Culture is a company’s greatest cheat code. So why do so many leaders struggle to crack it?

Hi there! My name is Marcus Collins, DBA, and I study culture and its influence and impact on human behavior at the Ross School of Business at the University of Michigan. Each week, this column will explore the inner workings of organizational culture and the mechanisms that make it tick. Every entry will be accompanied by an episode from my podcast, From the Culture, that digs deeper into the culture of work from my conversations with the organizational leaders that make it all happen. If culture eats strategy for breakfast, then this is the most important conversation in business that you are not having. Sign up for the newsletter to make sure you don’t miss a beat.

___________________________________

Culture eats strategy for breakfast. We’ve all heard this misattributed Peter Drucker quote and instinctively understand the disproportionate influence culture can have on an organization’s business. However, if you asked five people to define organizational culture, you’d likely get 55 different answers.

Chief among them would be something along the lines of “organizational culture is how we do things around here,” the behaviors and norms that make up how a company engages in the collective production of work.

Sounds about right, right? Sure. However, a century’s worth of literature on the matter would say otherwise.

A social operating system

According to Émile Durkheim, one of the founding fathers of sociology, culture is a system of conventions and expectations that demarcate who we are and govern what people like us do. It’s a social operating system by which we collectively see the world and, subsequently, behave in it . . . together. What we wear, how we talk, what we do—they’re all byproducts of our cultural subscription.

The same goes for organizational culture, the shared operating system for an organization that helps employees collectively see, so that they might collectively do. Therefore, reducing our concept of organizational culture to merely “what we do around here” ignores half of what makes culture . . . well . . . culture. It’s this half, the way the organization sees the world and makes meaning of it, that dictates what we do.

Take Airbnb, for example. The company sees the world as a place where everyone belongs, so its behaviors are demonstrative of this perspective. That’s why Airbnb adheres to a “No Meetings Wednesday” tradition to accommodate team members who tend to be more introverted, so everyone belongs. They practice radical acts of transparency so that information is available to everyone, not just those “in the know.” They also provide employees with an annual $2K travel credit to encourage people to go out and experience the world the way other people do.

For everyone at Airbnb to feel like they belong, it’s important that employees see themselves as a part of a global community, not just as coworkers. World travel helps this endeavor by fostering the kind of empathy that drives connection. These ways of “doing things around here” at Airbnb are byproducts of how the organization “sees around here.” Together, the seeing and the doing constitute the organization’s culture.    

Culture isn’t just values

Of course, there are those of us who understand this distinction. However, far too often we mistake the organization’s perspective for its values; but the two are not analogues. Values are what an organization deems to be important. The way the organization sees the world, on the other hand, defines the truths that the organization holds about the world and why certain things have any importance in the first place.

For instance, Patagonia believes in “climbing clean.” The company envisions a world with minimal human invasiveness on the planet and, therefore, it values environmentalism and integrity, which, ultimately, inform its ways of working. Its values—which the organization deems important—are informed by its perspective.

Values alone are hollow without the deeply held truths of the organization’s perspective that undergirds them. It’s no wonder that research from the MIT Sloan Management Review’s 2020 Glassdoor Culture 500 study found no correlation between a company’s stated values and the lived experiences of its employees. Culture is not a company’s values; it’s the system upon which these values are constructed. So, without a clear perspective of the world, an organization’s values are typically meaningless and have no impact on its behaviors. They’re merely pretty words beautifully stated but rarely integrated.

This is a significant challenge for business leaders who have reduced organizational culture to a set of rituals, rules, and words. Culture is so much more than these components, but since so many of us have defined culture so narrowly, we have not yet fully realized its impact. Culture, as Durkheim asserts, is an operating system, and this system is the most influential external force on human behavior that we aren’t fully leveraging. Not because of a lack of skill, intelligence, or technology, but because of a lack of understanding. 

That’s why this column exists—to examine the whys and hows of organizational culture so that we might get better at it. It’s also why I created a podcast—in a world where there are probably too many podcasts, quite frankly.

Culture is an organization’s biggest cheat code, but the only way to use it properly is to understand it deeply. So that’s what we’re here to do . . . together. And this is our first unlock, with many more to follow. If we want to get better at the way we do organizational culture, it starts with getting better at the way we see it.