CulturePods: The Cultural Transformation Process

photo: “Maize Diversity” by CGIAR Consortium is licensed under CC BY-NC-SA 2.0

You can reshape a company culture in the same way selective breeding is used to create new types of organisms. For companies seeking to radically change their corporate culture, there is a science to cultural transformation. Basic, almost mechanical, steps can be followed to achieve large-scale change. And unlike traditional cultural change management approaches, the investment and risks to the organization for failure are small, particularly compared to the potential upside.

Here I outline the core psychologies of cultural learning that, if properly harnessed, can drive the adoption of specific desired cultural traits. With a skeletal team, these psychologies can be tapped to create epic changes through a process of cultural seeding.

Several times now, I have been asked, “how would you deliver a cultural transformation program?” Often the request accompanies an existing digital transformation process. Or it follows a digital transformation process when employees are not adopting the new platforms and workstreams.

I hear, “We want to be more agile” or “We want to embrace risk and fail fast.” With startups tapping bypass technologies and disrupting everything from retail banking to shaving, it is no wonder that organizations are champing on the bit to change. And one of the weapons in the startup’s arsenal is culture. Built newly from the ground up, startups have emergent cultures that map to the challenges of the ever-changing environment. Whereas legacy companies have cultures that are chained to a time and set of needs that frequently no longer exist.

alt school built its culture from the ground up with deliberation

Armed with good intentions and some degree of political air coverage, more often than not the person making the request has little clue of how to get from A to B. Everyone intuitively understands that real change from within an organization comes all-in, not piecemeal. Because culture is all-inclusive and because one component impacts all the other components, culture change can seem impossible. How to execute is a mystery. How can you change everything all at once?

As I have noted in Why “Corporate Culture Change” Fails, And How To Succeed, the folk-models of culture change do not work in large enterprises. Ideas like trickle-down culture from the CEO are fundamentally flawed once you understand and apply what we know about enculturation from anthropology. And “we” know a lot, actually. Just no one seems to know it.

THE SCIENCE OF CULTURE CHANGE

This is not the place for a comprehensive literature review of the state of knowledge of cultural transmission, but it is sufficient to say that a lot of research has been conducted in the space for many years. Scholars like Robert Boyd and Joe Henrich have built a robust body of work on the subject.

For whatever reason, the scholarship that has been done on the subject of cultural transformation in academia has not penetrated the work of consultants and MBAs. Often these domains do not cross-pollinate and operate in distinct markets. And academics most often are writing to their peers and not a larger general audience.

So it is no surprise to find that when it comes to the business of corporate cultural change, it is done mostly in the absence of the knowledge and frameworks that have been developed around the science of culture change.

To help bridge these parallel universes, here is a framework and process for corporate culture change that is based on the science. It is meant to help prevent organizations from embarking on costly culture change management implementations that are doomed to fail.

And note, as I have been asked several times this year, there is no case study yet. One of the ironies of people coming to me and saying they want a company that embraces risk, is that these same companies are incapable of adopting a slightly greater risk posture needed to embark on a culture transformation process. Quite the Catch-22.

So here is the underlying theory in a nutshell. Maybe your organization will have the appetite to apply it.

THE NUTSHELL

cultural learning shapes our behaviors

Culture is a powerful adaptation. For millennia, our evolved ability and predisposition to learn by taking direction and observing others, has driven the success of our species. These psychological capacities determine the spread of some cultures over others. By understanding and bending these psychological and cognitive predispositions, one can shape a specific culture much they way breeders use artificial selection to shape a breed of dog. An enterprise is no different.

It is not magic, but requires adherence to a step-by-step process. And it does not happen overnight. You cannot change the culture of an enterprise with 60,000 employees in 12 weeks, no matter how much money you throw at it. There is a certain cadence of culture change, slow to start; exponentially speeding up. This will all make sense once you walk through the steps and understand the model.

UNDERSTANDING THE RELATIONSHIP BETWEEN BIOLOGY AND CULTURE

There is a genetic/biological basis for cultural learning. But cultural learning escapes the constraints of biology. Language, texts, media — all enable the rapid evolution of behaviors decoupled from biology. What is essential to understand here is that we are born with the underlying biological predispositions, psychological predispositions that do not change for the individual learner. What are these base-line inclinations, or biases?

For one, people are predisposed to imitate the cultural variants of some people over other people. We imitate people who are prestigious and successful. Why? Well, it has been evolutionarily adaptive to adopt the variants of behavior one sees in others who are prestigious and successful. We live in complex systems where causation is often unclear. So the tendency is to just imitate everything a successful person does.

This is different from trickle-down culture from the CEO of a large enterprise in several important ways. For one, often the CEO often does not have a lot of prestige with the employees on the line. Power and dominance, yes. Respect, maybe. Prestige, not so much. See the following article for a discussion on the distinction between dominance and prestige. Also, most employees do not sample the behaviors of the CEO and the internal corporate communications often deployed are not good proxies from an evolutionary psychology perspective. In short, people over-sample prestigious people in their immediate social circles.

We also imitate the cultural traits that are most common in the population around us rather than imitate the outliers. Why is this adaptive? Well if there are two types of mushrooms growing in your pastures, and everyone eats one and does not eat the other, you can bet there is probably a good reason why. And given the high cost of individual experimentation, the tendency is to follow the wisdom of the crowd. It is no different in the office. If the day officially ends at 5 PM but no one leaves the office until 730PM, there is probably a good reason why.

is it safe? cultural learning increases our ability to thrive in the world

CULTURE PODS

All that is great, but what does it mean for the client who is asking for a culture-change program? So people tend to imitate prestigious individuals and also tend to follow the crowd.

The answer is CulturePods, a specific set of steps to drive organizational change. We can take advantage of those tendencies to intentionally shape a culture. The basic idea is simple. Design a new, desired culture. Implant that culture into the organization. Create the environment for it to thrive and spread on its own. Over time, it comes to displace and dominate the extant culture.

It is analogous to artificial selection. We select the qualities and traits we want in the new culture, we control the propagation by taking advantage of specific proximate psychological mechanisms, and we maintain boundaries that allow the nascent culture to grow.

Here are the basic steps…

Mapping

The first step is to create an ethnography of the current culture. For the sake of simplicity, it is easiest to bucket this into three areas:

economics (basic economic principles, workflows, and incentives)

organizational structure (reporting structures, governance and KPIs)

ideology (norms, values, and beliefs)

These are referred to as infrastructure, structure, and superstructure in the literature (Harris 1979)

Equally important is to understand the lines of cultural boundaries. Typically an enterprise is actually comprised of multiple sub-cultures. They may vary by geo, by vertical, or by discipline/line-of-business.

mapping the organizational structure and culture

This map is essential as it defines both the minimally viable enterprise, a SuperPod, as well as defines the cultural boundaries that the PODs must navigate within. The significance of these will become clear as we lay out the model here.

2. Culture Design

The next step is to work with key stakeholders to design the desired state. What are the new work practices? What are the metrics by which people are evaluated and compensated? Are you adopting a Teal or a Green organizational structure (Laloux)? What values and norms are you embracing? What is the organizational structure? Reporting? Governance?

The basic tenant here is to apply design thinking to the problem. So get out the PostIt notes. Now, you could go about a cultural redesign with no input from the core actors, but doing so carries obvious and substantial risk.

defining the aspirational culture

When mapping the extant culture and planning for the future one, it is essential to understand the distinctions between de facto and de jure ways of behaving, and the underlying causes. As with the desire paths noted by Alexande (1977), workers will subvert the officially sanctioned work-flows if they are not aligned with their interests. And in designing for a future-state, the challenge is even greater as you need to try to project future need states in complex real-world systems. Given these challenges, it is essential to map in detail the basic needs of the users across the organization.

a desire path

The nature of the business will drive significant design constraints. How many people are needed in each division based on the “jobs to be done,” for example? What are the divisions? How do the different business units interface? How does this dovetail into a technology transformation program?

The design process essentially drafts the culture content of the seed Pods.

3. Seeding

Once the new company design is mapped out in detail, the next step is the initial form of implementation. The idea here is to create a minimum viable unit within any given business group to accomplish the necessary tasks, and that also embodies the new culture.

Let’s use an example for illustration. Say that within the HR group a minimum of 3–4 people are needed to operate within a given territory (a recruiter, a compliance officer, a benefits manager, and a payroll/time sheet administrator). We would work to implement one such group. One Pod. The individuals who comprise this group would be cherry-picked from the larger organization to have certain psychological predispositions. In essence, we look for individuals who are good cultural transmitters. They serve as models for other team members to follow. As models, being successful and having high-prestige also facilitates cultural transmission to others. This team would be immersed in training sessions on the new culture with a cultural docent who would guide them in the early days of implementation.

Pods are initially seeded with high prestige employees

Likewise, a new Pod would be developed in sales, marketing, operations, etc. These Pods together form the scaffolding for the new culture and the new enterprise. They need to work together to engage and succeed in the overarching function of the enterprise. Simultaneously, the new Pods, which collectively constitute a minimum viable enterprise, would have to be insulated from the rest of the organization.

4. Growth

Once the initial Pods establish and stabilize, more individuals can be introduced to the group slowly over time. These individuals need less training than the original colonizers. New participants are picked to have different psychological dispositions, and we leverage cognitive biases to our advantage. For example, we look for people who are more conforming as we add to our initial Pod. Over time, these new entrants adopt the new dominant culture.

psychological biases drive uninitiated employees to adopt the new culture

The introduced individuals find themselves in the young Pod, where the majority of people, including very prestigious people, have adopted new behaviors. Without much overt “training,” people will begin to learn and imitate the new ways of working.

5. Grafting

Once the Pod grows in size, we split them into two. Each daughter Pod is placed strategically in the organization and more participants are slowly added to the Pod. Again, because of learning biases such as frequency-bias transmission, the culture in the Pods continues to grow with little intervention. Indeed, less and less direct training is required.

once the Pod grows, it can be split into daughter Pods

5. Propagation

Growth and grafting continue with supervision. Here it is essential to be attentive to the real boundaries within the organization in terms of both culture and operational demands. Slowly at first, and then quickly, the new culture takes hold and over time replaces the old culture.

cultural transformation starts slow then exponentially expands

If the boundaries are too permeable, then the new culture will not stick. People will revert to the old ways of doing things. For instance, take our HR pod. The new recruiter may not take on the new work practices of the model if they are still sampling and observing and interacting with the old HR recruiters. The sampling pool must be constrained to the new pod. There needs to be a sense of a new norm.

IMPLEMENTATION

It seems simple and in some ways it is, but the recipe must be followed carefully. Large enterprises tend to mimic societies in low-intensity warfare. Delicate truces have been drawn between interest parties in a matrix across the enterprise, and so the entire organization is interested in maintaining the status quo. If not protected, a new CulturePod will be over-run with the forces of the current culture. The results will be the death of the nascent culture.

So it is imperative that one creates the boundaries necessary to protect the Pods as they begin to take root and flourish.

Likewise, one wants to leverage the basic forces at work in cultural learning to make the growth of the Pods easy and the fidelity of the information high. A lot of effort is put into the design of the new culture. If errors are introduced early on in the transmission of the new culture, the end result will deviate from the desired one.

Strong and highly visible support must also be present at the highest levels. Pods will be initially populated with A players, and managers will be reluctant to have these individuals removed from their teams for some cultural transformation program that they likely will think doomed for failure. Without senior support, mid-level managers will sabotage the process.

THE CORPORATE CULTURE SETTING

So if you want to replace an old culture with a new one, you need to tap these propensities. Failure to acknowledge these forces and design a system around them will lead to failure.

REFERENCES

Alexander, Christopher (1977). A Pattern Language: Towns, Buildings, Construction. Oxford University Press, USA. p. 1216. ISBN 0–19–501919–9.

Boyd, R., & Richerson, P. J. (1985). Culture and the evolutionary process. Chicago, IL: University of Chicago Press. (OCLC: 11496588)

Cavalli‐Sforza, L. L., & Feldman, M. W. (1981). Cultural transmission and evolution: A quantitative approach. Princeton, NJ: Princeton University Press.

Harris, M. 1979. Cultural Materialism. Cultural Materialism: the Struggle for a Science of Culture , Walnut Creek, California: AltaMira Press

Sperber, D. (1996). Explaining culture: A naturalistic approach. Oxford, UK; Cambridge, MA: Blackwell.