Culture: The Personality of a Company

Discovering the company's personality is the first step in making it better.

Remember Digital Equipment Corporation? They helped create the computer industry. Success led to growth. Unfortunately, their new size was a poor fit with the original culture that had fashioned their accomplishments. Company leaders tried to make changes in the culture. They never took. Compaq absorbed DEC. The business graveyard is littered with companies unable to change their culture when needed.

The average age of Fortune 500 companies is 30-40 years. (Enron’s experience may lower that number.) Premature company death happens because many leaders, experts in their business, don’t understand what company culture is and therefore fail in their attempts to change it. The next 900 words may help you save your company.

Analogy: You notice someone’s personality by their behavior patterns, i.e., how they greet people, their warmth (or its absence), the kinds of things that sustain their interest, and, in general, how they organize their lives. Don’t be fooled. The behaviors are not personality. They are manifestations of personality. The visible behaviors flow from the fundamental assumptions the person makes about himself and the world. These assumptions determine the behaviors the person uses to relate to the world.

Culture is the personality of a company. We see manifestations of culture in the behavior of leaders and employees. Are all decisions made at the top or does the company practice employee empowerment? Do employees treat customers with interest or disdain? Do co-workers act like “a family” or have open warfare?

Don’t confuse manifestations of culture with culture itself. Such confusion encourages leaders to make superficial changes in behavior (“Let’s become customer friendly”) only to find that changes are short-lived. The old culture, which never changed, soon reasserts itself.

Three Levels: Think of culture as having three levels. The visible behaviors that manifest the culture are Level One. Level Two is the company’s espoused values. What do leaders and documents say is important? Espoused values show up in important documents, such as mission statements, annual reports, and web sites. One company’s web site says: “We will only accomplish our mission with our most valuable resource... Our People!” This company is saying that its people matter. Similarly, many companies talk about such values as teamwork, customer service, quality and so forth. Some companies actually practice their espoused values. Others do not.

Level Three is where culture’s true power resides. This level can be described as “how we really think - whether we recognize it or not.” This level consists of all the assumptions people in the company make about how the world works and how to be successful.

Origins: Every company in business today has had some degree of success or it would not be in business. Company founders usually lay the foundation for success. For example, the founders of one accounting firm might have achieved outstanding success by demanding meticulous attention to accuracy. Leaders of another accounting firm might have achieved success through focus on relationships with customers. Over the years, members of each firm come to believe that their method is the key to success. Over time, these beliefs become so accepted that no one challenges them. “This is how we do things around here.” Employees who question basic assumptions are usually met with such withering responses that they quickly learn not to repeat that “error.” New employees are trained both overtly and covertly that “this is how we succeed and how you will succeed in our company.”

When beliefs become deeply accepted, they often become tacit or unconscious. By analogy, a shy man assumes that social overtures will be met with rejection. This belief controls his social decisions. The belief has been deeply held for so long that, on a day to day basis, he is unlikely to even notice such thoughts as “Don’t speak to her. She’s not interested.” Similarly, employees at the accounting firm dedicated to customer relationships are unlikely to question whether they should entertain the customer. Their thoughts simply focus on how to do so.

Leaders who recognize that their company culture needs to change in order to meet new challenges must find ways to bring deeply held company beliefs out in the open. Only by bringing beliefs into the open can leaders determine which to keep, i.e., which ones are still useful, and which to discard. Fortunately, while tacit assumptions are often unconscious, this does not mean that they are inaccessible.

The Key: The key to uncovering hidden Level Three assumptions is to look for differences between espoused values (Level Two) and actual behavior (Level One). Suppose a company says that its people are its most important asset. Then it treats them as chattel. That is evidence that the tacit assumption that controls actual behavior is that people are not really that important. This is the old story of not walking the talk. Nobody wants to be a hypocrite, but when there is conflict between hidden assumptions and espoused values, the assumptions will control behavior.

Some companies bring their assumptions into the light of day through a four hour exercise developed by culture expert Edgar Schein:

• Gather several colleagues. Include a few newcomers who may be able to see things with fresh eyes.

• Define the business problem your company faces that makes culture change important.

• Review the concept of culture.

• Make a thorough list of Level One behaviors.

• Make a thorough list of Level Two espoused values.

• Look for discrepancies. For example, if your company espouses empowerment but has policies that communicate mistrust of employees, you have a discrepancy.

• Repeat this process with other groups to test your observations.

Obviously, this process requires considerable courage by all involved. Participants will have to challenge sacred beliefs. Expect anxiety and annoyance as people identify truths that have been avoided. To help get through the negative emotion, remember that your alternative may be the business graveyard.

Dana C. Ackley, Ph.D., is founder and CEO of EQ Leader, Inc., which helps companies manage and value their people. He can be reached at (540) 774-1927, or by e-mail at dana.ackley@eqleader.net.