January, 2016

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Culture is not a Compilation of Individual People’s Values

Equating the culture of an enterprise with a compilation of individual people’s values may have some limited application to a sorority or a fraternity, but that’s it.  Anyone who tries to sell you on such an idea is selling you snake oil.

Culture has to do with creating conditions for your people to fully deliver on your enterprise’s customer promise.  It is driven by the nature of your business and what it takes for you to succeed in your marketplace.  It is all about implementation and identity.

A rowing team’s culture is formed by what this collection of people must actually do in order to succeed.  This is true for every non-profit and for-profit enterprise.  A compilation of each of the rower’s personal values is not what leads to success.  

Our research over the past 35 years tells us that there are sixteen major drivers of culture and that each set of these drivers is practiced differently in each of four fundamental kinds of enterprises. 

Additionally, the kind of culture (and leadership) that is best for you is determined by your customer promise. Singling out culture and focusing just on it is informative, but of next-to-no value.  Culture has to be addressed only in the context of your customer promise and your approach to leadership.  All three need to be worked with simultaneously.

Equating culture with complied individual values is simplistic and has considerable potential to do more harm than good. 

System-centric Leadership Development

After all these years, CEOs remain dismayed about the low impact of leadership development.  Boston Consulting Group claims that their research conducted in 2015 with 1,500 global executives demonstrates that businesses worldwide have wasted $40 billion in leadership development initiatives.

While likely overstated, BCG’s conclusion does illustrate an important issue about how we have all historically approached leadership development.  The majority of initiatives designed to develop leaders come unconsciously from an individual-centric mindset.  There is nothing inherently wrong with this approach.  Helping individual leaders develop their personal and interpersonal leadership approach has definite benefit.  But, it puts the cart before the horse. 

Understanding your enterprise as a system needs to come first.  There are four fundamentally different customer promises and each one requires its own unique culture and leadership approach.  Each of the four is a unique system that links customer promise, culture and leadership.  One size does not fit all.  Take empowerment as an example.  In many respects, empowerment is what leadership is all about.  But, it is practiced in four fundamentally different ways.  How it is practiced depends upon your unique customer promise and what is required to fully deliver on your promise.  Not only does one size not fit all, when it is misapplied, it makes things worse.

If you want your leadership development initiatives to work and ‘payoff’ for you, take the system-centric approach.        

Your customers are not "outside" your enterprise

In a recent Lexington Herald Leader newspaper article, a professional PR executive wrote an article titled “In the New Year, Small Business Should Focus on the Customer.”  This executive proposes that “…focusing on the customer is the top trend for 2016.” 

Focusing on one’s customers is not a “trend.”  Without customers, your enterprise does not exist.  The same is true for leaders and employees.  Every non-profit and for-profit enterprise is a living people system – comprised of customers, leaders, and employees.  All three are the three living elements to your enterprise.  They are inextricably connected to one another.  They are interdependent.  Each depends upon the others. 

When we treat them as if they were separate from one another or when we (unconsciously) mechanize and/or commoditize one or more of these three elements, we create distortions, misconceptions and contradictions.  The major distortion is that we start treating one another as objects.  We label our customers as “ratepayers” or “consumers.”  We call employees “laborers” or “jobholders.”  We call leaders “officers” or “controllers.”  We call people "human capital." Or, we view customer focus as a “trend.”       

At its essence, your enterprise is biological, not mechanical.