How to create the 'right' culture

Academics Matthew Baldwin and Thomas Mussweiler explain why one size doesn't fit all when it comes to organisational culture.

by Matthew Baldwin and Thomas Mussweiler
Last Updated: 05 Nov 2018

We have a fundamental tendency to look to others for social cues about what to think, and how to feel and behave. This has enabled humankind to thrive in a highly volatile, complex and increasingly interconnected, social world.

But Elon Musk’s SpaceX is not valued at more than $20 billion because he fixated on what others have done in space. And without Steve Job’s visionary ‘Think different’ campaign, the iPad might still be the stuff of fiction. Real innovation requires ‘loose’ mindedness: diversity of thought, freed from the constraints of comparison and groupthink.

We now understand much more about what drives social comparison, and why some of us can break free from it more easily than others.

People living in ‘tight’ cultures – with very clear social norms, powerful authority figures, and harsh punishments for deviation – are more likely to compare themselves with peers as a benchmark for how they should think, feel and behave, than those living in ‘loose’ cultures – where behaviour is not so tightly regulated and sanctioned. And our research also finds that job interviews in the workplace, are among the tightest situations we experience.

We studied differences in culture between US states, but ‘tightness’ and ‘looseness’ extend right down to the individual situations we experience, and the cultural bent we each bring to the table. And this is where it gets interesting.

If you want Musk-style innovation you may need to create a loose culture where – at least your R&D team – can explore, without having to conform to old rules or fear failure and punishment.

If you’re a start-up, creating a loose culture may be part and parcel of the enterprise. But, if you’re operating in an unpredictable, high-risk industry like stock trading where one failed experiment could cost you millions of dollars, or you’re Coca Cola and you’ve already capped the market, the incentives to deviate from rules and authority figures are few and far between. And as long as that’s the case, it is likely that outliers will be punished and it will be difficult to create truly diverse teams.

The Holy Grail is likely to be somewhere in between. And it starts with knowing where in the organisation your culture is tight, and where it’s loose. Both serve a function.

Diversity of thought and groupthink are often unhelpfully presented as mutually exclusive. The reality is that they are two ends of the same spectrum, and most businesses need both. The best businesses will ratchet between the two, varying culture by department according to the desired result.

Take your accounting and legal departments for example. Here conforming to rules and regulations is pretty important if you don’t want to find yourself on the wrong side of the law – you need a well-oiled machine, and that probably needs tightness. Your R&D team however needs to be at the other end of the spectrum with low conformity and high diversity of thought. Get an overly tight culture in this team with members too concerned about towing the line, and you’re unlikely to get much meaningful new territory explored.

If you think you have too much tightness, there are several ways you can go about allowing diversity to thrive, while preserving close knit teams. Here are two possibilities.

The first has to do with organisational architecture – dynamic leadership, matrix and flat management structures can all help to reduce tightness by relieving the sense that the rules are set in stone or that they are meted out by one powerful figure in the organisation.

The second works by getting teams who would typically engage in a high degree of benchmarking, to focus on similarities rather than difference. By encouraging the team to coalesce around a collective vision or mission and by focusing on what makes everyone similar versus focusing on those few who are different, the ‘boundary’ of the group grows to include everyone. In psychology we call this a superordinate group. When applied, it can increase group cohesion and reduce prejudice, among other things.

Altogether you could speculate that an optimal organisational culture might be one that is horizontally collectivist – loose in its rules, norms, and structure yet close-knit in its interpersonal relations. Creating this culture can be done, but it requires careful study of the dynamic interactions between the people, settings, and the broader cultural practices that permeate everything we do.

Matthew Baldwin is a postdoctoral researcher at the Social Cognition Center at the University of Cologne. Thomas Mussweiler is Professor of Organisational Behaviour, London Business School.

Image credit: Magda Ehlers/Pexels

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