How Successful Leaders Use Culture To Influence Behaviour

The following is a guest piece by James O’Toole.

Increasingly, business consultants, scholars, and executives are coming to the conclusion that culture is the prime driver of organizational performance. Despite the prevalence of that point of view, however, there’s little agreement about what culture is or what it entails.

You can’t see it, touch it, or measure it, yet culture is said to explain why some companies fare better than others. The authors of the year’s three best business books on culture, one of which is a novel, explore the elusive subject from widely divergent perspectives, but all end up confirming that it is the single most powerful influence on how people behave in organizations.

A Leader’s Insights
In “Joy, Inc – How We Built a Workplace People Love”, Richard Sheridan, cofounder and CEO of software design firm Menlo Innovations, delineates the practical steps he has taken to create and maintain a corporate culture that makes people “excited to come to work every day.”

The most innovative—even radical—of Menlo’s practices is the pairing of employees (in the main, software programmers): “Two people sit together at one computer working all day on the same task at the same time,” explains Sheridan. These pairings are rotated weekly, so eventually every employee at this midsized firm works intimately with every other one.

Sheridan makes a strong case that this seemingly expensive and inefficient practice actually increases organizational productivity, learning, innovation, and quality, while reducing stress and fatigue.

Other ideas include having the paired employees describe their projects to the entire workforce at “Lunch ’n Learn” sessions, putting clients on Menlo teams, replacing rules and bureaucracy with rituals and storytelling, and holding daily “stand-up meetings” in which all team members quickly describe “what they are working on and where they might need help.”

Certain programs and policies are also aimed at making Menloians feel that they are members of a supportive community. For example, new parents can bring their babies to the office, where fellow workers are said to bounce crying infants when their moms and dads are busy at work tasks.

An Anthropological View
Culture has long been the purview of anthropologists, but oddly, there are no previously published books that I can think of that offer an anthropological perspective on corporate culture and change.

Into the breach step Malachi O’Connor and Barry Dornfeld, anthropologists with University of Pennsylvania Ph.D.s in folklore and communication, respectively, who turned their attention to the study of corporate culture.

In their manager-oriented manual, “The Moment You Can’t Ignore – When Big Trouble Leads to a Great Future”, they ably explain “how culture drives strategic change.”

The anthropological perspective on culture and change is long overdue because, as the authors note, “behavior is culturally prescribed.” Thus, they address the issue of changing a company culture at its root level: the behavior of its employees.

Starting from the familiar premise, attributed to Peter Drucker, that “culture eats strategy for breakfast,” O’Connor and Dornfeld offer useful advice on how to deal with the human side of strategy implementation: getting employees to accept needed change.

The Novelist’s Take
High-tech company the Circle is the brainchild of novelist Dave Eggers and the setting for his best-selling novel of the same name. The events in “The Circle” occur in the future, but just barely so: Even geezers like me might live to see the day Eggers describes.

The genius of the book is that Eggers extends Silicon Valley’s existing technology and organizational practices no further than to their next logical steps (imagine Google on steroids), and only at the conclusion does he move to the illogical and chilling end to which they may be heading.

If the Circle were a real company, it would sit atop Fortune’s list of the 100 Best Companies to Work For with its platinum medical insurance, free gourmet lunches, health club, laundry service, pet sitting, luxury commuter buses, and the Menlo-like opportunity to be creative and learn on company time. The purpose of these perks is, of course, to encourage employees to spend more time working productively, and less time managing their personal lives.

But the fictional company doesn’t stop there. It elevates these goodies to the next level, satisfying not only employee needs, but also their wants, with first-class live entertainment, boozy parties, on-campus housing, a sense of community and social purpose, and even, dare I say, a dollop of joy.

As in Plato’s Republic, creating such a well-ordered organization ultimately requires its members to abandon their freedom to Guardians who “know better than they do” what is good for them, because, as the Circlers assert, “We are the future.”

In the end, the Circle develops a culture of arrogance in which those who disagree with the brave new world that it is bent on creating are dismissed as being on “the wrong side of history.”

Yet the novel is not an anti-technology, anti-business diatribe. It is a premonitory tale about the potential consequences of well-intentioned corporate cultures run amok. Eggers calls attention to the fine line between the compellingly powerful cultures found at places like Menlo Innovations, on the one hand, and the 21st-century equivalent of the corporate paternalism that spawned company towns and captive workforces a century or so ago, on the other.

Although fictional, The Circle is the best business book of the year about corporate culture because it raises ethical and philosophical questions that are not, and cannot safely be, raised in many companies—and not just high-tech ones.

James O’Toole is a longtime contributing editor to strategy+business and a senior fellow in business ethics at Santa Clara University’s Markkula Center for Applied Ethics. He is the author of 17 books, including “Leading Change: The Argument for Values-Based Leadership”.

This is an abridged piece from strategy+business’s Best Business Books 2014 featuring selections on a number of topics including strategy, marketing, innovation, and organizational culture. To learn more about the Top Picks in business reading from strategy+business, check out their article “Best Business Books 2014”.