How (38 page)

• Self-governing cultures find their engine of behavior in values and principles. Values and principles are the source of inspiration, and when we are guided by them or acting on their behalf we believe in what we are doing and find significance within the effort. On the spectrum from internal to external behavioral control, self-governance relies on the internal resources of the individual for much of its power. Authority accrues to individuals in accordance with their alignment with group core values, and the emphasis throughout the group is on personal enfranchisement and individual accountability. People joined together by common inspiration and shared core values form tight, unconditional bonds, unlike the lighter, conditional bonds of carrot-and-stick cultures. Organizational structure in self-governing cultures is tightly integrated—flatter, if you will—and the synapses between individuals and teams operate in a state of high trust. Self-governance requires universal vigilance; in self-governed groups, the responsibility for one’s own and others’ behavior becomes the job of everyone on the team. (As Thomas Jefferson, one of the crafters of the U.S. Constitution and no stranger to the concept of individual liberty, said, “The price of Freedom is eternal vigilance.”
⁷
) Acting on shared beliefs makes everyone self-regulating with regard to both company priorities and external control. At GE/Durham, for example, no one has a “boss”; everyone is one. “I have 15 bosses,” reported Keith McKee, a team technician. “All of my teammates are my bosses.” With everyone accountable for the team’s success, no one tolerates slacking; the culture becomes self-enforcing and feedback becomes the name of the game.

How We Relate

The third HOW of culture describes the dimensions that govern and influence the interpersonal synapses between members of a group: the roles and types of skills that each person manifests, the group’s approach to developing those skills, the level of trust that fills the decision-making process, the group’s relationship to doing the right thing, and the nature of the relationships between employees, customers, and suppliers—basically, how we all get along.

• Blind obedience cultures delegate little power down the chain of command. They fill their ranks with followers and workers who often feel subjected to heavy inspection of their efforts by bosses. Stiff penalties keep the rank and file marching in the lockstep necessary for the endeavor to move. Suspicion often fills the relationships between co-workers; the mercurial nature of autocratic leadership leaves few feeling secure in their positions. The same suspicion is directed outside the organization’s fortress walls at customers and suppliers, the former also viewed with suspicion and closely monitored, and the latter kept at arm’s length. Partnership with outsiders is anathema in these cultures, so people tend to be transactional in nature and short-term in orientation.

• Cultures of informed acquiescence make individuals into managers of job function, consistent with its strict, hierarchical approach to organizational structure. Personnel development is achieved through a training approach to carefully tailor information to specific function and expertise. Emphasis is on performance and performance management. To develop yourself in informed acquiescence cultures, you would read a book called
The 14 Steps to This
or
The 50 Rules of Great That
. Trust flows between people as it is earned, but is often restricted by a system of checks and balances that keeps managers accountable for their underlings. These carrot-and-stick cultures reward honorable work consistent with company directives. This is capitalism as we know it, with customers and suppliers more often seen as vendors and suppliers than partners. Contracts rule external relationships, with lots of requests for proposals (RFPs) and multiple bids for services even when proven supplier relationships exist. These approaches strive for fairness and impartiality, and often achieve it within a controlled framework.

• In self-governing cultures, the role of every individual is to lead and be a leader. Each individual is called upon to make more values-based decisions, so people need the education and, more important, the experience of wrestling with issues and coming to their own conclusions. Rote learning and training approaches fall short of giving them the tools they need to be self-generating. This book, in many ways, takes an educational approach to HOW. It gives you few rules of thumb or exercises to impart its knowledge, but rather tries to lay out the broad picture of the issues it addresses and stories that illuminate the many ways the concepts can be applied. It might make it a little harder for you, the reader, to get quick and easy answers, but it does give you a perspective and knowledge from which you can evaluate things for yourself, a lens through which you can view the myriad and quick-changing events that make up a business day. In self-governing cultures, there is no one way to take the TRIP; to become self-governing is a continuous evolution unique to each individual and group. Someone can point the way, but you must traverse the hills (and spend some time in the Valley of C) on your own.

Self-governing cultures are high-trust cultures. As Paula Sims’s experience at GE/Durham demonstrates, behaviors that sent signals of distrust undermine the enfranchisement of the individual. Trust begets trust, and the opposite is also true. In return for trust and autonomy, relationships between members of the group recognize the implicit social contract and include the greater good. Likewise, suppliers and customers are embraced as partners; mutual collaboration and improvement become the rule with suppliers, and added value the goal with customers. The language of values that drives these cultures can inspire behavior above the floor of contracts and agreements, adding the capacity to delight customers and exceed expectation in every relationship.

How We Recognize

The fourth HOW of culture is simply the way culture tends to reward achievement and discipline transgression.

• Blind obedience cultures, obviously, reward conformity and/or obedience. Supervisors, at their whim, mete out punishment, and the arbitrary nature of the discipline creates fear, which keeps people in line.

• Informed acquiescence cultures take a far more rational approach and attempt to create clear rules and standards by which reward and control are exercised. The rewards accrue to those who achieve individual or organizational success.

• Self-governing cultures reward those who further the mission and significance of the enterprise, even if it might cause short-term financial loss. That is because the interpersonal alignment that makes these cultures successful is more valuable in the long run than a short-term opportunity. Preserving this alignment allows the culture to be largely self-policing, with deviation from common values met by the stigma from peers and that sense of betraying oneself we spoke about earlier.

The HOWs of celebration—who gets the awards, who gets featured in the company newsletter, who is feted by the team at the annual retreat—are often overlooked in group cultures, but they are vitally important to the nature of culture. Companies that want A, however, often reward B. My friend Steve Kerr, former chief learning officer at GE and Goldman Sachs, first wrote about this phenomenon more than 30 years ago in an article for the
Academy of Management Journal
called “On the Folly of Rewarding A, While Hoping for B.”
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“I built a nice little model that illustrates the effect of a reward system on culture,” he told me one day. “If you take a chance based on the best information available and you get it right, you get a
small
reward. If you take a chance based on the best information you have and you get it wrong, you get a
medium-sized
punishment. If you take
no
chance, and just go along with the boss or go along with the majority, you get a small reward. So what would you do?”
⁹

I had to think about it a moment; then I did the math and it became clear: Taking a chance and getting it right gets you about the same size reward as taking no chance. Taking no chance avoids the possibility of getting it wrong. “In such a system,” Steve concluded, “you end up with tremendously risk-averse behaviors. The leaders, lacking self-awareness, don’t realize they’ve caused this, and they complain about their ‘gutless colleagues’ who take no chances. But the culture flows from the rewards and punishments in place.”

A recent WorkTrends study by Gantz Wiley Research revealed the deep schisms that lie at the heart of many business cultures. While six in 10 respondents believed “My company’s senior management supports and practices high standards of ethical conduct,” only a third felt that “Where I work, people do not get ahead unless their behavior clearly demonstrates my company’s values.”
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A Workplace 2000 Employee Insight Survey revealed that, though workers want their work to make a difference, 75 percent of them do not think their company’s mission statement has become the way it does business.
¹¹

Charles Hampden-Turner, who works with companies the world over on issues of culture, told me a great story about Hewlett-Packard (HP), a culture that, until its board scandal, was famous for getting its HOWs right. “My friend Carl Hodges at Hewlett-Packard got a gold medal for defiance from Dave Packard, the head of the company,” he told me. “HP was doing R&D for the Apollo lunar landing module, and Packard wanted it out. ‘I don’t want to see it again,’ he told Carl. So Carl got it out of research—he put it into production. And Packard was really upset with him. Later, he relented and supported the project, which allowed the descent on the moon and made a mint of money for HP. So Dave Packard gave Carl Hodges a gold medal for defiance, and he delivered it in front of everyone, so everyone knew that he was wrong and Carl was right.”
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How We Pursue

We have agreed that groups come together to achieve a higher goal, one greater than individuals can achieve alone. The final, and perhaps most important, HOW of culture deals with the dimensions that express
why
we do what we do, the nature and purpose of our efforts. Foremost among these dimensions is our relationship to time.

• Individuals working within a blind obedience culture find success in a short-term relationship to their efforts. They are generally task-oriented, and spend little time considering the future or the long-term implications of their endeavors. If your short-term focus is on conquering and controlling as much as you can, you feel little compulsion to consider the long-term effects of your pursuits on resources, physical or psychic. Blind obedience cultures pay little attention to the market as a whole or the public dynamics of their interactions; they follow their leaders and go where they are told. Leaders tend to view power and success as achievable though control, and anything that gets in the way of that effort—government regulation or public opinion—is just an obstacle to be conquered or avoided whenever possible. This leads to all sorts of back-room dealing and hostile approaches to competitors.

The mission and purpose of cultures like this is survival, and the members of the group are generally coerced into the journey. Little in blind obedience cultures concerns itself with transcendence, and the pursuit of significance is largely absent from everyday endeavor. This is human doing, not human being—execution, not pursuit. A short-term temporal orientation is not unique to industrial age efforts. An Internet start-up, or similar such new enterprise, struggling to gain a foothold in a fast-changing landscape can find itself in a similar relationship to time. The race to obtain funding or appease the financial market might bring this same cultural dimension into play, causing people to ignore the long-term ramifications of their choices in favor of getting it done
now
. Unless these efforts can be seen within a longer-range goal, some of the forces of blind obedience can seep into even the most well-intentioned cultures.

• Informed acquiescence cultures attempt to balance short-term orientation with long-term goals. Long-term goals key them into the market and create a great sensitivity to public dynamics, so these cultures are highly responsive to the needs of the marketplace and react quickly to changes and new demands. Carrots-and-sticks approaches motivate people internally, and the culture responds to regulatory and legal requirements in the same way, looking for ways to dance with the rules in order to gain the maximum amount of carrots. Informed acquiescence cultures are compliance cultures, with specialized compliance officers attempting to regulate behavior through rewards and penalties. Thus, the pursuit of goals is always subject to external scrutiny and the limiting nature of rules-based approaches. Informed acquiescence cultures are on a journey of success. They reward achievement and measure that success by the financial return of their endeavors.

• Self-governing cultures, in order to achieve the close values alignment required for real cohesion, necessarily think about the long-term. The culture must be driven and defined by the legacy and endurance of the enterprise and its quest for significant goals. It must keep one foot always in the future to inspire common pursuit in its highly trusted individuals. This future orientation puts self-governing cultures ahead of the time curve in many areas. It creates the conditions by which they can lead and transcend the markets, and, because of the
should
nature of values-driven endeavors, it creates a proactive and preventative relationship toward regulatory and legal requirements. Self-governing cultures coalesce around mission, promise, and the pursuit of significance, a journey that is, in many ways, its own reward.