If you want to incite a complex debate, begin a conversation on organizational culture. It exists, we all know that, and we are aware that it’s crucial in shaping behavior in organizations. But for many leaders, there’s something amorphous about the concept, which can make it difficult to change or improve. It’s essential to define culture so we can grasp how it connects to key elements of an organization, and how we can develop a better culture within an individual organization.
Here at Gallaher Edge, when we talk about organizational culture, we define it as an emergent property of human behaviors and beliefs. ‘Emergent property’ means that the behavior, or what is emerging from it, comes from the interactions of the different pieces and parts. Culture becomes not just about the pieces and parts themselves, but from the relationship between them. We’re all taught in grade school how to use reductionist methodologies to solve problems. We break things down into little, tiny pieces and then solve the pieces and add it all back up.
But that doesn’t work with an emergent system. Let’s demonstrate this using the example of sugar. If I tried to use reductionist methodologies to figure out what sugar tastes like, I would break it apart into hydrogen, oxygen, and carbon. And if I had some magical way to give you a little piece of each and said: “Here – taste some carbon, taste some hydrogen, taste some oxygen. Now, combine it in your head and tell me what sugar tastes like.” Do you think you could do it? Of course not!
Taste is an emergent property, so it is the interactions of the elements that matter, and not each of them on their own. In fact, if if you combine the same elements in a different way, you can make gasoline – which I’m pretty sure tastes different from sugar! When we look at culture as an emergent property, we’re not using reductionist methodologies. This is why leaders with the best intentions sometimes struggle to create the culture they want. Focusing on culture as an emergent property can give leaders the confidence to create their culture with intention.
Culture Transformation at IBM
One of the most famous examples is Lou Gerstner with IBM. He led a massive turnaround with IBM in the early ’90s. At that point, IBM’s stock price had dropped to under $13. Under Gerstner’s leadership, by 2002, the business had grown its market cap from $29 billion to $168 billion. That’s a growth of 579%! In order to do that, he had to figure out the right strategy to use to cut costs and realign systems and make the right moves in the marketplace. But Gerstner realized that wasn’t going to be enough because, in order for them to execute the strategy, they had to behave differently. He came to see that culture isn’t just one aspect of the game. It IS the game. And that is a powerful mindset shift.
Recognizing that culture is an emergent property and that culture isn’t just one component of the game; it is the game, can be the thing that really helps leaders understand the more tangible aspects that they can work on to truly impact their culture so that they can get those results, instead of just spinning their wheels.
To illustrate what emergence looks like within your organization, we always say: “Show us a meeting in any organization, and we can use that as a pretty accurate diagnostic tool for exactly how well things are working.” If you picture your most important meeting when your culture is just as you’d like to be, what are those behaviors that you see from people? How are those behaviors affecting each other? What about your own behaviors? What are you doing in this meeting, and how and what are you contributing to the way the culture is showing up and how it’s emerging? Even in that one little microcosm of a single meeting, we still have interactions creating that emergent property of the environment and the way that the meeting feels and runs, and how people show up and behave. It’s a powerful first step in designing a culture because a lot of leaders have an idea of how they want those meetings to go.
So, what IS Culture?
Now that we’ve shaped and illustrated how culture emerges, we’ll lay out the definition of culture that we use as a working model here at Gallaher Edge. We define organizational culture as the emergent property produced by the interactions of the behaviors and beliefs of the individual people. How the organization is designed – which includes its structure, how decisions are made, processes, policies, and systems – affects how people feel and behave. People form beliefs based on their experiences in the organization, and based on those beliefs, they behave in a particular way that ultimately produces the culture and results of the organization. At the organizational culture level, we focus on creating alignment between the processes, systems, and structure of the organization to ensure that the people of the organization can perform the operations required to execute the strategy while producing the desired culture.
At Gallaher Edge, we combine Industrial-Organizational Psychology with Industrial Engineering to study how the science of human behavior works to create organizational culture and how these behaviors are rooted in our own self-concept. This has enabled us to identify the missing links for creating and maintaining a truly effective culture. In upcoming blog posts, we will show you how culture starts with the individual and is created from the inside out and introduce you to the innate human drivers that support our model.
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