Designing organisational culture

Continuing the alternate week pattern of posting chapter extracts from the forthcoming third edition of my book “Guide to Organisation Design,” this week’s extract is an edited section taken from Chapter 9, Designing Culture.  Next week will be a discussion related to this chapter.

Designing organisational culture is difficult as it is in constant movement by virtue of random human interactions.  These interactions are embedded simultaneously in, not one but three key, cultural contexts, each with their own artifacts, espoused values and tacit assumptions related to:

  • A national culture
  • An occupational culture e.g. accountancy or software development which can be internal/external or both
  • A social culture e.g. a shared interest group or a friends’ network which can be internal/external or both

The way in which these interactions occur, and the extent to which they can and cannot be shaped are significant factors in an organisation’s culture.  

National culture

Partick Collison, co-founder, Stripe, mentions three aspects of his Irish background and Irish culture that shape his thinking on Stripe and its culture:

  • Ireland is very outward looking
  • Ireland has had very high rates of immigration
  • Irish culture places a lot of importance on just a kind of warmth

In Collison’s statements the three levels of culture, described by Edgar Schein, are evident – here showing at a national level.  The artifacts i.e. systems and processes that allow for high rates of immigration.  The espoused values that globalisation and open borders are good. And the tacit assumptions around warmth, interpersonal dynamics and helping people feel at ease.

Many other aspects of national culture shape organisational culture – language is one.  2020 – the year of Covid-19 brought an influx of new words indicating dramatic cultural shifts. Oxford Languages, customarily produces a ‘word of the year’, but for 2020 was unable to do that, instead producing a report with tens of new words.

These national societal changes reflected in language use were matched in organisation design work by the need, for example, at the artifact level to develop remote working policies and protocols, and learn how to manage fluctuating workforce numbers as employees had to self-isolate or caught Covid-19.  At the espoused values level many employers developed wide ranging health and well-being programmes to help staff manage their lives.  And at the tacit assumptions level workforce members unconscious attitudes to contagion had to be factored into workplace design and working practices as people returned to face-to-face working.

National politics is another external cultural factor that impacts the culture of organisations.  For example, in 2021 China’s tech firms reportedly started testing software that allows them to continue to track iPhone users in spite of Apple’s iOS 14 privacy update which forbade apps from gathering user data unless they had been granted explicit consent to be tracked.   In this example the artifacts of tracking and tracking ‘ownership’ are evident, as are the espoused values on whether or not tracking should be allowed – in this instance a national government at odds with a tech company, and the multiple and varied tacit assumptions around tracking are all in play.  

Looking at cultural factors in the external context that help shape an organisation’s culture highlight the difficulties of making good on a statement ‘we must change our organisation’s culture’.   Organisation culture change (redesign) is always subject to uncontrollable factors in its external context.

Occupational culture

Within most organisations there are groups of people from similar disciplines. Often, they identify as belonging to a ‘job family’ i.e. a grouping of jobs related by common role content, that requires similar knowledge, skills and abilities.  Typically, the job family will have a fairly clear career path and pay structure, that differs from that of another job family. 

One example of occupational cultures comes from a report Culture First: how marketing effectiveness works in practice[1] that talks about the corrosive silos between marketing, financial and commercial colleagues, giving several reasons for this, including use of marketing terminology that is not easily understood by other disciplines and competing interests and objectives between disciplines, for example on decisions related to marketing investment.  The artifacts exist in the language of marketing and the systems and processes of it, the espoused values of all three disciplines discussed included good customer service, and the tacit assumptions revolved around what good customer service meant in practice, how good investment decisions are made, where good investment lies, and how language use served to stoke difficulties.   

Social culture

The informal networks of connections among employees create culture.  Over time it becomes a complex system of shared beliefs and behaviours, continually evolving to reflect the organization’s shared experience.  These connections cut across national and occupational networks, extending into shared interests or simply friendships. 

As an example, many organisations have running groups. These organisational interest groups not only meet face to face, in the running example, for training and group runs, but also meet on Slack or Teams, Whats App or similar channels, using the organisational and social media technologies to help build the network and the community camaraderie.

Additionally, many of the runners competing under their organisation’s banner are also runners in their local communities – belonging to clubs and groups there, thus extending the community of interest outside the organisation. 

Specific shared interest groups are not the only form of creating organisational culture creation, there are people who simply become friends through chance encounters at work. In whatever way the interactions form and evolve the informal networks created from these interactions have a profound, but often overlooked, influence on organisational culture.  Again, these networks extend out of the organisation and into the external world and from the external world into the organisation.

The pandemic impacted roles that were previously workplace based but then moved to remote working.  Employees in this situation found they had to rapidly adapt to the new mode.  Without the ability to interface, network, schmooze and even chat idly about the weather, many started to feel adrift during this period of indefinite remote working, especially at larger companies with more diffuse networks or if they were new joiners to the organisation.

With the knowledge that remote working was feasible for many and did not negatively impact productivity, came suggestions that a hybrid working patterns would become common, with employees working from home a percentage of their time and in a workplace a percentage of their time.   Related to hybrid working patterns came challenges to traditional 09:00 – 17:00 set hours contracts – the prevailing view being that contracts should focus on agreed outcomes the role and not on hours worked.

Covid-19 adaptations impacted not only office-based roles, but also proximity-based roles, for example in roles with on-site customer interaction e.g. retail stores, banks, and post offices, medical care, personal care, leisure, travel, and hospitality/food service.  Many of these roles are being transformed by automating aspects of them, in order to reduce proximity and workplace density. 

Changes to working practices, on the pandemic induced scale, affect social interactions and informal networks at the artifact, espoused values, and tacit assumptions levels. 

Covid-19 impacted many of the artifacts of social interaction as face to face, sometimes random, and sometimes planned real time social interactions transformed to virtual and often asynchronous forums for meeting.  This had both positive and negative effects. 

Positively, people were able to extend their networks, develop new friendships and participate in communities on-line.  Negatively, where meet-ups were face to face they were constrained by social distancing and face mask wearing, the latter causing particular difficulties in picking up the social cues of facial expressions, lip reading, and hearing speech clearly.  

These shifts in the artifacts of social context have organisational design and culture consequences.


Image: Source unknown.