William E.

Schneider
Bill Schneider is president of the Corporate Development Group, Inc., (CDG) in Denver, Colorado. CDG has over
215 global affiliates. He is the developer of Culturetek, which measures the alignment of strategy with culture and
leadership, and is the author of The Reengineering Alternative: A Plan for Making Your Current Culture Work
(Irwin Professional Publishing, 1994).
Abstract Why do some management ideas take root and remain
viable and others wither and die? This article offers four
fundamental reasons: all organizations are basically living, social
organisms; culture is more powerful than anything else in the
organization; system-focused interventions work, component-
centered interventions usually do not; interventions clearly tied to
business strategy work, interventions not clearly tied to business
strategy do not. The author describes research that points to four core
cultures: control, based on a military system, with power as the
primary motive; collaboration, emerging from the family and/or
athletic team system, in which the underlying motive is affiliation;
competence, derived from the university system, with the
fundamental motive of achievement; and cultivation, growing from
religious system(s) and motivated by growth or self-actualization.
Keywords Organizational change, Organizational culture,
Leadership
The following story is true.
XYZ Company is a multi-billion-dollar manufacturer of
products that are very powerful, potentially harmful, and
very expensive. These products must work the first time
customers utilize them. There is no margin for error.
XYZ Company is organized in a highly structured
manner. People within the company operate with strict
policies and procedures. Planning, engineering design,
and strict implementation are critical to success.
Leadership and management are quite authoritative,
directive, and systematic. The work is strongly
functional in nature. Decision-making is very
methodical, objective, data-based, and careful. Issues of
certainty, predictability, systematism, and safety pervade
most of what happens every day. It is imperative that this
organization remains in control of its processes.
In the organizational culture framework of our
consulting firm, this company is a control core culture
organization. (Organizational culture will be discussed
in more detail later in this article.)
In 1987, an internal Organization Development
department was established at XYZ to help increase
organizational effectiveness. The number of staff
members in this department grew to ten professionals
plus a director-level manager. During the next eight
years, this internal group and numerous external
consultants introduced a series of new, management
ideas that they believed were critically important for this
company to adopt. These professionals insisted that the
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existing culture was ineffective, outdated, outmoded,
harmful to people, and anachronistic. They called it the
``old way'' of leading and managing. They insisted that
the proper and more effective way for this company to
manage would include the following ideas:
^ Quality circles.
^ Participative leadership and management.
^ Self-directed teams.
^
Benchmarking and best practices.
^
Total quality management (TQM).
^
Flexible organization.
^
Empowerment.
^
Quality of work life.
^ Human potential development.
^ Synergy and win-win.
^ Management by consensus.
^
High performance work teams.
^
Core competencies.
By the end of 1996, all the internal professionals had
been asked to leave, and none of the external consultants
were still involved with the company. XYZ had spent
$30 million on the above interventions. The only
initiatives from this list that were accepted and
implemented ± statistical process control and
manufacturing-requirements planning systems ± were
embedded in the TQM program instituted in 1990-
1992. The company did its best to adopt all of the
``better'' management ideas, but by far the majority of
them did not work.
Senior and middle management in this company have
reached consensus on one thing: they will never allow
something like this to occur again. All of those internal
and external consultants were good-willed, bright, and
highly capable professionals. They did everything they
could to make a significant contribution. Company
executives and personnel did everything they could to
make all the interventions work. What went wrong?
Unfortunately, this kind of story is often the rule
rather than the exception. Why? Why do some
management ideas take root and remain viable and
others wither and die? This article offers four
fundamental reasons:
(1) All organizations are basically living, social
organisms.
(2) Culture is more powerful than anything else in the
organization.
(3) System-focused interventions work; component-
centered interventions usually do not.
(4) Interventions clearly tied to business strategy work;
interventions not clearly tied to business strategy do
not.
1. All organizations are basically living, social
organisms
Every organization has its own culture, character,
nature, and identity. Every organization has its own
history of success, which reinforces and strengthens the
organization's way of doing things. The older and more
successful the organization, the stronger its culture, its
nature, and its identity.
Organizations are communities of people with a
mission, they are not machines. They have machine-like
characteristics, but these must serve the needs of the
community and not vice versa. Organizations exist to
fulfill their missions and to contribute to the larger world
around them, including the marketplace.
There is a hierarchy in the nature of all living systems.
The basic character of a living, social organism is more
fundamental, deeper in the hierarchy, and, therefore,
much more powerful than business processes, financial
systems, business strategy, vision, supply chains,
information technology, lean manufacturing, marketing
plans, team behavior, corporate governance, investor
reports, and so on. These phenomena are important, but
they are less important than the fundamental nature of
an organization as an organism. Addressing this critically
important reality must be where any intervention begins.
If this is done, the intervention has a chance of
succeeding. When it is not done, the probability of
failure is high.
It may seem like an intervention is working in the
short term, but what is usually happening is that the
living system is yielding to short-term cost savings. Over
the intermediate and long terms, the old ways begin to
creep back in. This outcome is most evident in the case
of ``surgical'' interventions, such as reengineering, de-
layering, and downsizing. There are times when surgery
is necessary; but it is not the solution every time,
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everywhere, in every organization. Yet, quite a few
recent management thinkers would lead one to believe
that surgery is the only treatment that will work.
All living systems ± sub-atomic cells, biological
systems, ecological systems, societal systems,
interplanetary systems ± grow and develop from the
inside out. They start from their core and grow and
evolve outward over time. They operate for a purpose,
and that purpose is always greater than the self-interest
of the organism itself. People, organizations,
communities, and societies exist in relation to one
another. Each establishes its own unique, non-linear
pattern, but it is always from the core to the periphery.
One of the central reasons that management ideas
work or do not work has to do with whether or not they
are based on the non-linear paradigm of nature. The
more the idea operates from the paradigm of
``organization as machine,'' the greater the likelihood
that it will not work. The more machine-like the idea,
the more the living system will take the hit and, as soon
as possible, start the process of reconstituting itself, just
as the human body operates when it has been damaged
or injured. Indeed, the evidence supports the idea that
system-attacking, machine-paradigm-based
interventions (i.e. reengineering and downsizing) do not
last. Every time, the organization's ``immune system''
begins developing ways to neutralize its ``attackers,'' and
the living system reconstitutes ± heals ± itself.
Conversely, the more a management idea builds on
the organization's nature and strengths and honors its
integrity as a living, social organism, the greater the
likelihood that the idea will be adopted and integrated
into the fabric of that organism.
2. Organizational culture is more powerful than
anything else
Research into the nature of living systems reveals that all
living systems, including social organisms
(organizations), have certain inalienable and consistent
characteristics[1]. When it comes to the true nature of
living systems, reality turns out to be a pattern of
dynamic relationships.
The pattern of dynamic relationships at the
organization level is culture, which explains why
organizational culture is so powerful. So powerful, in
fact, that its impact supersedes all other factors when it
comes to organizational, economic performance[2]. In
the research of Collins and Porras, it is strikingly evident
that organizational culture lies at the center of what
differentiates visionary companies from comparison
companies and, parenthetically, significantly greater
economic performance over the long term[3].
Culture, ``how we do things around here in order to
succeed,'' is an organization's way of behaving, identity,
pattern of dynamic relationships, ``reality,'' or genetic
code[4]. It has everything to do with implementation
and how success is actually achieved. No management
idea, no matter how good, will work in practice if it does
not fit the culture. An organization can have the most
superb strategy, but if its culture is not aligned with and
supportive of that strategy, the strategy will either stall or
fail.
While no organization has one pure culture
throughout, every successful organization has a core
culture. The core culture is central to the functioning of
the organization, forming the nuclear center for how that
organization operates in order to succeed. It is critical
that this core culture be aligned with the organization's
strategy and its core leadership practices. This alignment
is, in our research, central to any organization's
effectiveness. Without it, focus is lost and energy is
wasted as people, systems, and processes work at cross-
purposes with one another. The research of Collins and
Porras confirms this conclusion.
The leaders of an organization create the core culture
± consciously or unconsciously ± from their own
personal history, nature, socialization experiences, and
perception of what it takes to succeed in their particular
marketplace. Our research indicates there are four core
cultures:
(1) Control, based on a military system, with power as
the primary motive.
(2) Collaboration, emerging from the family and/or
athletic team system, in which the underlying motive
is affiliation.
(3) Competence, derived from the university system, with
the fundamental motive of achievement.
(4) Cultivation, growing from religious system(s) and
motivated by growth or self-actualization.
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The strong connections between strategy, culture, and
leadership are shown in Exhibit 1. The more an
intervention or practice adapts to the epistemology, or
central way of knowing and understanding, appropriate
to the core culture, the more probable that intervention
will take hold and have a significant impact on the
organization.
The core epistemologies are defined as follows.
Control
This culture is all about certainty. It fundamentally
exists to ensure certainty, predictability, safety, accuracy,
and dependability. The basic issue in this epistomology
is to preserve, grow, and ensure the well-being and
success of the organization per se. The organization as a
system comes first. Accordingly, the design and
framework for information and knowledge in the control
culture is built essentially around the goals of the
organization and the extent to which those goals are met.
This culture is centered on organizational goal
attainment.
Collaboration
This culture is all about synergy. It fundamentally exists
to ensure unity, close connection with the customer, and
intense dedication to the customer. The fundamental
issue here is the connection between experience and
reality. The organization moves ahead through the
diverse collective experiences of people both inside and
outside the organization. People in a collaboration
culture gain knowledge when diverse, collective
experience has been fully utilized. This culture is
centered on unique customer goal attainment.
Competence
This culture is all about distinction. It fundamentally
exists to ensure the accomplishment of unparalleled,
unmatched products or services. This is the culture of
uniqueness per se, of one-of-a-kind products or services.
The basic issue here is the realization of conceptual
goals, particularly superior, distinctive, conceptual goals.
The framework for information and knowledge is built
essentially around the conceptual, system goals of the
organization and the extent to which these goals are met.
This culture is centered on conceptual goal attainment.
Cultivation
This culture is all about enrichment. It fundamentally
exists to ensure the fullest growth of the customer,
fulfillment of the customer's potential, the raising up of
the customer. This culture is all about the further
realization of ideals, values, and higher-order purposes.
The basic issue here is the connection between the
values and ideals of the organization and the extent to
which those values and ideals are being operationalized.
The key emphasis is the connection between what is
espoused and what is put into operation. This culture is
focused on value-centered goal attainment.
Examples of actual companies that typify each of the
four core cultures are shown in Exhibit 2.
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Exhibit 1 Ð Strategy, culture, and leadership connections
Culture Strategy Leadership Epistemology
Control Market-share dominance
Commodity
Commodity-like
High distribution intensity
Life and death
Predictability
Authoritative
Directive
Conservative
Cautious
Definitive
Commanding
Firm
Certainty
Organizational systematism ± the fundamental
issue is to preserve, grow, and ensure the
well-being and success of the organization per se
Collaboration Synergistic customer relationship
Close partnership with customer
High customization
Total solution for one customer
Incremental, step-by-step, relationship with
customer
Team builder
First among equals
Coach
Participative
Integrator
Trust builder
Synergy
Experiential knowing ± the fundamental issue is
the connection between people's experiences and
reality
Competence Superiority
Excellence
Extremely unique
Create market niche
Constant innovation to stay ahead
Typically, carriage trade markets
Standard setter
Conceptual visionary
Taskmaster
Assertive, convincing persuader
Challenger of others
Distinction
Conceptional systematism ± the fundamental issue
is the realization of conceptual goals, especially
superior, distinctive conceptual goals
Cultivation Growth of customer
Fuller realization of potential
Enrichment of customer
Raise the human spirit
Further realization of ideals, values,
higher-order purposes
Catalyst
Cultivator
Harvester
Commitment builder
Steward
Appeal to higher-level vision
Enrichment
Evaluational knowing ± the fundamental issue is
the connection between the values and ideals of
the organization and the extent to which those
values and ideals are being operationalized
. |
This framework for understanding and measuring
organizational culture is a type of unified field theory for
this critically important organizational phenomenon. It
gives us a paradigm with which we can interpret why a
given management idea works or does not work in an
organization. If the management idea fits the nature of
the organizational culture, the probability is very high
that that idea will be successful.
By far the majority of management ideas heralded at
one time or another during the past 40 years can be
shown to be a natural fit with one and sometimes two of
the four core cultures. The majority of them can be
shown not to fit the other core cultures as shown in
Exhibit 3.
3. System-focused interventions work;
component-centered interventions usually do not
The more component-centered the management idea,
the less likely it will work. Indeed, the more component-
centered the idea the more the buyer should beware!
There is no such thing as ``one size fits all'' in
organizational change. In almost every instance, when
this approach is proffered, the component-centered idea
has a strong characteristic of ``you need what I can do''
behind it.
Component-centered ideas that do not fit the core
culture of the organization in question only pull the
organization off center. In the intermediate and long
terms, they just fade away or run out of energy and
commitment from others. Unfortunately, they also waste
time, energy, and money and leave employees confused
and often less respectful of management.
It is important to note the distinction between
practices and principles. The principles of many
component-focused interventions are usually valuable
for any one organization and core culture to consider.
The practices of that component-centered intervention
are a different matter. For example, empowerment is a
component-centered idea that will work (in practice)
most naturally in a cultivation culture. Empowerment is,
in many ways, what the cultivation culture is all about.
But the practice of empowerment programs will not
work in a control culture, which is premised upon an
epistemology that is the exact opposite of the cultivation
culture. The principles embedded in empowerment,
however, are relevant to the control culture. In a control
culture, empowerment means to actively get input about
implementation matters and to actively encourage
employees to come up with as many ideas as they can
when it comes to implementing things more efficiently
and effectively. This same line of reasoning can be
applied to each of the four core cultures regarding many
of the management ideas listed in Exhibit 3[5].
Any intervention must fit the system, the core culture.
If it does not, the chances of it having a beneficial impact
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Exhibit 2 Ð Examples of the four organizational cultures
Control Collaboration Competence Cultivation
Wm. Wrigly Jr
Kellogg
Procter & Gamble
General Dynamics
Exxon
Marriott Hotels
Reflexite Corporation
Goldman-Sachs
Dana Corporation
Greater Southeast Community Hospital
CRS Sirrine
Lucent Technologies
Cray Research
ADP
Citicorp
Four Seasons Hotels
Intel
Celestial Seasonings
Herman Miller
Esprit de Corp
3M
W.L. Gore
Shorebank Corporation
Exhibit 3 Ð Management ideas by core culture
Collaboration Control Cultivation Competence
Diversity. Seeking customer loyalty.
Teams. Open offices. Open book
management. CEO as deal maker.
Quality circles. Self-directed teams.
Group-oriented leadership.
Participative management. Sensitivity
training. High performance work
teams. Brainstorming. Group
facilitation. Management by
consensus. Synergy. Win-win.
Interdependence (Covey). The Quaker
method of management. Nominal
group technique. The ``collaborative''
workplace
Vertical integration. Corporate
downsizing. Mass customization.
Supply chain management.
Statistical process control (TQM).
Process reengineering. Lean
manufacturing. Time-based
competition. Activity-based costing.
Manufacturing-requirements planning
systems. Automated distribution and
sales systems. Brand extensions.
Functional stovepipe thinking.
Growth share matrix. Rightsizing.
Robotics and numerical control. Fast
cycle time. Zero-based budgeting.
Formal processes to devise
strategies. Decision trees and
simulation.
Flexible organizations. Industrial
ecologies. Empowerment. Open book
management. Seeking employee
commitment. Leadership as an ``art''
(DePree). ``Principle-centered''
leadership (Covey). Entrepreneurial
management. Human potential
movement. Quality of work life.
Social responsibility. Charismatic
leadership. ``Spirit at work'' (Conger).
``Enlightened'' leadership (Oakley and
Krug)
Knowledge-capital measures.
``Virtual'' organization. Benchmarking.
Entrepreneurial management. ``High
output'' management (Grove).
Imitating the ``excellent'' companies
(Peters and Waterman). Skunkworks.
Managerial grid. Best practices.
Continuous improvement. ``Matrix''
management. Core competencies.
Performance-based compensation
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are 50-50 at best. ``After all, it is much easier to sell a
medicine with a label saying `This will cure you, no
matter what your complaint,' than it is to sell one with a
label saying `This treatment may or may not succeed,
depending on your circumstances. It is likely to be
painful and could well have unintended side effects'''[6].
4. Interventions clearly tied to business strategy
work; interventions not clearly tied to business
strategy do not
When it comes to adding value to an organization, the
deciding factor is strategy, not the personal theories of a
consultant or manager about ``the right way'' to lead,
manage, or operate. Unless and until any management
idea can be clearly linked to the strategy of the
organization in question, it needs to be viewed with
skepticism at the very least. If the clear link between the
idea and the organization's strategy cannot be made, the
idea is likely tied more closely to what the purveyor of
the idea can do or to the personal value and belief system
of the purveyor and nothing more. Implementing such
an idea runs great risk of pulling the client organization
off center in order to accomplish the purpose(s) of the
consultant or the manager, not the purpose strategy of
the organization being affected.
Alignment between strategy, culture, and leadership
is critical. It is, indeed, the central definition of
organizational effectiveness[7-11]. Organizations that
are effective and financially successful in the long term
are focused and aligned. Collins and Porras found that
these organizations establish clear ideologies, strong and
clear cultures, and methods for selecting and developing
people who encourage others to work in concert with
their strategy and leadership. When Collins and Porras
synthesized the results regarding visionary companies,
they concluded that the most distinguishing feature of
the visionary companies was that they constantly
emphasized alignment.
Once an organization's strategy is established, the
appropriate core culture and set of core leadership
practices are preordained. The mission or strategy of the
organization sets the stage for what that organization is
all about. There is an aligned core culture and set of core
leadership practices for every singular strategy. The key
is to measurably link culture, leadership, and strategy
and then pinpoint where alignment is lacking. I.'
References
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3. Collins, J.C. and Porras, J.I., Built to Last: Successful Habits of
Visionary Companies, HarperCollins, New York, NY, 1994.
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