109
The cultural network, devised by
Deal and Kennedy, refers to the informal
channels in a company—storytellers,
gossipers, and whisperers—through
which culture is formed and passed on.
Deal and Kennedy also defined four
types of organizational culture,
which emerge from the interplay
between a company’s attitude to
risk, and the speed of feedback and
reward. In the tough-guy, “macho”
culture, rapid feedback and reward
are combined with a high tolerance
of risk, as in the advertising industry.
In the work-hard, play-hard culture
—such as a sales company—risk is
less prevalent, but rapid feedback
and reward produce a high-pressure
environment. In the “bet-your-
company,” high-stakes culture, the
risk attached to decisions is high,
but feedback on success or failure is
slow. The oil industry is typical of the
high-stakes culture. In a process
culture, such as an insurance
company or government agency,
feedback is slow and risks are low.
Leadership and culture are
interwoven and interdependent. If a
leader does not protect or redefine
the core values that made a
company successful, culture can
erode. In 2012, a Goldman Sachs
employee bemoaned the investment
bank’s “toxic culture” in an open
letter to The New York Times,
claiming: “the culture was the
secret sauce that made this place
great and allowed us to earn our
clients’ trust for 143 years ... I look
around today and see virtually no
trace of [that] culture.” The letter
made headlines, and the company’s
shares fell by 3.4 percent.Culture in practice
The desire by leaders for some sort
of standardized culture—one that
is fixed, visible, and stable—is
understandable, but it likely to
operate only in the imaginations of
leaders than in the experiences of
employees. Companies rarely have
one culture; they are usually a
combination of many, which
overlap across departments,
countries, and business units. The
task for leaders is to ensure that
these cultures do not diverge too
far from core organizational values.
Organizational culture is not
static. Every type of culture is
dynamic and shifts, incrementally
and constantly, in response to
internal and external pressure.
Managing culture, especially
through periods of deliberate
change, is one of the most difficult
business tasks a leader can face.
The advice for leaders seeking
to change culture is start small.
Culture is slippery, and trying to
change everything at once often
results in failure. Bold new mission
statements, big office redesigns, or
exhortations that “working here is
fun” rarely have the desired impact.
Cultural change requires long-term
investment in employees, not in
buildings and branding. This is
because culture may be led from
the top, but it grows from the
bottom; it requires patient nurturing
over time. Leaders must understand
the dynamic of an organization’s
culture so that they can usefully
draw on its strengths, rather than
be overcome by its constraints. ■LIGHTING THE FIRE
Culture eats strategy
for breakfast.
Peter Drucker
US management consultant
(1909 –2005)Geert Hofstede
Born in 1928 in Haarlem, the
Netherlands, Geert Hofstede
went to technical college then
gained an MSc in mechanical
engineering from Delft
Technical University. He
spent two years in military
service with the Dutch army,
before going into industrial
management and beginning
a PhD. In 1965, while studying
part-time, he joined IBM and
founded a personnel research
department. His years at IBM
were to prove formative; the
data and insight gleaned there
formed his research base and
his “bottom-up” view of
organizations. Hofstede
became a professor of
management in 1973, and was
named one of the world’s most
influential thinkers by the Wall
Street Journal in 2008. The
ideas in his 1980 book Culture’s
Consequences continue to
inform global debates on
organizational culture.Key works1980 Culture’s Consequences
2010 Cultures and
Organizations: Software
of the Mind