Every organization has many facets that make it unique as well as challenging. This article series is directed at topics that can help you run your business more effectively. To that end, we have been building a foundation of knowledge from which you can build a sustainable enterprise as we hurtle toward an ambiguous future. At this point, I believe it’s important to reiterate the overall objective of this series: To help senior leaders view their companies from a design perspective, from which they can gain better results across the board, not merely with financial outcomes.
Besides building trust throughout your company, at both the organizational and individual leadership levels, building the right culture is your most critical responsibility for building a sustainable enterprise. The messiness of building culture is one reason some organizational leaders avoid it. Culture is not simple: It’s messy because people are involved and complex because dealing with it requires a broader, systemic view of the business and the universe within which the business operates. Successful leaders appreciate, nurture, develop, and protect their cultures because they understand culture is the social glue that binds their most critical assets, their people, to the purpose of the business.
The System of Profound Knowledge
Many business owners who are struggling fail to comprehend and embrace the value and importance of culture for sustainable business success and lack an appreciation of the systems for which they are responsible. W. Edwards Deming, considered to be the father of the Quality movement that began in the 1980s, defined a system of profound knowledge that is universally current. If a leader at the top does not understand the system that comprises the business, he or she can expect much less of the employees upon whom organizational performance depends.
| Deming’s System places an appreciation of the system of business at the pinnacle of any business model. One must see any business from a “systems” perspective, where several subsystems, e.g., human capital, operations, etc. work together to create the whole. Deming noted three other critical elements of a business: (a) the theories that support the business, (b) the concept and understanding of variation, and (c) a strong understanding of psychology. Deming considered the last element critical because he understood human nature and the variability of human behavior, which added to variation within the business. Recall discussions from previous articles about aligning personal and organizational values. Gaining alignment between values reduces variation and helps employees focus their efforts on the objectives they seek to achieve rather than how to tap dance around difficulties in working with others.
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| Source: Deming, W. E. (1994). The new economics for industry, government, and education (2nd ed.). Cambridge, MA: The Massachusetts Institute of Technology. |
Appreciating Culture
Culture does not happen; it exists because people are social beings who naturally seek acceptance and belonging within a community of others. Edgar Schein, a world-renowned expert of organizational culture, noted how cultures form through spontaneous interactions in unstructured groups through which patterns and norms are established. Anyone who ever played pick-up ball on a school playground can easily identify with this concept because the scrawniest or heaviest children in the group knew they would be the last ones selected for any team. Why? Because the informal culture of sandlot baseball was small players could not hit the ball far and heavier players could not run fast. Many times, business cultures operate the same way.
Leaders set the tone for the organization and determine the critical qualities by which others characterize the business. Some leaders often select the aggressive or assertive salesperson because they believe these traits bring success. Salomon Brothers was once a darling of Wall Street, but John Gutfreund destroyed the company by setting the wrong tone at the top that trickled down and permeated the organization. Even though leaders may believe their actions are personal and do not affect the character of an organization, employees follow the actions of the leader because of the belief the leader knows best. If the leader fails to set the proper tone and chooses to ignore his responsibility for defining and nurturing organizational culture, then the spontaneous, informal cultures that arise will establish the culture instead, with potentially devastating consequences.
Thus, leaders must include culture within their appreciation of their own business systems. Deming acknowledged the psychological component of culture within his simple model of profound knowledge. Many business leaders shy away from the complexity of culture because they are unprepared to deal with a side of business they were not taught. Dealing with the psychological functioning of a business requires leaders to engage right-brain thinking, which is more important now than ever before. Business leaders need to wake up to the fact that business sustainability depends upon the bonds created through organizational culture and the minds of their people.
Several articles that follow will delve more deeply into creating culture “from the bottom up.” We will weave practices addressed in previous articles with this topic through which you can begin to create a system of profound knowledge related to your own business. Please think about what you already know about your company’s culture and what you desire to see.
Additional Suggested Reading:
Deming, W. E. (1994). The new economics for industry, government, and education (2nd ed.). Cambridge, MA: The Massachusetts Institute of Technology.
Questions for the Week: What variations exist within my business? Is everyone aligned with a core set of values and principles through which we apparently guide the business with an invisible hand? If not, what principles should be in place to ensure everyone is consistently energized and moving together toward our goals and objectives with good humor? Where do we need to practice more right-brained thinking whereby we engage everyone’s creative energies?
| About the Author: Dr. Ray Benedetto is co-founder of GuideStar, Inc.® a practice in organizational leadership for performance excellence (www.guidestarinc.com). He is a retired Air Force colonel with a distinguished active-duty military career. He is board certified in Healthcare Management and a Life Fellow of the American College of Healthcare Executives (ACHE). Dr. Ray taught leadership for 12 years for the University of Phoenix Chicago campus. He holds degrees from Penn State (BS), the University of Southern California (MSSM), and the University of Phoenix (DM). He is co-author of “It’s My Company TOO! How Entangled Companies Move Beyond Engagement for Remarkable Results” (Greenleaf Book Press Group, 2012) and numerous ezine articles available online. You can reach him at ray@guidestarinc.com. |