for breakfast.” Depending on one’s perspective, this latter quote can be attributed to literature dating back to the mid-1980s.[ii]
Regardless, the central role of culture in an organization has long been recognized. One wonders, if this is true, why has so little changed in 30+ years?
This writer is personally aware of three major cultural debacles by large publicly traded firms where shareholder value was destroyed through inter cultural challenges. In one case, the ‘then’ acquiring firm was subsequently acquired itself in part because of a seemingly dysfunctional culture.
The Inc. article goes on to describe three demonstrable risks management must attend to in their mitigation strategies:
- The internal is now external—Organizational ecosystem employees/contractors/customers now have unfettered access to outside the ‘door.’ Constituent parties can use social media posts to comment about the good, bad, and ugly of an organization.
- The data on culture shows clear economic impact—Case studies on culture are no longer ‘fuzzy’ and the impact of culture on the bottom line can now be documented.
- People technology has advanced enough to help—Data and analytics enable organizations to develop a better understanding other their ‘workforce’ market constituency and develop strategies addressing their concerns and needs.
The article concludes that culture is no longer a buzzword and organizations can leverage it to drive organizational alignment and behavior towards shareholder value. Culture is now a measurable KPI.
Care to benchmark yours?
If one accepts the above premise, competitive value is created by the organization’s culture. This is not a new statement and has been addressed by this author in various forums for years.
Fundamentally, there are two types of cultural interactions:
- Collaborative—Two or more organizations seek to work together to realize joint value. For example, the organizational ecosystem, i.e., suppliers and long-term customers.
- Adversarial—Two or more organizations seek to realize value at the expense of others. Examples include competitors, government regulatory interactions, i.e., IRS or legal actions.
Even an internal team is a composite of several legacy (organizational) cultures not to mention diverse ethnicity and societal circumstances. It is this heterogeneous environment that the bottom line is ultimately impacted.
This author began investigating cross-cultural engagement value (or lack thereof) in the era of Culture eats strategy for breakfast. In any cross-cultural situation, the Relationship is the ultimate value developed, sustained or even lost.
The R B C model describes a set of interpersonal Behaviors based upon a set of Conditions. Behaviors are observable and describable (beware of observer bias) and Conditions can be equally known. The Relationship(s) between parties are latent (not directly observed) and must be inferred.[iii]
This inference is often the source of poor decision-making—the reason so many deals go ‘south.’ If the internal culture is now better defined, manageable and a bottom-line item, focus must be turned to intercultural engagements.
Even as your organizational culture is more knowable. Its relationship with other identifiable cultures is not. If that were true, there might be fewer issues among parties. One might even surmise; the divorce rate might be lower.
At all levels, culture is an evolving construct. Cigarette smoking is no longer publicly acceptable for many while marijuana consumption is. Fashions come and go as well.
Certainly ‘pop culture’ evolves rapidly. Perhaps slower, but so do societal and ultimately business cultures.
In this pundit’s opinion, successful inter-cultural engagements are the key to long term value—shared or otherwise. The more the organization knows Who and What it is, the better it will be able to develop a ‘relationship’ with counterparts who know Who and What they are.
Culture is the Food of Choice. How is Your Organization Watching its Weight?
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Critical Mass: Value from the RBC Framework
Nuclear physicists define the term, “critical mass” as the amount of fissile material whereby a nuclear reaction is self-sustaining. From that original definition, the construct is further developed along societal and political terms as a function of the environment and number of adopters and their interdependencies that create enough of a consensus for individual actions that sustains an undertaking.
In 1996, the author published the first of several case studies on a societal interaction model based on the Relationships, Behavior and Conditions (RBC) construct among economic actors. Previously the model was only in the domain of academia.
This blog addresses contemporary issues from the RBC perspective and whether in the present state they are sustainable or not. Many readers may be familiar with the “Innovation Adoption Curve.” RBC seeks to enlighten the causality of behaviors that cause movement towards the critical mass that generates movement along this diffusion curve.
- In Defense of Humans—Machines Are Not Ready Yet October 1, 2019
- Culture matters A Lot! Cultural Interactions matter MORE!! September 22, 2019
- Chain of Custody: Is Your Management System Ready? September 15, 2019
- Man—Machine: Extension or Versus? August 26, 2019
- Zero: What If Switching Costs are Near? August 25, 2019
Other Blogs Dr. Shemwell Authors
Dr. Shemwell is an author for the following 3rd party blogs.
Governing Energy Blog
BTOES Insights is the content portal for Business Transformation & Operational Excellence opinions, reports & news. Dr. Shemwell is a contributor.
Consult 2050 connects organizations with a wide range of consultants all around the world. The firm operates an online marketplace for consultancy services.
About the Author
Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector. He is the author of six books and has written extensively about the field of operations. Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling Operational Excellence and regulatory compliance management. He has studied cultural interactions for more than 30 years—his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of societal relationships.