In the previous Thursday Theory Tips blog we mentioned that when processes get repeated enough times and are followed by assumption rather than explicit decision this becomes an organization’s culture

Cultivating company culture is crucial to management. As organizations grow larger and managers’ responsibilities expand they can’t possibly make every decision in the company, and must therefore increasingly rely on their team to make the right decisions for them, decisions that will align with management and company goals. These decisions are made based on culture

But, what is culture? 

Many times we confuse an organization’s culture with its visible manifestations. For example, how people dress, what happy hour is like (if there is a happy hour), or how people disagree with each other are all manifestations of culture, but they aren’t actually culture itself. The late MIT Sloan School of Management professor, Edgar Schein, described culture best. By his description culture is a property of a social unit whose members share a significant number of common experiences in successfully addressing external and internal problems. What this means is that culture forms from how team members successfully and repeatedly address problems.

A strong culture is a powerful tool that managers can use to ensure consistency within the company. But by this definition we know that culture, even strong culture, is dynamic. It changes with new experiences. 

This isn’t necessarily a detriment to management. If culture never changed then organizations would fail when facing new types of challenges. A new challenge often requires a new strategy and new decision making that may not necessarily align with what members of the organization had previously developed through prior successful work.

But, although change is inevitable, if managers want to keep relying on culture as a management tool, then the key lies in managing its evolution . 

Managing culture

There are generally four instances in which understanding, creating, and managing culture is most important. 

  1. When a manager first joins a new organization.
  2. When one organization acquires another.
  3. When a manager is coordinating the efforts of different functional groups within the organization.
  4. When the manager needs to change the organization’s strategic direction, and by implication, its culture.

First, when a manager first joins a new organization and doesn’t understand the cultural assumptions they can feel alienated, rejected, maybe even unproductive. And if they blindly adopt the company culture in a “wholesale” fashion, then the new manager still loses because then they won’t be able to help the organization see things differently with the fresh and new perspective they might have been brought in for. So to understand culture as a new manager in a new organization, managers must study the following characteristics in the group they’re trying to understand: inclusion factors, power structure, reward and punishment systems, and past problems that have been repeatedly confronted and successfully addressed.

Second, when one organization acquires another, sometimes cultures, made up of processes and business models, are not compatible and one could unintentionally “eat” the other one. If processes and business models are wiped out on purpose that is fine, but if that is not a manager’s intention then to avoid this they must do some work before the acquisition. Before acquiring a new organization managers must carefully study, first, their own company culture, both its capabilities and disabilities, and then study the same of the company they’re interested in acquiring to determine the viability of a match.

Third, when a manager is coordinating efforts for different functional groups within the same organization that doesn’t necessarily mean the different groups will flawlessly work together. Different groups, even within the same organization, have different cultures because they address different tasks, and because they often maintain their identity by contrasting themselves with surrounding groups. That is why for a manager to effectively manage work between different groups they must facilitate communication between groups by first making sure they understand that each group may be approaching tasks with different assumptions. Once groups understand that they may be on different pages, then effective communication can begin.

Fourth and finally, when a manager foresees a future problem and knows they must change their organization’s strategic direction they have to create the new culture now. To do this, managers should create a separate team of people and confront them with a new task, then let the team figure out the effective process for solving the new problem. If they succeed, managers should keep that team together and have them repeat the process multiple times. Then, rather than dispersing team members into the old organization, team members in the old organization can be moved, one by one, into the new one.

Culture is a secret weapon that allows managers to be more hands off and trust that their organizations will act consistent with its goals and mission. However, to rely on this secret weapon managers have to nurture it, shape it, change it when necessary, and then it’ll do the work for them.

For more of our Thursday Theory Tips, read:

Thursday Theory Tips – Who are your best customers?

Thursday Theory Tips – Is my business model working for me?


  • Sandy Sanchez
    Sandy Sanchez

    Sandy Sanchez is a research associate at the Clayton Christensen Institute for Disruptive Innovation, where she focuses on understanding and solving global development issues through the lens of Jobs to Be Done and innovation theories. Her current work addresses how individuals can use market-creating innovations to create sustainable prosperity in growth economies.