Ideas in Action

Why Organizational Culture Matters for Your Mission

This story may or may not be true, but Gail Berger, Clinical Professor of Management and Organizations at the Kellogg School of Management at Northwestern University, finds it useful to explain how organizational culture develops.

A woman was preparing a pot roast for her family’s dinner. Before she put the meat in the pan, she cut both ends off. Her young daughter asked, “Mom, why do you cut off the ends? Does it change the taste? It seems wasteful.” The woman thought for a moment and explained that this was what her mother had always done. But her daughter’s question made her curious, so she asked her own mother why she had always cut the ends off her pot roasts. The woman’s mother said that it was because it was what her mother had always done. Wondering if this was some magical cooking secret no one else knew about that somehow improved the taste of the pot roast, they consulted the grandmother. “Well,” the old woman said, “when your father and I were first married, I only had one small pot, and to fit the roast inside, I had to cut the ends off!”

Many organizations are like this family and their pot roast recipe: People behave and interact with one another in a certain way because that’s the way their predecessors behaved and interacted with one another. They perpetuate these habits without ever knowing the reasons behind them or if these behaviors are helpful or maladaptive. They become a way of doing that embed themselves in the organizational culture.

What is Culture?

“Culture is rooted in three domains: what’s important, what’s not important, and what we value,” says Berger. “It’s habitual. Often, we don’t even think about why we’re doing what we’re doing.”

Berger likes to compare organizational culture to an iceberg. At the very top, above water, are the most obvious behaviors and artifacts of that culture: office dress codes, logos and designs, organizational customs and rituals, language and acronyms.

Just beneath the surface lie the reasons these behaviors exist: the underlying values that specify the rules of appropriate behavior, the distinctions between right and wrong, and what’s important and not. And beneath that are the underlying cultural assumptions that provide the basis of those values.

It can be valuable to stop and consider those layers of values and assumptions beneath the surface and whether they manifest themselves in behaviors that are helping or hurting the organization. To continue the pot roast metaphor: Why waste good meat?

An Organization’s Culture Should Reflect the Brand

In many cases, an organization’s culture becomes its brand.

“A brand is the story you’re trying to communicate to people,” says Berger. “You want people to understand what’s important to you as an organization.” It is a promise to deliver a specific value or experience.

At Southwest Airlines, it’s the custom for a “Cultural Blitz” team to travel around the country and do nice things for employees, like giving flight attendants a break by taking over airplane-cleaning duty. The purpose is to demonstrate the value of pitching in: If the organization makes an effort to help employees, the employees will, in turn, make an extra effort to help both each other and the customers. This tracks with the image Southwest projects to the outside world: the image of an airline that not only goes the extra mile to help customers but also does it in a friendly and practical manner.

For a nonprofit, a value alignment between the organization and what it stands for is particularly important. Stakeholders — including employees, donors, board members, constituents and members of the community — want to see the organization back up its purported values with real action.

“People are more likely to donate to an organization with value alignment,” says Berger, “and to be a part of it because the organization is practicing what it preaches.”

Misalignment Can Impact Your Clients, Donors, and Brand Image

An organization whose behavior is misaligned with its mission, by contrast, can drive people away. One fairly common example, says Berger, is an organization that claims to value collaboration yet it only rewards individual contributions.

Or take the case of Aetna. In 2000, the insurance company was flagging financially. A new CEO took a survey of his employees and discovered that the majority were depressed by a deeply entrenched culture of risk-aversion and mediocrity that valued managing the cost of claims over actually helping people. The CEO decided to restore his employees’ pride in the organization by re-embracing Aetna’s commitment to its customers. It worked: Within five years, Aetna’s finances had perked up, and internal surveys showed that, despite layoffs, employees were feeling more invigorated.

This shows that it is possible to fix a misaligned culture, Berger says, and there are tools available for organizations to evaluate their own cultures and determine whether the culture truly represents its values.

Tools to Build the Culture That You Desire

The first step is to find out what people believe is the organizational culture. Berger suggests the Cultural Alignment Framework, a matrix of eight different cultural styles aligned along two axes: people interactions within the organization and how the organization itself responds to change.

These are styles, not judgments, Berger emphasizes, and each has its pros and cons. A nonprofit that chooses to focus on its purpose or mission, for example, has an increased sense of diversity and social responsibility. On the other hand, its leaders may tend to ignore practical concerns, like running a business. This “Purpose” style culture thus has pros and cons.

But it is useful for an organizational leader to see how an organization’s actions conflict with its values and then make necessary changes. Because change, as the cliche goes, comes from within.

To put these changes into practice, Berger recommends what she calls the “Stop Start Continue” method.

“Look at the behaviors that are misaligned with cultural values,” she says, “and stop doing them. Then start thinking about behaviors that you can add to your repertoire that could be culturally enhancing. Because not everything you do is wrong. There are things that you’re doing that are right. Continue doing that.”

For the maximum impact, leaders should talk to as many members of the organization as possible, in every department. Every culture has subcultures with their own ways of doing things. “The more you understand the whole cultural landscape, the better off you are,” Berger says. “Listen and pay attention — not always with your ears; listen with your eyes, your heart, and your mind.”

A cultural change — especially one that addresses not just behaviors, but the underlying assumptions and values behind those behaviors — takes time, but Berger believes it’s worth it. After all, wouldn’t it be better if everyone got a little more pot roast?

Dr. Gail Berger is a Clinical Professor at Northwestern University in the Kellogg School of Management, the McCormick School of Engineering, and the School of Communication, and the Deputy Director of the Center for Executive Women at Kellogg. She is also an experienced executive coach and leadership development expert who is passionate about helping leaders and teams achieve their goals and improve their performance and effectiveness.