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THE HIDDEN DANGERS IN CORPORATE CULTURE

Is your company defensive or constructive? How your corporate culture may be stifling your company.

 

“Organizational culture is the primary obstructionist in your organization” - Lou Tice,Founder The Pacific Institute


One of the primary purposes of corporate culture is to maintain the system, to keep things just the way they are.

 

However, unless business always remains on the up-and-up, your culture can work against you by handcuffing the organization and keeping it from growing and developing. Many times, we as organizational leaders unwittingly build a defensive culture. But the good news is it’s never too late to start building a more constructive culture.

 

As humans we are very adaptable and perceptive. When we find ourselves in a new situation (as some would say, out of our comfort zone) our awareness heightens. We start to recognize how others are acting, and we adapt to model their behavior. Operating at this heightened awareness takes a lot of energy, so we start to take on the behaviors of those around us until we get back into a new comfort zone.

 

In organizations, the behaviors adopted are the behaviors that we perceive as being necessary to fit in— and in most cases to get ahead. These behaviors may or may not be what we would choose to do, but we do them nevertheless because they’re “the way things are done around here.” Every day in our organizations, we as leaders can see examples of how culture is a powerful force that drives behavior and performance even when it is contrary to our demands.

 

Two sides of culture

There are two types of culture – defensive and constructive. Constructive cultures reward proactive behaviors that foster innovation, performance, and personal responsibility and accountability. Defensive cultures, on the other hand, reward inactive or reactive behaviors that focus on maintaining the status quo. They blame others for creating problems because of an innate real desire to look good on the surface.

 

All organizations have some of each set of behaviors in their culture. But what differentiates companies is which set of behaviors is dominant. Research has shown that only about one-third of organizational cultures are primarily constructive, while the remaining two thirds are primarily defensive.

 

The tendency for organizations to be more defensive than constructive is just part of a natural path that organizations follow in their growth and development. Most organizations start out constructive (or with a lot of money). To survive they develop a product or service that establishes them with a dominant market position.

 

Over time their initial success leads to more success and they lose the urgency to create and develop new products to survive. They start to develop a sense of needing to “protect the core” and maintain this success. Management gets into a comfort zone, convinced by their success in the past that their brilliance will carry them forward.

 

Defensive deterioration

As more and more effort goes to protecting the current business, however, managers become
arrogant. They start to pay attention only to information that reinforces their view of their brilliance, and ignore and rationalize information that would suggest that their core business is deteriorating and that they need to reinvent themselves.

 

To prevent dissidence from occurring, the focus shifts internally, attempting to maximize profitability on the core product or service — oblivious to the realities of the market. The true performance of the organization continues to deteriorate until one day it is faced with a crisis and has no idea how it got there.

 

In fact, recent research has shown that the more defensive the culture of the organization, the more
volatile the financial performance (i.e. going through cycles of developing new products, protecting the core until it is gone, and then starting the whole process over again).

 

So if you have been frustrated trying to implement new initiatives, perhaps it isn’t the initiative that has been the problem, but that unseen obstructionist — culture. The companies that continually promote a more constructive culture do this through effective leadership – leadership that recognizes how important it is to keep the organization moving and shaking.

 

These constructive organizations are externally focused. They balance the concerns of all stakeholder groups, keep politics out, and ensure that communication flows freely. Their leaders do this by being future-focused – always anchoring decisions to a clear vision, strategy, and expectation. In other words, vision and values are not just posters in these organizations, but true operational tools.



 

Michael J. O’Brien
Director - Research & Application
The Pacific Institute


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