One of the crucial (yet often under-acknowledged) aspects of digital transformation is nurturing and enabling the organisational culture that can support greater agility. Teams working in agile ways but surrounded by the wrong kind of culture will encounter the kind of friction that can be potentially disastrous to progress.
One of the best ways of thinking about organisational culture comes from Edgar Schein (author of Organizational Culture and Leadership and a former professor at MIT Sloan School of Management). Company culture might be defined in terms of the pattern of beliefs and behaviours that grows up around how the business has overcome challenges and prospered. Schein describes it as:
“a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.”
And he defines three key ways in which culture manifests within organisations: observable artifacts, espoused values, and basic underlying assumptions.
Artifacts and behaviours: visible behaviours and elements in an organisation that might reveal what the company demonstrates as important, but might also be recognised by people who are not part of the culture. This might include physical surroundings and technologies but also language, jargon, stories, myths and practices. This might be thought of as the surface elements.
Espoused values: qualities and rules of behaviour that are advocated by a company’s leadership and management, and show how the organisation might represent itself. This might include published things such as a code of conduct, public statements or specific events and material.
Basic assumptions: less tangible, but powerful, underlying determinants of an organization’s attitudes, thought processes, and actions. These might include ingrained values and assumptions that are unquestioned, taken for granted, largely invisible and therefore hard to recognise from within.
A matrix like the Competing Values Framework enables us to map organisational culture on a 2 x 2 with axes expressing values that are widely different: the vertical axis pits flexibility and discretion against stability and control; the horizontal axis has internal focus and integration set against external focus and differentiation. In the book we discuss the kinds of cultures that enable greater agility as being rooted in people focused attributes such as autonomy, empowerment, collaboration – all qualities that sit more comfortably in the upper half of this matrix, and the opposite of those cultures that are more rooted in control, consistency, uniformity and competition. That’s not to say that agile teams can’t operate in more rigid and controlling cultures, but there is likely to be conflict that we need to be aware of and protect against.
Given the importance of the people side of digital transformation, and of employee experience as well as customer experience as a driver for change, then culture becomes critical. If the desire is to promote a culture that is more suited to agile attributes and working, then we need to think about this in three dimensions not one. Culture is far more than the visible signals (posters, words on walls, colourful cushions and ping pong tables) that some seem to think it is. Whilst artifacts and behaviours might be thought of as more obvious, surface elements, it is the basic assumptions that are deeply embedded, often poorly recognised, and which are therefore powerful drivers of behaviour.
Recognising what these are is an important first step in addressing behaviour change (there’s value here in an outside-in perspective, for example from new employees). Then we need to focus how to unlearn existing behaviours in order to relearn new ones, something we describe in the book in terms of understanding, breaking and creating organisational habits. Because that what they are – customs, practices, routines that are automatic, unquestioned. Habits support assumptions and behaviours. Assumptions and behaviours can either block change from happening at all, or they can be powerful enablers for transformation.
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