Brunswick Review Issue 13

Culture clash

It stands to reason that a company wouldn’t want warring subcultures within its walls. Doesn’t it?

Actually, Michael Tushman thinks that conflicting subcultures can strengthen a company’s overall culture. Tushman, a professor at Harvard Business School, is the developer along with David Nadler of the Congruence Model, which 40 years after its creation remains crucial to our understanding of organizational performance.

A key tenet of the model is that culture can amplify or diminish a company’s performance. In a recent interview with the Brunswick Review, Tushman argues that there are no “right” or “wrong” cultures. But neither is culture something that can be left to develop without effort. It requires time, attention and resources. If nurtured properly, in alignment with a company’s identity and strategy, it can enhance profits. A powerful culture can also make it easier to recruit, retain and most importantly develop talent.

“Strong-culture organizations consistently outperform weak-culture organizations, or cultures that are diffused. In a strong-culture organization, you can employ regular people and they will do extraordinary things. They are on fire, rooted in the culture,” Tushman says. 

We asked Tushman: can you teach an old dog new tricks? While it’s not easy, Tushman believes that any company can change its culture rapidly by having a compelling overarching identity and core values that the leadership team personally buys into.

For older, more established companies, culture can typically be improved by frequent leadership changes. Stagnant leadership can result in the same leaders determining what is measured and when they are measured, hiring practices and relentless communications of the rearticulating of the business strategy.

THE CULTURE CHECK LIST

To build a strong culture and capture its benefits, Tushman believes that leaders should keep in mind a few key elements.

  1. Align strategy and culture: It’s important to articulate an identity and preferred culture, and then not just say it, but to actually build an organization with systems, processes, training and metrics designed to reinforce that exact culture.

  2. Values and norms set the tone from the top: A company should have a set of core values and desired norms that underpin the culture.

  3. Build a narrative and communicate it: The primary lever both in reinforcing a strong culture and changing a weak culture is the senior team’s narrative and communication both within the firm and with external constituencies. Therefore, develop a narrative and communications strategy to convey and implant the culture.

  4. Communicate authentically: Authenticity and consistency of message are critical to an effective narrative, as is the corresponding behavior of leadership. The worst situation for an employee or a shareholder is when you hear the senior team talk in a certain way but they don’t behave consistently with the way they talk

  5. Be consistent and gain support: All members of the leadership team must harmonize their communications. The key is to have a leadership team that is aligned, signaling where the organization is going and hiring, training and rewarding people to live within that specific culture. Managers must not only reward people who get on board, but also sanction those who don’t comply or support the culture.

  6. Be flexible and not rigid: In creating a culture, however, leaders should not insist on uniformity, and should actually allow multiple cultures to grow organically – known as ambidexterity. Companies should strive toward multiple sub-cultures that are contrasting with each other which can provide options and increase resiliency. Inconsistent cultures within an organization can be helpful as long as they fit under an overarching identity and a few overarching core values.

  7. Encourage open dialogue and eradicate politicking: Internal politicking with respect to innovation and change will destroy an organization. One of the roots to dynamic capability at the firm level is having a team that can openly differ with each other and talk about it until a decision is made.

 

Ash Spiegelberg, a Partner based in Dallas, and Will Rasmussen, a Director based in New York, spoke with Michael Tushman. Spiegelberg was taught by Professor Tushman while attending Harvard Business School.