What Does Organizational Culture Mean?

Maintain a happy marriage. Live a healthy lifestyle. Surround yourself with good people. While every magazine headline and self-help book is throwing this advice at you, it’s just about as murky as telling companies to create a positive organizational culture. But just what does organizational culture actually mean?

In order to get a better handle on the specifics of organizational culture, I talked to John Childress, an executive advisor, keynote speaker, CEO, and board leader, whose latest book, “Culture Rules!: The 10 Core Principles of Corporate Culture and how to use them to create greater business success”, delves deeply into corporate culture, and why it is so important.

John bridged the gap from organizational culture as an abstract concept to a bottom-line issue by noting that,  “…organizational issues….turn into people issues that then turn into business problems.”

How valuable can culture be to a company?

John Childress: I got a call in 1980 from the president of Three Mile Island which was the nuclear plant that had an accident about a year before and he says, “John, we got a culture problem.  We really need to create a safety culture.”  So, I went out there with a small team and we spent about 6 months looking at the organization and it suddenly dawned on me that the whole accident was not a technological problem but a people problem. They had huge functional silos/departments that really didn’t share information.  They had an arrogance about the technology because it was brand new and there are redundant backups and so they really didn’t need a lot of training or exercises and so the whole culture was just an accident waiting to happen, and if you read the residential report on the accident at that time it states very clearly that their corporate culture was a risk and that risk helped create the accident.

The Three Mile Island lesson dovetailed nicely into one of the 10 Core Principles John mentions in his book, which is: Organizations work on human logic not business logic. He unpacked that by saying:

You can draw an organizational chart and you’ve got a leader, people reporting to that leader, and people reporting on down and yet if you draw what is called a social impact or a social network chart, you’ll find that somewhere down in that organization there is a key individual who is most respected by the whole team and that’s the key influencer and that person in many ways creates a subculture and often the leaders of the organization have no idea what those subcultures are.

John’s making a brilliant point we’ve all seen in corporate life, whether from the inside or out: social impact belongs to key influencers in the organization. They are not necessarily the top leaders. And that subculture may or may not advance the overall mission.

What’s even more powerful – positive or negative – is that when someone new comes into the organization, they will seek to fit in. They want to be part of the team. If there’s a cultural leader with a set of rules, the new recruit is quickly going to become acculturated to that set of rules even though the C-suite may have a very different vision and set of values.

John’s realistic about these subcultures commenting “what goes on in these subcultures is really how the company runs.  The key is to know where they are and get those leaders aligned so they’re going in the same direction.”

One of the reasons renegade subcultures are so important to reign in is another one of John’s 10 Core Principles:  You get the culture you ignore, which John described as:

There are so many times that a small group of employees are sitting around bad mouthing some other department and the VP walks by and hears it. That’s not the kind of culture that they want but he or she keeps right on walking by because it’s not my department.  And if you don’t step in, that is a tacit assumption on people’s part that it’s okay, and so you tend to build cultures.  You get the culture you ignore.

 So who is ultimately responsible for an organization’s culture? That is answered by another of John’s 10 Core Principles, namely: Organizations are shadows of their leaders.

Explaining the significance of the principle, John relayed, “If there’s a dysfunction of leadership culture at the top that’s going to cascade down.  It does more than cascade in my opinion.  It multiplies as it goes downwards.” Once there is a breakdown in communication each subcultural talisman gets to rebrand the company’s principles in their own manner, which can have deleterious effects that can snarl not just culture, but also the trajectory and health of a company.

As John Childress and anyone who has ever left a company (or lost a valuable employee) for cultural reasons can attest, a company’s culture can spiral out of control and implode a company when it’s not properly fostered. But wielded in the hands of a committed team and leadership, culture is your best weapon for world domination.