From Agile to Radical: organizational culture

The final aspect of the Radical paradigm we’ll discuss is the notion of leadership. Leadership is a highly overloaded and overhyped term and many are using the concept in all kinds of ways that may not be accurate. For all the hyperbole, the fact is that leadership, the ability to align groups of people around a common goal, is a necessary aspect of getting anything done in any context of group work.

Leaders are responsible for creating the right culture and then ensuring it’s real and not a paper tiger that people pay lip service to. The reason that this is so difficult is because culture is easy to point to but hard to grasp in actionable terms. One model that helps think about culture has been developed by Edgar Schein. He organizes culture in three layers: artifacts, espoused values and underlying assumptions.

The artifacts in this model refer to the physical environment, dress code, symbols, rituals and the way people communicate in the organization. These are easily visible and easy to relate to. I remember that when SaaS companies became a thing, they all felt a strong need to be cool. So, the employees went around in black T-shirts while wearing rollerblades and the buildings had slides in them that people could take to rapidly go from one floor to the next. While pretty useless from an effectiveness perspective, these artifacts were intended to communicate the organizational culture.

Espoused values are the corporate values virtually every company has, like the vision and mission as well as policies. Although they can be very important, they often receive little attention. In my experience, this is for at least two reasons. First, many of these values, vision and mission statements are so generic that they don’t help guide decisions. You can basically take any path and explain to yourself and others why it’s in line with the company’s espoused values. Second, even if the espoused values give some guidance, this is ignored in many companies.

One beautiful example was when I worked for Nokia. One of our espoused values was to delight the customer with an amazing unpacking experience when they got their new phone. However, someone in manufacturing had decided that packing the phone in what basically was an egg carton was low cost and resulted in minimal loss due to damage during transport. Of course, from a purely rational perspective, it was the right decision. But I don’t think I have to explain the differences in experience when, as part of a corporate event several years ago, a brand new Nokia phone and a brand new iPod were unpacked.

The underlying assumptions, the third aspect of the model, are the deep-rooted beliefs and attitudes as well as the unconscious thoughts that are at the heart of the organizational culture – sometimes people refer to them as behaviors sitting in the walls of the building. These assumptions are so difficult to work with as people in the company are often not even aware of them. They often don’t even understand that there are alternative ways to look at the world. For instance, many companies in the automotive space have earned their revenue by selling vehicles or parts for vehicles. The notion of a continuous revenue stream that complements or even replaces the existing business model is something that people can simply not fathom. It doesn’t fit the underlying assumptions that have been shaping their behavior for, often, decades.

When an industry is experiencing a major transformation, such as due to digitalization, the organizational culture that often has been serving the company well for a long time becomes a major stumbling block and inhibitor. There simply is no clear connection between where the company needs to go and the existing culture. As the change often is initiated when the clouds already are on the horizon and people are worried about the future, there’s an even stronger pull and desire to return to basics and the things that made us successful in the past. The longer we wait to initiate the change we know is needed, the harder it is to make it happen.

This is why I often refer to great companies as those that initiate change before it’s necessary; at that point, it’s the easiest to implement the change as there’s less FUD (fear, uncertainty and doubt). Good companies use fear as a mechanism to instill change as it can be hard to get the organizational momentum to drive the needed changes otherwise. Of course, bad companies wait too long and initiate the change way past the point of no return. This often leads to a Hail Mary change that, if not successful, may easily cause the organization’s demise.

When working on changing the organizational culture, we need to address the artifacts and espoused values, but the hardest work will be to change the underlying assumptions. It requires us to make them explicit so that people transition from unconsciously using them to being consciously aware of them. That then needs to be followed by an undoing of these assumptions and instilling new ones. Of course, this sounds easy but in practice is incredibly difficult.

In one company I worked with, the folks responsible for quality assurance felt that slow, manual testing right before release was the best way to achieve quality. Even when we showed data that made clear that using automated testing continuously and throughout the development led to better outcomes, the team had a really hard time letting go of their underlying assumptions. The hard part of organizational culture, especially for engineers, is that it lives below the rational level. You can come up with rational arguments and advocate for these all day long and it won’t do anything. Instead, it requires empathy to understand the underlying beliefs, make them explicit and then work on replacing them.

Organizational culture is a fuzzy, hard-to-grasp topic that requires leadership to work with, especially during times of significant change. Structuring culture in artifacts, espoused values and underlying assumptions can help work with the challenge. Of these three, the underlying assumptions, being the most implicit and unconscious aspect of the culture, are the hardest to change. It may sound like a waste of your time but remember that, in the end, the organizational culture dictates how your people behave when you’re not in the room. To end with a quote from Garry Vanerchuk: “Company culture is the backbone of any successful organization.”