Culture, Change, and Org Forms

Session 5: Culture, Change, and Org Forms

Intro:

In order to be an effective leader, you need to understand how organizations function. There's a couple of things that we're going to cover in this session that are going to help you understand and help you diagnose what's going on in your particular organization.

In this session, we're going to talk a little bit about the organization itself—how do you understand the culture, what are the various aspects of organizational change that you need to understand, and how do you configure your organization to effectively meet challenges out in the environment?

Those are the three things we're going to cover: culture, change, and organizational forms.

Episode 1

Let's talk about organizational culture. So, organizational culture is often difficult to discern because there are a lot of different things going on when we talk about an organization's culture.

Part of the challenge of understanding an organization's culture is that culture exists on three different levels within the organization.

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The first level is obvious, it's what we call "artifacts." When we think about an organization's artifacts, we think about things that are observable, things that are tangible—things like, how do people dress, what does the office look like, how do people interact, what kind of language do they use?

We think about things that are observable, things that are tangible.

So, even though these are very visible signs of the culture, they don't tell us a whole lot about what is really going on within the organization. It's a very surface way of understanding what an organization is, by looking at the artifacts.

To really get a better sense of what is going on in an organization, we need to look at what their espoused values are. When we talk about espoused values we're really looking at, what are the things they say are important to them?

What are the things they say are important to them?

Most organizations in the business world are going to talk about things like growth and profits and efficiency. If you go to the not-for-profit world, organizations are going to espouse values of helping others, improving the environment, finding ways to increase social activism.

You can begin to see that different kinds of organizations espouse very different sets of values. This is a representation of organizational culture.

So, we've got these two levels now. We've got artifacts, which are very visible; we've got espoused values, which are a little bit more visible, a little bit easier to understand. And they get a little bit closer to understanding what the organization's culture is.

But to really understand what an organization is about—to really understand what it's trying to accomplish—you have to dig a bit deeper. You need to look at the underlying assumptions of the organization.

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You have to dig a bit deeper.

When we talk about underlying assumptions, we're talking about things that aren't necessarily visible to individuals. Many times, these underlying values aren't understood by the organizational leaders or the members of the organization.

To understand the underlying assumptions, you really need to dig deep; you need to ask a lot of questions; you need to get deep down into understanding what the organization really believes and really values.

One way to think about organizational culture is as an iceberg. If you think about an iceberg, there's a part that's visible. If you really want to understand the organization, you need to look below the water, at the bottom part of the iceberg that’s hidden from view.

One way to think about organizational culture is that it exists on two different levels: there's a visible organization and a hidden organization.

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These are always the first things that we notice about an organization.

In the hidden organization, we need to understand things like power—how are decisions actually made? Who has influence within the organization? What are the interpersonal relationships amongst people in the organization?

What are the norms on the team—what's considered acceptable behavior and what's not? Who do people trust? What are the perceived risks in the organization? What's the level of psychological safety or freedom to express yourself?

Finally—and I think most importantly—how do emotions play a part in how the organization functions? What are the perceptions people use or the biases they have when they make decisions?

How do emotions play a part in how the organization functions?

In order to be an effective leader, you need to go beyond the visible organization aspects and get down and understand what's hidden within the organization's culture. One of the things to think about when we talk about organizational culture is that organizational culture is different than national culture.

In an organization's culture, we're talking about the assumptions, the values, the artifacts of the organization. When we talk about national culture, we're talking about shared values amongst different groups. Those groups might be ethnic groups; they might be national groups; they might be divided along country lines.

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One of the most comprehensive studies done on national cultures was done by a man named Geert Hofstede. Hofstede looked at different cultures across the world, and he looked at them across multiple different dimensions.

One of the most important dimensions was what he called "power distance": how much difference is there between the lowest member of the culture and the highest member of the culture, and how do those individuals interact.

The United States, for example, is a country that has a fairly low power distance. Those at the top and those at the bottom of the organization often interact. They might dress the same. You might find a CEO that actually has lunch with entry-level employees.

The United States is a country that has a fairly low power distance.

Other countries, like Japan and China, there's a much bigger power distance. It's unlikely that you would see the CEO of a major Chinese company actually sitting down and having lunch with lower-level employees.

A second dimension that Hofstede talked about was individualism versus collectivism. Individualism means, how much was the individual effort valued versus the collective value? It's interesting that in a lot of the Scandinavian countries, teamwork is more highly valued than individualism.