Culture, Fear, and Patterns: Rethinking Organisational Transformation

Let's begin with a juicy fact from the Harvard Business Review. An organisation spends approximately 2,200 euros per employee annually on culture change programmes. Only 30% of those businesses report an adequate return on investment. Compare that with the ~1200 euros organisations spend on L&D per employee (Statista). So, is it finally time to stop trying to change our organisation's culture? Is now the time to focus on more sustainable and practical solutions to the challenges of behaviour and productivity that we see in business?

Let me ask you a couple of questions: has former President Trump impacted the culture of America? Or what about the coup d’état in Myanmar in 2021? What impact has that had on the culture of the country? Or what if we go further back to the Khmer Rouge? A group that carried out a radical programme of isolating Cambodia from foreign influence, closing schools, hospitals, and factories, and abolishing banks, finance and currency. On top of killing between two and three million people, which included the elite, the educated, and the religious. What impact did that have on the culture of Cambodia?

Richard Rumelt, one of the world's most influential business strategists, explains how much impact the Khmer Rouge had on the culture of Cambodia. Zero. For all their ideology and warped beliefs, the Khmer Rouge did not affect Cambodia's culture.

Has Trump impacted the culture of America? I do not believe he has.

Will the culture of Myanmar change under a military junta? I do not believe it will.

So, what does that mean about the culture we have in our organisations? Culture is the number one factor in determining its success. Google has one million unsolicited job applications yearly, and it's not because of its strategy. According to Glassdoor, 56% of employees say culture is more important than salary. According to Gallup, a robust organisational culture increases critical performance metrics, including net profit, which can see an 85% increase over five years.

So if culture is business-critical and is (almost) impossible to change, does that mean businesses with cultures that suck are, to put it bluntly, screwed? Well no. 

So why does everyone want culture change? There is not a week that goes by when it does not pop up in a conversation with a client. Even today, as I write this, I had a client say, "we're doing a global re-org. of our retail division post-Covid. But it's a culture change programme."

So what are they after? When people talk about culture change - what does it mean? What is the question behind the question?

Firstly, it is a great way to tap into an endless source of client fear, and infinite client fear translates directly into retainers and a steady money supply. 

Secondly, we intrinsically know when something is wrong. We feel it; we sense it. When it is unclear, we lump it into a giant bucket called "stuff that is necessary but hard to do, and I don't understand."

Let's see if we can clarify this fuzzy culture thing.

Fear

Take the three examples above: America, Myanmar and Cambodia. The culture has not changed, but something has, and that is fear. The level of anxiety increased (has increased) dramatically.

I've done a lot of work with a client who has had several different CEOs over the years I've worked with them. Each CEO has had a direct impact, for better or worse, on the levels of fear, openness, and the company's sense of 'safety'. Each CEO has introduced a new strategy, people, teams, and ideas. But the fundamentals of how the organisation "gets stuff done" (culture) did not change.

Robert Kegan is an American Development Psychologist. He has identified five stages in adult development from babies through to adulthood. He calls stages 3-5 of his development scheme the Socialised Mind, the Self Authoring Mind, and the Self Transforming Mind.  

• The Socialised Mind seeks its identity and self-worth from external factors: what others think about 'me'. Individuals with Socialised Minds make decisions that make themselves feel safe and accepted. They are reactive in thinking, making decisions that make themselves feel safe. Think teenagers.

• The Self Authoring Mind derives its sense of identity from within. Their decision-making is about creating better outcomes for themselves and those around them.

• The Self Transforming mind (perhaps 1-3% of the population) can hold multiple identities. They can navigate paradoxes in their thinking and their worldview.

Kegan estimates that 60%-70% of adults are in the category of the Socialised Mind. In other words, in any organisation, >60% of leaders make decisions driven by an intrinsic need to make themselves feel safe, a decision rooted in their sense of identity and self-worth. And here is the thing about a decision designed to make someone feel intrinsically safe: it usually makes everyone else feel less safe. 

So, do you need a culture change? Or do you need to address the levels of fear people feel in the organisation?

Repeating Patterns

I was asked by a Communications Director why, whenever she hired young, vibrant, creative-thinking talent, they became like everyone else in the team within about two months.

The answer is straightforward. We constantly make subconscious micro-adjustments to our behaviour, dress, voice, movements, and ways of thinking to conform to the group. When I conform, I belong. If I don't belong, I'm alone, which means death at a deeply primal level. So, ensuring that I belong is the most important thing I can do. It is one of our brains' primal functions. Find the patterns that matter and copy them. It's why we all end up sitting similarly during a meeting.

That also means we intrinsically follow the organisation's thinking and behaviour patterns. Patterns of doing something in a certain way within an organisation ensure it can survive. An example would be an entrepreneurial start-up that is working 24/7 and saying yes to every job that comes in. That is necessary for survival in the start-up phase.

I'm currently working with a 150-year-old 'start-up' of 10,000 people, still working 24/7 and still saying yes to every job at the expense of people's physical, mental, emotional and financial health and the business. 

You could argue that they need a culture change. I would say they need to outgrow old repeating patterns. If we don't outgrow patterns, we stifle growth, success, people and profits.

So, do you need a culture change? Or do you need to outgrow the old patterns that have served so well but now hold you back?

Acknowledging The Past

In 1775, the young colony of America set about freeing itself from the shackles of the British monarchy, Parliament, and taxation. The young American colonists pitted themselves against the British Army. The rest is history partly, I suspect, due to the tendency of the British to wear bright red tunics and to march in straight lines. But something interesting happened in the foundations of what is now the United States of America. First, the Continental Army (American colonists) barred Black patriots from fighting with them. Secondly, some 50,000 enslaved Africans were liberated by the British to fight against the Continental Army. They were released, in essence, to fight against America becoming 'these United States.'

The moment of foundation, when something begins, can profoundly affect its culture and long-term impact. Does it start with a yes or a no? "Yes to sustainability' will have far more impact than 'no to oil.' 

The Romans had a god called Janus, from whom we derive the word January. Janus is the god of Transitions, the god of change. He has one older, wiser face that looks to the past and a second, youthful face that looks to the future. We must see our history, the good, the bad, and the ugly. The things that we're proud of and the things we're ashamed of. And until we can see it and acknowledge it, it will forever haunt and disrupt our present. The Inuit, the people of Greenland, have a saying: 'if you hush up a ghost, it grows bigger.'

Prof. Isabelle Mansury has been conducting fascinating research at the University of Zurich, studying epigenetics in mice. That is how the body reads the DNA material, not the mutation of the DNA itself. She has found that if a mouse experiences trauma, the same trauma can be passed down through seven, eight or even nine future generations, not in DNA mutation but in how the body reads it. In other words, a mouse will exhibit behaviour today that can be traced to a trauma his (or her) great-great-great-great-great-great-great-grandfather or grandmother had. So, in human terms, my behaviour today could be connected to and in response to events 250 years ago.

Many factors impact your chances of being shot by a policeman in the US, but the rate at which police kill black Americans is more than twice as high as white Americans.

Do you need a culture change? Or do you need to acknowledge events in the past, however painful?

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Culture is a complex, aromatic mix of your founders, founding promise, history, the good you have done and the bad, your customers, country, purpose, vision, story, brand, and leadership. It's almost impossible to change, and as with Cambodia and Myanmar, we should be insanely thankful for that.

Now, there is a caveat to this, and that is language. Language and culture are joined at the hip. Changing the language and you can nudge the culture. That is something we shall explore later in the year.

For now, let’s enjoy the freedom that not having to focus on a seismic culture change programme in 2023 gives us. The albeit still complex but infinitely more manageable challenge for 2023 is addressing the fear people may feel of being their whole selves. To identify old patterns of behaviours that are holding us back. To be conscious of how our past may impact our present.