Wednesday, 11 June 2014

Cultural interplay for happiness and effectiveness

I was talking to a couple of colleagues about how to change the culture of businesses the other day (as you do). Someone commented that they didn’t know how to make the culture of a client ‘digital’. His implication was that there needed to be uniformity of culture in order to succeed at making a transformation to a more productive operating model, which struck me as odd. Why would cultural uniformity be a good idea? What business actually has that today?

What’s a 'digital culture' at all? Is also a good question. I currently describe it as something that’s outcome centric, that has hierarchy that serves to resolve areas of debate rather than for command and control and devolves leadership to everyone in the organisation based on philosophical alignment about what needs to be done. My description changes quite a lot, it’d be fair to say, but this is the June 2014 version.

What about cultural uniformity, then? Well, I started to think about this and to be honest I couldn’t think of many organisations of any size where there was much uniformity. Usually different departments or silos have distinct identities based on the people who work there. Comparing finance to legal to sales to technology usually provides enough diversity to demonstrate the point. Where the cultures meet often causes issues as well. Sales targets are generally short term and tactical, whereas those of a CIO might encompass projects lasting many quarters or even years. Even sales (tactical) and marketing (more strategic) are likely to have different types of people, therefore different cultures. Businesses are bundles of cultures and philosophies, the relative prominence of which ebb and flow with the vagaries of the economic cycle and the nature of leadership. 

I’m not actually convinced that this needs to change, either. The beauty and the benefit of a bundle of cultures is in the interplay between them. That interplay brings the strength of multiple perspectives to a goal. Another thing about digital organisations is that the structure of the organisation is built around the people, rather than forcing the people into the structure. Therefore the culture of an effective finance department needs to be somewhat different to the structure of an effective sales team. They do, however, both need to be outcome, rather than process-centric. An important point, since years of ‘six sigma’ and ‘target operating models’ have left the world with very thick operating manuals and not a great deal of focus on that it’s trying to achieve.

Trouble is that making processes outcome-centric doesn’t necessarily solve the problem of making bundles of cultures interplay successfully. At most levels of an organisation the outcomes are relatively simple – abstract ones that aggregate performance to enterprise value tend to be the preserve of the Boardroom table and in any case aren’t desperately useful for executing things at a tactical level. 

The next question I asked myself was: how to solve this and maximise the benefit of the interplay? I have four ideas:
  1. Strategically, think of the organisation as layers of bundles: business model, culture, technology etc… and seek to design it so that efficacy at each distinct model within the bundle is emphasised. Use digital as the glue between the bundles and the layers (not as a single all-seeing system, but rather as a way of bringing together un-standardised data and making something from it)
  2. Tactically, set up outcome measures for a project (which is typically where interplay occurs) that have a single master outcome, linked to specific outcomes for the individual departments. Everyone’s performance on the project is measured equally by delivering their own outcome and the master. Everyone knows what’s going to make everyone else happy and gets an insight into what makes them tick.
  3. Strategically, establish common ways of working across the business, using common systems. This is particularly important in complex organisations that have stovepipes systems for accomplishing particular workflows. These systems and their attendant processes mean that progress on tasks can be opaque to people outside of the silo, creating divisions and lack of understanding.
  4. Strategically, promote distinct cultures within different functions of the business. Take the time to construct the right physical and cultural environment to support outcomes. Give them distinct identity and don’t homogenise the people side of the operations alongside the technology and supporting systems.
Where digital plays in all of this is by giving access to measurement of outcome and obtaining insight from unstructured data. Up until a few years ago it was really hard to actually measure the efficacy of an organisation… hell, it still is, but it’s getting easier all the time. The main barrier is lack of understanding… breaks in the interplay between technology, strategy and the rest of the business, perhaps.

Anyway, enough of the ramble. My conclusion is this: the digital culture is not actually a single culture at all, but a beautiful melange of cultures that make all of the people who work in and around a business happy and effective.

How about that for a headline? Thoughts, as ever, much appreciated!

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