Culture beats capital — A short guide to working on corporate culture

What is corporate culture?

Corporate culture is the collectively accepted, traditional code of conduct. Through everyday actions and reactions, it conveys “what you and how to do and not do here.” This code has grown in the organization over the long term and continues to grow. It forms the basis for the decisions of the members of the organization as to whom they integrate as an additional member and who they exclude. Observable behavior That is why it also provides the strongest evidence of specific corporate cultures.

We need this or another suitable definition of corporate culture if we want to deal with it. Otherwise we'll talk past each other very easily.

Who and what shapes the culture?

The corporate culture grows over a long period of time. It is particularly influenced by individual people. In particular, managers and other key people have a strong influence on the culture because they have far-reaching organizational powers and communication rights or are exposed. They are role models for better and worse, they define processes and formulate rules and freedom. “Like the Lord, so's Gescherr,” is an old wisdom that still holds true and also applies to ladies, then only rhymes worse. The management system, the system of processes and rules, also shapes culture. As well as communication, established communication channels, formats and forms, have a cultural impact. The fact that the formal, the rules, the process and the organizational structure have such a strong effect on the growth of corporate culture may surprise some. We don't have the culture here and the structure there. Structure shapes culture, culture has an effect on those who structure it. It is also not possible to work directly on the culture. Culture can change when people leave or we replace them, when we change processes and rules, when we change communication. However, the result is unpredictable; in addition to hoped-for and intended effects, there may also be unwanted and unexpected effects.

So now we've already identified the levers for working on culture: people, management system, talking to each other.

Indians, women, chemists,... are like that?

Pigeonholing is often misleading; when it comes to corporate culture, it is completely unsuitable. Germans are more punctual than Indians! Are all Germans more punctual than all Indians? Women are more sensitive than men! All women...... all men? And is an Indian chemist more punctual than a German social scientist is sensitive? If cultural characteristics were approximately normally distributed, such as leadership behavior between the poles, egalitarian and hierarchical, then the distributions of different groups or nationalities may well overlap significantly, even if the mean values differ significantly. In an organization, concrete leadership also shapes the management culture, even if this differs significantly from the national culture. Corporate cultures can therefore certainly overlap and “overwrite” national and other subcultures.

If we avoid cultural stereotypes, then we can also more easily recognize what is really happening culturally in the company.

A culture? Dozens!

Let's take a closer look: A company, including ours, doesn't just have one culture. It has many cultures. Site cultures differ, including sector cultures, such as those in marketing and production. When there are larger groups of different professions in the company: engineers, lawyers, chemists, business economists, then their cultures also differ. Whereby — see above — please do not fall into stereotypes. And then there are also various topics that create sub-cultures, which in turn can develop subcultures: innovation culture, management culture and also a culture of quality and error.

Interim conclusion: Our company does not have one standard culture, it has many (sub) cultures. And that's a good thing!

Quality and fault cultures

Quality culture or error culture are subsets or facets of corporate culture. The complaint repeatedly heard by quality managers about a lack of quality awareness or a poor quality culture often ignores the essence of culture, but also obscures the real causes and effects. A poor quality culture is rarely the cause and better quality awareness is hardly the solution to quality problems. As already mentioned, the actual causes lie in people, processes and rules, and communication. We must search for false incentives, dysfunctionalities in the management system and conflicting objectives. That's where we need to start with improvements, not with the culture. And we need to find out which managers are repeatedly and systematically contaminating quality and undermining quality capacity through their specific decisions and behaviours.
One more thought about the legendary error culture. There is a misunderstanding here insofar as this, too, must be about very different things. The call for a good error culture often means that everyone is free and open about mistakes, their own and others', so that everyone learns together and does not repeat the same mistake. That would be a nice learning culture. However, there are activities and areas where there should be no mistakes at all. To speak of an error culture there would be irritating and misleading. This requires discipline, meticulousness, concentration, caution, prevention... We must clearly differentiate between areas of the company that should move forward creatively, innovatively and iteratively, and those that should minimize or even exclude error rates through prevention.

People in organizations have a good sense of quality and want to deliver quality rather than non-quality. If they don't, we shouldn't question their character, but our system.

Mission statements fade away, appeals fade

A significant part of cultural projects in companies are “mission statement projects” and result in strong appeals. “Written mission statements often only list what managers or employees miss the most.” * Hang the posters and publish the new mission statement on the Internet, please ask and observe carefully: What is different now? If the company has not replaced any people or changed processes and rules or communication, everything will almost necessarily remain the same, including and especially the culture. But often at an increased level of frustration, because the mission statement project has made you dream so well, has made you believe in a better world. Mission statements are useful when they get to the heart of what has been lived for a long time.

So beware of false solutions — working on culture is working on the management system.

Do what?

1. Recognize, know and understand your own cultures:
   Based on suitable definitions that represent the company's cultures. It helps not to do this in a judgmental (good/bad) way, but descriptively.

2. Identify and understand the reasons and motives for typical and collective action and omission:
   Find out which people, rules and communications are culturally influential, paying attention to incentive/reward and punishment systems as well as contradictory and dysfunctional rules and conflicting goals (good topics for internal audits!).

3. Getting culturally appropriate people into management and key positions and exchanging ideas with others:
   Perhaps the most difficult part from a human point of view. “Hire for Attitude and Train for Skills” is proven wisdom for recruiting.

4. Design a culturally suitable management system:
   Perhaps the most difficult part in terms of craftsmanship: designing and designing rules and communication in such a way that intentional effects arise and unwanted ones disappear. This is rarely done right away and requires iterations.

5. It is better to do nothing than to do something unsuitable for culture:
   Start cultural projects only when causes are understood, goals are clear and solutions are realistic — and then only interdisciplinarily and collectively. Pure text work on mission statements fizzles out without effect.

What are we taking with us? Corporate culture cannot simply be changed; it is the result of people, processes and rules! Pigeonholing and pseudo-solutions won't help — let's do it with real levers instead!

*Thank you, Jochen Muskalla, for this quip, I've never forgotten it in all these years.

‍