The Cultural Mind

#2, October 2022

A monthly newsletter bridging the gap between social science and mythology on corporate culture, leadership, and change.

 

5 minute read, with links to interesting stuff.

(above: stonework detail from the Alhambra, Cordoba, Spain)

In this issue:

How Leaders Lie to Themselves about Disruption

 

Echo Chamber of the Orthodox:

Big Consulting and Culture Change

 

Hockey, Honor, and Historicity

From the Department of They Said it Better:

 

Michael Putz and Scott Anthony have a compelling take on how leaders delude themselves about disruption -- especially relevant for industrials:

 

"Powerful deceptions hinder a leader’s ability to respond to disruptive threats and seize disruptive opportunities", they write. Here are four common ones:

 

LIE #1: Data Lags Disruptive Change. "It is easy to be in the middle of a disruptive storm and take comfort in data suggesting everything is fine... " This is because most of the data organizations use to make decisions about change is backward-looking. And most of the ways leaders make sense of that data is based on heuristics and cultural models built off what has worked before. Disruption ultimately involves disrupting paradigms -- one's core models about how the world works and what 'good' business really means.
 

LIE #2: Bold Innovation Carries Systemic Risks. "There is a perception (among incumbents) that it is safer to stay the course... A large European industrial was seeking to set a bold new direction and achieve ambitious performance targets...Despite consensus and a serious commitment among the leadership team...the outgoing and incoming board chairs decided — in the bathroom during a break — to significantly reduce the scope of the ambition, perceiving that leveraging digital technologies was too risky and not in the company’s short-and medium-term interests."

 

LIE #3: The Shareholder Value Excuse. "This deception shows up in various guises. It might be “The activists will pounce on me,” or “My shareholders won’t like it,” or “The market just cares about short-term results.” This type of lie — more like an excuse — leads to self-harm." To create value a company must generate a return on all its invested capital, including the cost of capital. Executives that do that are not fixated on short term stock performance but on building lasting value that ultimately yields a higher stock price.

 

LIE#4: We Lack the 'Right People'. "Leaders often use their own people as an excuse...It’s a convenient lie that puts the burden of inaction on others...(and) it's a popular perception that changing a company requires changing the staff... (which carries) an obvious risk of destroying a significant amount of institutional knowledge." It's perceived to be safer for boards and CEOs to hire so-called "known" quantities from outside, even though doing so calls out the obvious ineptitude of their own succession planning and talent management, and paradoxically transfers the risk associated with such hires to outsiders ('They were vetted by the headhunter').

 

(From MIT Sloan Management Review)

 

ALSO: All of these "lies" have cultural origins, detailed in

Why Digital is so Hard for Industrials

From the Debunking Department:

 

How big consulting forms opine on culture is always interesting.

Because most regurgitate and repackage what their clients are already doing, they are echo chambers of the orthodox.

 

Their main problem? The absence of new thinking.

(spoiler alert: reporting case studies from clients is not new thinking).

 

Consider McKinsey. Their recent article on culture transformation has some good nuggets (namely: one size does not fit all). But their notion of what constitutes "established" levers for culture change -- role modeling, conviction, reinforcement, and skill building -- might sound reasonable but shows how far behind McKinsey (and other big consulting firms) actually are when it comes to new thinking on culture and change.

 

There are two main issues. Start with role modeling.

 

Role models are influential in many domains, including ethical decision making [1], entrepreneurship [2], and career choice, especially for women [3] (among others). But as levers for culture change, the evidence is weak. There are reasons for this having to do with the nature of culture. Additionally, for role models to be agents of change, role 'aspirants' (those aspiring to be like the role model) need to

 

...have the same goals as role models, and the same motives for attaining them

...perceive themselves to be part of the same group

...perceive similarities between themselves and the role model

...perceive role models as highly successful, attractive and competent

 

In other words, rather obviously, the role of role models in change is entirely dependent on role aspirants.[4] Which makes role modeling as a lever quite problematic. Wouldn't aspirants already be on board with any change promulgated by their own role models? And what does this say about all the other people in the organization who don't share the same role models?

 

This concept of role models is an example of the many oversimplified notions of leadership popularized by the media and consultants (who need leaders to hire them). If leaders simply behave in the 'right' (read role-modely') way, change will magically happen. This is lazy pseudo-science. It takes a half-truth -- that leaders matter in change -- and reduces it to synecdoche: leaders just need to walk the talk...

 

It might sound like common sense, but in matters of culture it's a lot more complicated. Why? Because people and groups are a lot more complicated.

 

Which brings us to the second and more salient issue. McKinsey's "established"recipe is actually based on mid 20th century behaviorist notions of culture change. [5] The core assumption is:

 

Culture = behavior

Therefore to change culture you change behavior.

 

Sounds reasonable -- until you realize what we now know about the brain and culture from cultural neuroscience and related fields renders behaviorist ideas of culture and change mostly obsolete.

 

Modern work shows that culture is not behavior but knowledge -- taken-for-granted beliefs and tacit assumptions about how to operate in a given domain. Behavior may relate to cultural knowledge, or, might be wholly independent of it, or, might be compensation for it (e.g. overly "nice" behavior as compensation for a cultural fear of conflict). People don't always behave according to cultural rules or values; behavior is far more idiosyncratic and context-dependent. And to exclusively focus on behavior in culture change one might be treating symptoms rather than disease.

 

To reduce culture to behavior is to radically oversimplify one of the most complex constructs of human experience. Which possibly explains why over 80% of managed culture change programs fail.[6]

 

So, what is the alternative? Two key points (and see below):

 

  1. Cultural knowledge in organizations is embedded in practices -- everyday habits, routines and processes -- because this is where the most important knowledge about how to succeed as an enterprise resides. Think strategic planning, budgeting, go-to-market, product development, management control, and on. These are not just behaviors but formal and informal ways of getting things done that involve the complex interplay of people, processes, and tools. This is where culture resides, in these and similar practices.

  2. To change culture is to change practices. Why? Because practices are what oblige people to do quotidian things in different ways. This is no different than changing something personal and deep-seated -- weaning oneself of sugar or smoking, for example. Until daily habits change, little else can change. [6]

     

Today we have at our disposal more up-to-date approaches to culture and change backed by ample evidence that recognizes the influence of context (task, profession, history, local ecologies, etc.) and how preconscious and harder to access cultural knowledge actually is.

 

That more business leaders aren't aware of this is a colossal failure of business schools, business media, and, yes, consultants. Ah, you say, but isn't it easier to sell leaders on behavior change than to talk to them about their own core assumptions and tacit beliefs? Sigh. True. Invoking the famous phrase from the Watergate era in the U.S., this is why consultants "follow the money."

 

1. e.g. Brown & Treviño (2014)

2 e.g. Bosma, Hessels, Schutjens, Van Praag, & Verheul, I. (2012)

3 e.g. Stout, Dasgupta, Hunsinger, & McManus (2011)

4 See Morgenroth, Ryan, & Peters, (2015)

5 See Cameron & Green (2004)

6 Smith, (2002)

7 White (2021); or Kronenfeld (2018)

 

People come and go but cultures stay the same. Why? Because cultures embed in organizational practices.

(above: Bob Reynolds)

 

From the Department of Epistemology:

 

Speaking of practices, who knows more about practice than a jazz musician?

 

Watch Bob Reynolds (Snarky Puppy, many others) talk about the "danger zone" -- all the clever ways we keep ourselves from change, cultural and otherwise.

 

____________________

 

And because its now hockey season:

 

  • Cultural knowledge, as dominant cultural models and logics, tends to have long legacies, or what is called historicity.

     

    Pascual Restrepo from MIT and now Boston University provides an intriguing case of historicity in his study of the settlement of the Canadian prairies. Communities that in the late 1880s were located 100 kilometers or more from former Royal Canadian Mounted Police forts and removed from the Mounties’ reach had unusually high adult male death rates.

     

    The effects of this legacy remain: these same communities over a century later – in 2014 – had 45 percent more homicides and 55 percent more violent crimes per capita than communities located closer to former forts. Those living in previously more lawless areas are more likely to hold conservative political views. Even hockey players born in areas outside the historical reach of the Mounties are penalized for their violent behavior more often than those who are not.

     

    These differences may be explained by a culture of honor which has persisted to this day. This culture emerged in settlements farther from Mountie forts as an adaptation to the lack of a central authority during the settlement period. The practice of honor in these communities may have been fueled by tacit cultural logics that hold violent retribution rather than the rule of law as legitimate redress for offense, and these logics, embedded in norms and practices, have been resident for generations.

 

Habits are like rivers. Hard to change their course without intention, and the practice daily of moving some earth bit by bit towards a new berm.

- Paraphrase from an unknown tennis coach

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