What is culture?

In case you didn’t know, there’s a massively huge sporting event on tomorrow.  It’s the World Cup rugby final, which pits the New Zealand All Blacks against our trans-Tasman rivals, Australia.

How huge is it? As a sporting event the Rugby World Cup ranks 3rd behind the FIFA World Cup and the Olympics in terms of popularity.  The television audience exceeds 2 billion and, according to an Ernst and Young report, the event will generate more than $2.2B in economic output to the Host economy.  So it’s a biggie.

Now, one of the common themes that has featured in the media during the 2015 tournament is culture.

There has been a lot of talk about the All Blacks Culture of Success and their reputation and record as one of the most successful teams in the history of sport.

And for the Australian team its coach, Michael Cheika, has been given huge kudos for creating a unified culture in his team, which has helped them to build a really solid win record in 2015.

The word culture gets bandied about a lot in sport. In fact recently Daniel Schofield – a journalist for the Daily Telegraph – touched on this when he wrote, “Culture as a buzz-word in modern sport has become so ubiquitous it is almost meaningless.”

Schofield has a point but the reality is, having the right culture is crucial to all endeavors where high-levels of performance are required..such as business, the military and of course, sport.

A strong culture is a necessity for the effective planning and execution of an organisation’s strategy.  And conversely, if the culture is toxic, then the plans and execution are likely to be fraught with problems.

So what is culture anyway? I’ll give you a couple of textbook definitions, before introducing mine.  But first we have to clarify the context.

When we study or discuss the culture of organisations and teams it falls within a field of study known as Organisational Behaviour (OB).  Here’s a quick overview.

Organisational Behaviour is the “field of inquiry concerned with the scientific study of the behavioural processes that occur in work settings…It encompasses such topics as employee attitudes, motivation, and performance…And it extends to larger organisational and social factors, such as the structure of organisations and environmental pressures.”

Furthermore, “the field of organisational behaviour borrows many concepts and methods from the behavioural and social sciences, such as psychology, sociology, political science and anthropology, because all are relevant to understanding people’s behaviour in organisational settings.”

(Source: Organisational Behaviour. Vecchio, Hearn and Southey. Harcourt Brace)

The field of organisational behaviour is relatively new, having evolved from the 1980s.  But, it has become a vitally important cog in the study and development of strategy, as well as team, organisation and individual performance.

So culture defined?

In the Organisational Behaviour textbook the authors define organisational culture as, “The shared values and norms in an organisation that are taught to incoming employees.”

And Businessdictionary.com defines it as:

“The values and behaviors that contribute to the unique social and psychological environment of an organization.”

In both of these definitions the word values is used.  And with good reason.  You see, values are the foundation of culture.

However, when it comes to values, a team or organisation has its proclaimed or stated values…and then it has its true values.  Its stated values are what it shares with the world in its values statements, strategic plans, media releases and other forms of communication. And, its true values are defined by its behaviour.

Want to know some brutal truth? For many organisations the stated values and the behaviour don’t match.  That is, they proclaim one thing then do the opposite.

Several years ago I was involved in the strategic planning for a provincial sports organisation.  Included in the organisation’s strategic plan were values revolving around respect and integrity.  However, the consistent behaviour displayed by key members of its leadership was anything but respectful.  And sadly, the real culture was one of animosity and bullying.

So the reality is, proclaimed values mean very little.  And some organisations will even try to fake a culture. Therefore, what matters most are the true values as measured by observing behaviour over time.

The other key point is understanding who drives the culture.  Quite simply, it’s the leaders.  That is, the leaders drive the culture and this then filters down into the organisation as a whole.

So, putting that altogether, here is my definition of culture:

An organisation’s culture is the behavioural manifestation of its leaders’ values and beliefs.

My definition differs from many others in that I define the culture quite simply as the values in action.  That is, the culture is the outward display of values.

Next, my definition highlights the key role that an organisation’s leaders play in driving the culture.

Let me expand on my definition using one of the greatest scandals in US corporate history as a backdrop.

The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world.

Enron shareholders filed a $40 billion lawsuit after the company’s stock price, which achieved a high of US$90.75 per share in mid-2000, plummeted to less than $1 by the end of November 2001…Enron’s $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history until WorldCom’s bankruptcy the next year.

(Source: https://en.wikipedia.org/wiki/Enron_scandal)

Long story short? The financial stability and value of Enron was being artificially pumped up due to shady valuations and audits.  And once the truth came out regarding the firm’s actual financial position…well, the stock chart below paints a very ugly picture.

Enron-Stock-price

What was driving the shady culture in the first place?  The values of the leadership group and in particular, the CEO.

enron-impact

In every organisation it is the leaders who create and drive the culture and values system.  And, in many ways the culture is a reflection of the personality of the boss or CEO.  Granted, within an organisation there may be different sub-cultures but overall it’s the leaders’ values that filter down as the organisation’s personality. Indeed this is how a culture is created in any organisation be it a business, sports team or even religious or community group…even a family.

So, with Enron the greed and arrogance started with the CEO, spread out to his senior management team, and then trickled down to the corporation as a whole.  What triggered the collapse of the company though was the efforts of several whistleblowers, who defied the culture exhibited by the leaders.

In summary then, culture is a behavioural manifestation of values and beliefs.  It is what an organisation displays through its actions.  So if you want to know what an organisation’s culture is really like, observe the behaviour over time.

Go the All Blacks!