Why culture is more important than structure in organisations
TEARING MY HAIR OUT...
I'm going to start with a story. I once had a government client with whom I spent months looking at one of their delivery programs. To anyone who knows our Reinventing Organisations approach, I'd call the organisation very "amber".
My final conclusions were fairly challenging - I could see a raft of issues affecting almost every piece of the program, including being unclear on its purpose, not having a rationale for how to create change, and many, many more. I presented a long final report full of program-changing findings, and the bureaucrat started by saying "Well, Dean, my biggest problem is that I can't see my new team structure in here anywhere." With all of the issues in the program, I couldn't even see why this was a priority (I had flagged it as a horizon 2 or 3 on the implementation schedule). I shrieked and ran out of the office, tearing my hair out as I headed for the lift.
I learned a lot from that client about working much better with amber/orange organisations, but it cost me a lot of hair...
PRIORITISING CULTURE OVER STRUCTURE
Since that day, I've worked with many organisations like the above who care deeply about structure, policies, procedures and incentives. Part of my learning was to "gentle" amber/orange organisations into understanding culture as a concept (its amazing how little it is on the radar of some orgs, after all of this time).
Culture is king. I explain that I've seen countless initiatives fail because of culture and behaviour, and that I rarely see things fail because a structure is wrong. However, people will usually reach for the tangible levers, not the amorphous, intangible ones.
Generally people will work across boundaries and structures in the right culture, but a fancy structure won't make up for all of the defecits of poor culture. I've seen organisations plan re-structures for years, and yet decimate their productivity by ignoring their people and culture.
THE MARGINAL GAINS CASE STUDY
I was recently listening to a great Freakonomics podcast about incrementalism, and one of the examples was an approach developed by Sir Dave Brailsford called Marginal Gains. Brailsford is responsible for the success of both Great Britain and Team Sky - two now-behemoths in the world of competitive cycling.
Marginal gains as an approach seems quite simple. Break something into its component parts, understand them, and try to wring slight improvements out of all of them. Therefore, a 1% improvement in each area can compound to significant improvement overall.
As an example, (I'm not a cyclist) cycling can simplistically be broken down into cyclist, bike and complex parts. Cyclist variables can be further broken down into nutrition, hydration, cardiovascular fitness, infection control, body positioning, strength and conditioning, psychology (he has a great example of developing a "hunger index" to assess the drive of his riders) and several more. Bike variables include weight, drive chain design, tyre design, rider positioning, aerodynamics and several more. Finally, complex variables are those that are an interaction of variables, such as overall aerodynamics (rider and bike aerodynamics together), weather and environmental factors.
By making marginal gains in many of these areas, you can see how they would add up to quite an advantage. Cycling races can often be decided by 1/100th of a second.
AND, WE'RE BACK TO CULTURE
However, it isn't the actual improvements that Brailsford says are the most important. He says that people misunderstood the real value of Marginal Gains, as being about the next piece of psychology or technology that was going to give a competitive advantage. You know what was more valuable and important? Culture.
He says that Marginal Gains:
"Gave us a methodology and an approach which allowed the support staff and the riders to be of a similar mindset, and approach things in a certain way... I think people miss the tacit psychological component which created a mindset and a culture within a group which allowed the whole group to buy into something and have a collective approach."
There's lots of complexity about culture work which means that you can't use a cookie-cutter approach, and we don't. However, one of the great criticisms I have of organisations is that many don't have a clear and decisive strategic intent which drives a useful culture. Notice I said "useful" - culture has to serve what the organisation is trying to do.
I have seen organisations where their culture works against a new strategic intent (such as empire-building and power games working against collaboration), or where there was little to no strategic intent, and as a result culture was left to fester and become toxic on its own.
A CAR THAT CAN'T DRIVE ISN'T USEFUL AS A MODE OF TRANSPORT
My metaphor here for my clients is a car - you have to have a car that can take you where you want to go. It's not useful to set your sights on a trans-continental destination when your engine is grinding down - your vision will far outlive your vehicle and leave you limping down the road, short of your destination with bloody feet.
The tension is paying attention to your vehicle's health AND your destination - the two are essential to each other, and you can't have one without the other. But your vehicle is your culture (engine) first, not your structure (that would probably be the paint, or the leather interior, or the music you choose for your road-trip).