A conversation between James Paterson and Ralph Lewis – March 2016

James: Thanks for agreeing to be interviewed Ralph. Can we start by talking about the idea of a healthy culture and less healthy culture and how we might measure this?

Ralph: Let me start of by saying that there’s an awful lot of stuff said about culture that needs to be understood in a broader context. So what we mean by culture, and a good culture, will often be put it in the context of the society you are in, as different societies have different cultural preferences.

In addition, there is often a link between the personality of senior leaders and the attributes they look for in a company culture. However, 1) I am not sure they understand in depth what culture means, and 2) I am not sure they understand what sort of organisational culture is actually going to be helpful to performance in a sense broader than pure financial results. Put another way, the people in power in an organisation often want to promote a culture that suits them for personal reasons, and I don’t mean in any corrupt way, but often they seek something that they are comfortable with.

An example of this would be the growth in the use of matrix management, which has become very popular. It seems to me that this reflects the mind-set of entrepreneurs or marketing managers, who might enjoy working in this way and imagine it should apply across the organisation, rather than the mind-set you might see from someone from a manufacturing or finance background, where control and order, and strong functional reporting lines are seen to be important.

What things should we look for in a company culture, or in individual behaviours, that might lead to better performance?

This is a key question and a good answer starts by recognising that this depends on what is our definition of good performance is. I don’t want to be too pedantic here, but its important to recognise that different cultures will have different views concerning what constitutes good performance.

One mind-set is that it’s about the generation of wealth, common in many cultures such as the UK and the US. But there are other ways to define performance, including a view that performance concerns the wider contribution to society. After all organisations often exist because they provide a service to society and the customers in that society. If society says it wants sustainability and we don’t want global warming, then carbon emissions will be important performance measure we will have to look at.

Other dimensions of performance could include efficiency or the quality when delivering goods and services, and others could include how well they take care of their employees. These are all absolutely valid measures, depending on the organisation and the cultural values in operation.

Lets consider cultural changes in football clubs. I can recall a time when the culture of many clubs was like a big family; the football teams largely existed for the benefit of the supporters. Now of course that’s totally changed, top teams often view their performance in terms of the money that make for their shareholders but that’s not really that congruent with the needs of their supporters, who feel that tickets are no longer affordable. So here we can see a culture that values one set of performance measures (such as sales turnover) may lead to a blind spot in relation to other ways of looking at performance. In contrast if you have a culture of relationships, of caring, of meeting people’s needs, then you are far more likely to have performance measures that are high in customer satisfaction, even if that is at the expense of slightly higher profitability in the short-term.

Let me pursue some of your points further if I may.

I think the one dominant paradigm that I see is that performance is often viewed in terms of meeting a set of financial expectations, plus a set of corporate social responsibility (CSR) indicators. The idea is to tell ourselves that we’re not simply here for the money; we are here to be a good company as well (hence the CSR measures).

However, if you were in the company most of the conversations would in fact be dominated by short-term financial performance measures, with some conversations about corporate social responsibility and customer satisfaction etc.

Do you think there is something in this? Can you explore this further?

I think you’ve summed it up really nicely, because if you have a culture that is not just financially based, you wouldn’t necessarily worry about CSR or other measures because that would be an absolute given.

To take an example, in my assessment there is a cultural pendulum swinging within the UK National Health Service over the past two decades. 20 years ago there was probably less of a concern about finances, but since then there has been a strong focus on cost management and meeting other metrics, leading to a culture of “meeting the targets” at the expense of real patient care, as we have seen with numerous patient care lapses over the past years.

More recently I’ve heard stories of the NHS wanting to teach, “caring leadership” to managers, suggesting that the past focus on metrics has wiped out certain cultural traits that would have been just natural in times gone by. And yet I am sure that during the process of making these changes in the NHS the leaders at the time will have collected metrics that persuaded them they were not losing anything – either in terms of patient care, or the culture. So you can see that strategic priorities can create blind spots. These are often played down until they become impossible to ignore; at which point quite a bit of damage will have already been done.

I think the mind-set you are describing can be summed up with the idea that if we measure something it is real. It  starts with looking at the financial results, but is being extended include other metrics, such as CSR or culture. 

Do you think there is a desire to try to reduce culture to a set of numbers? To somehow pin it down and contain it?

Yes I do, absolutely, and the key issue is (and this goes back to my opening point) that people often don’t fully understand culture, they come at it from their own mind set, as we all do of course, but then there’s a necessity to step outside that.

One way of doing this is to look at things from the perspective of social anthropology. Remember that organisational cultures often sit within national cultures. Recently I have been working in Uganda which is very much a relationship culture, systems are pretty bad, but performance is normally thought of in terms of relationships. So when you work with people from the UK and they go to Uganda, its very hard for them to shift their mind set (their cultural norms if you will) and see that relationships are just as valid a form of performance as efficient systems.

But let me give you another example that highlights the difference in mind-sets that can exist even within the UK. I worked with a CEO who is from a financial background, and he hired and fired a marketing director within 6 weeks, so I never got to meet the marketing director. However, in a coaching session with the CEO we had the following conversation:

“Why did you fire him?”

“Well, he wasn’t doing any work”

 “OK, what do you mean?”

“Well he wasn’t spending the right amount of time looking into next years sales and marketing budgets”

“OK, so what was he doing?”

“Well he was taking clients out to lunch and talking to them”.

I burst into laughter, much to the surprise of the CEO, but as we explored this further he realised that he wasn’t properly recognising that talking to people and finding out what they thought was just as much work as sitting down to work on a budget spread sheet.

This is fundamental to understand about culture. It’s linked to national paradigms, our professional training and the values we has as people and is very easy to miss, even though it is right under our noses.

Great example Ralph. When I coach others I am often encouraging them to see that “taking time to think about what is going on” and “thinking about the best way to approach things” is actually real work and really important work. This is often in contrast to a culture that might value “being busy” over “thinking things through.”

Now can we return to the measurement of culture and the role of culture surveys to help organisations diagnose their culture?

Yes. And we should accept that working on culture is normally a good thing, and some measurement framework is often needed. However, the critical issues I often see centre around what organisations do with culture survey results when they have got them. And sadly that’s where I think we are entitled to be cynical. A cultural survey may provide pointers that the organisation is very task focussed. However, even if this was recognised, it’s not so straightforward to become more people focussed, or customer focussed. Often culture change often requires new behaviours from senior leadership, but this can be hard for them since their mind-sets may not have changed. This results in the common problem of leaders saying “We want change” but actually being less willing to change themselves.

Which will create a degree of scepticism in the culture and may lead to reluctance to change!

Returning to culture surveys, I recall a culture survey I once saw which asked: “Do you think decision making in this organisation is too quick or too slow?” I think the question was motivated by a belief that decision-making was too slow. However, my reflection was that sometimes organisations makes incredibly slow decisions (perhaps when there’s lots of data to collect) and then at other times organisations makes decisions very quickly (perhaps where there is a strategic decision that needs to be made a short notice by a few senior people).

So my reflection is that even how you ask questions can be loaded, and you have to be mindful of that. However, let’s consider some of the constructive uses to which a cultural survey can be put.

I think it’s a good idea to get people to talk about culture and behaviour, but a key element is to get them to consider their own behaviours. Take the issue of diversity. There are some organisations that like to run a lot of diversity workshops, and we know that diversity in organisations is a good thing. But the key thing is that you need a change in behaviours in order to deliver cultural change – and that’s the bit that is very difficult to do because it involves shifting mind-sets and changing behavioural patterns that may well be entrenched.

I’ve seen this with intellectually very able people who understand potential cultural issues from a logical point of view, but remain somewhat detached from them.

As a first glance a potential issue from a survey may be downplayed by arguing that perhaps people did not understand the question or by saying that there is not enough hard evidence to prove the concern is a serious problem. All of which will create a distrust in the value of carrying out the survey.

And even when an issue is accepted, I have seen managers thinking that if they send out an email and let everyone know the problem, with instructions around what needs to change, then the change will happen – but of course this is not the case.

So although we have culture surveys as potentially an instrument for change, they run the risk – paradoxically – of being an instrument of reinforcing the culture; that it’s all about measurement, it’s not about relationships, it’s about analysis, it’s about rationality, when this might be precisely a cultural area that needs to be removed.

That’s really nicely put and I totally agree with that.

One of the things that worries me about culture surveys is that people get a sense that because the cultural survey says we’re OK on cultural facet X, that somehow people won’t behave differently due to specific contextual or more localised pressures. The most extreme version of this might be when somebody chooses to commit a fraud, against a broadly ethical culture.

However, I’m not sure that fraud is the biggest problem in this regard. Lets consider a collaboration between 2 business executives who want to make a proposal that they have joint interests in – and they want to make it look slightly better than it really is, so the project can get resources. You would probably never see behaviour of overplaying benefits and downplaying risks being picked up on a cultural survey, yet potentially quite material in their impact.

Do you have any examples like this you can think of?

Well if we go back to diversity again, it’s the little sexist jokes, things like that, all the little aspects, which are really very difficult to deal with because when it is noticed people say you are making a fuss over nothing, but actually they all add up to a culture of casual sexism. Whilst it may be a one off behaviour at one point in time, we might find that the behaviours repeat and as a consequence create a culture in which poor behaviour around sexism or whatever is tolerated.

The key message I am getting is that individual behaviours are often regarded as an unimportant “noise” that don’t really equate to anything, but in fact they do create a cultural backdrop that may send a signal that diversity is something we want but does not need to be actively worked at.

Absolutely, and that’s a really good example, and that is why something as simple as simply walking into a reception area and seeing how you are greeted, can tell almost as much as anything from a cultural survey.

This takes us back to where we started: the real culture is about happens in terms of day to day behaviours and some of these things could easily get missed in a culture survey.

Lets pursue this further – if you look at a culture survey and find a key attribute is rated 4.3 out of 5, whilst the average rating is, say, 4.1/5 it could be easy to conclude your culture is fine. However, the deeper question to ask is whether 4.3 is really OK, or whether, for the business strategy you are pursuing and values you are trying to up-hold, you would really want to be stronger – 4.5 or 4.7.

Absolutely, and furthermore if you present your employees with a cultural survey that says overall we score 4.3/5, there will be some employees who go “yes that makes sense”, but there may also be a number (even if they are in a minority) that hear the results and think “that’s not right”, since based on their recent experiences there are managers who do less good things, that hasn’t been picked up in the survey. So some staff might believe there is an important issue to be addressed, but are being told (because of the overall survey results) that things are fine.

So what you are saying is that if you are not really careful the results of a culture survey can – ironically – create a culture of distrust between staff and managers, since there can easily be a disconnect between the day to day experiences of staff in specific areas and the overall, official, results of the culture survey.

Absolutely; in fact you can get two things: 1) a dissonance or devaluation of personal experiences that people have and what is officially regarded as a strength or weakness and 2) a complacency that the only behavioural or cultural issues to worry about are the ones that come out through the survey results.

Arguably it’s a mind-set that says that survey results somehow matter more than personal perspectives.  Here you have a mind-set that is trying to “capture” the definition of culture and is trying to tell employees what the facts are; effectively “the survey is more important than your experience.”

Yes and you can see this happening all the time in many organisations. We hear: “this is our strategy, these are our values and this is the culture we want” but then it is often not lived on a day-to-day basis, creating a loss of credibility. However, as a caveat to this analysis; let’s not think the senior leaders should always be blamed for this, because I think the list of competencies for leaders are ridiculously high. I think we often expect them to be everything to everyone. I think the starting point to accept that leaders are, in fact humans, not super-humans, they are great at certain things, but they’re lousy at other things. So lets accept that level of competence and allow them to focus on their strengths and then to be open to the possibility that they need help in other areas. This is about being open to talking about the less good aspects of culture and behaviour, of the lived experience of what people encounter, and not the averaged results of some survey.

Culture is something that needs to be observed in specific terms and talked about and then worked on as a co-operative effort.

Great insights Ralph. They highlight to me that a healthy culture needs to be open to dealing with issues in real time and not thinking that people should “save up their grumbles” for the culture survey, thinking that is the way to effect cultural change.

Absolutely and it highlights how difficult it is to be able to deal with issues on a one-to-one basis in real time. This is why managers have delegated many of these “soft topics” to HR managers, rather than dealing with them themselves.

Ralph. It’s been a huge pleasure talking to you – thanks for sharing your insights.

For further information please contact: www.ralphlewis.co.uk or www.riskai.co.uk