Thursday, 20 May 2010

Harness culture or lose it

I was recently conducting a coaching session with a leader who has a demanding bureaucracy, who is not good with people, who blames others and who seeks power. I could not help but think about the impact he was having on his business slowing down. I did tell him to stop ‘being the best in the business’ and start ‘being the best for the business’.

I have done a significant amount of work with organisations to understand employee engagement and I often reference entropy as the angst or frustration that has been allowed to build up in the business. We often find four causes of cultural entropy:
•A lack of alignment between the organisational purpose and the individual understanding of that purpose
•A disconnect between the organisation’s values and behaviours as stated by the business leaders and the operating systems within the business
•A difference between the values of the group/teams and some individuals operating within them
•A leadership group that is dysfunctional in their stated values and the way they operate or behave.

We look to measure in many of the tools we use the levels of culture within a business and the cultural climate when assessing the dynamics of potential change and its implications for performance. Here are some of the dynamics we tend to include when assessing culture:
1. Uniformity. All cultures change over time, although the rate of change may not be uniform across (or even within) cultures.

2. Complexity. The direction of such change is always toward greater complexity. At some point--perhaps due to some triggering event--the rate of change (and, hence, the complexity of the culture) will steadily increase.

3. Increase. The complexity of a given culture, combined with the increasing rate of change, will eventually reach a point at which the culture will be unable to sustain itself in a coherent manner.

4. Entropy. The culture, no longer able to function effectively, disintegrates. In the greater scheme of its relations to other cultures, it is no longer able to interact as a unified state.

5. Absorption. The entropic culture's constituents, being human, require a certain amount of social structure or meaning in their lives.

I was reading Eric Beinhocker’s The Origin of Wealth and I was remembering the passage he uses from Proust “the real voyage of discovery consists not in seeking new landscapes but in having new eyes”. When we describe cultural entropy, we are typically referring to the amount of energy an organisation consumes in meaningless or unproductive work. Cultures can lose energy, too, which is why the Egyptians don't build pyramids any more. We often find that scale plays a very important role in entropy - roughly speaking, the larger a system or institution, the more opportunity for wasted energy. This applies to governments, corporate bureaucracies, large organisations, religious movements, green movements. Part of this is due to the fact that as a system becomes larger, a proportionally greater amount of energy has to be devoted to keeping the system alive rather than doing what the system is meant to be doing.

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