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Book review of Organizational Culture and Leadership

By: Edgar H. Schein and Peter A. Schein

"...culture is deep, pervasive, complex, patterned, and morally neutral" (p.57).

Organizational Culture and Leadership is a voluminous book in its 5th edition that has shaped how we think about organisational culture. The book focuses on understanding how culture shapes organizations and how leadership can shape that culture. Schein explains that "the culture of a group can be defined as the accumulated shared learning of that group as it solves its problems of external adaption and internal integration, which has worked well enough to be considered valid and… [is] taught to new members as the correct way to perceive, think, feel, and behave in relation to those problems. That accumulated learning is a pattern or system of beliefs, values, and behavioural norms that comes to be taken for granted as a basic assumption and eventually drop out of awareness" (p.6).

The key is that culture is "out of awareness". It becomes something we know is there, but we can't quite define it in most cases. It is not just behavioural. It shows up in shared learnings, conversations, and what makes specific issues relevant. It is the "jargon" of the group (p.9). Culture is influenced by the history of the organization, the structure and strategy adopted, the goals set, and the way leaders exhibit their values, beliefs, and assumptions.

In describing organizational culture, Schein establishes three levels of culture – often presented as an iceberg – these are artefacts, beliefs and values, and basic underlying assumptions (p.18). Artefacts are the visible and feelable structures and processes in an organization representing culture—the observed behaviours of colleagues that happen without anyone being told. The belief and values are the expressed ideals, goals, and aspirations of the organization – they may or may not be congruent with the behaviours and artefacts that appear in the organization.

Basic underlying assumptions are the unconscious, non-verbal, taken-for-granted beliefs and values that determine the behaviours that appear and the artefacts that stick in place. They may or may not be aligned with the stated beliefs and values. Schein cautions against making inferences about the deeper assumptions based on observed artefacts alone "… because your interpretations will inevitably be projections of your own cultural background" (p.18). Instead, you need to look for the "theories-in-use", the assumptions that help a group know what to do and how to define things. They are the way things are done (p.22). For example, if you see someone sitting at a desk, depending on your underlying assumptions, you might assume that they are lazy, thinking, or hard at work.

"Leaders do not have a choice about whether or not to communicate. They only have a choice about how to manage what they communicate" (p.205). Leaders influence the organizational culture by influencing these three mechanisms. Building structure and culture is about addressing two fundamental challenges: 1) how to organize to deal with the environments in which they exist (external problems of survival), and 2) how to organize themselves internally to deal with the inevitable human problems that arise in collective life (p.149). To do this, leadership plays a central role in showing others what to pay attention to, how to react to critical incidents, where resources should go, and role-modelling beliefs and values. As Schein notes, in creating norms through behaviour, it is consistency that is important, not the intensity of the attention (p.184).

Leadership also builds culture through the design of the organization itself – the physical space, organizational structures, processes and ways of working. "Cultural assumptions form around the means by which goals are to be accomplished, they will create the routines and behavioural regularities that will become some of the visible artefacts of the culture" (p.160). The design of an organization embed deeply held assumptions about the task, the means to accomplish it, the nature of people, and the right kinds of relations to foster among people (p.198). The physical space reflects the basic assumptions of how work gets done and how relationships are managed (p.201). It is the visible part of working for a company. The physical structures create predictability in an ambiguous organizational world (p.198). Recurrent processes help oriented individuals in the organization – they set the rhythm of the culture and are a way of communicating values.

"Culture is best revealed through interaction" – you must be curious, look around and ask questions.

In thinking about culture change and building an organizational culture, it's useful to consider the phases of an organization's lifespan. Early in an organization's life, culture is about differentiating the organization from others; the culture is more explicit, and efforts are made to integrate it. Including in the hiring decisions – "will they be a cultural fit." Changing the culture in an early stage is difficult, usually self-guided or through managed evolution, using hybrids (people who left and have come back, or fit the culture but come from outside).

As a company matures, it needs to change, adapt its existing embedded culture, and revise these assumptions to remain relevant. Organizational decline happens when a company's basic beliefs – their espoused values and ideals about themselves – stop aligning with their actual identity. Managing change is about understanding how culture shows up and what behaviours must change to align artefacts with underlying beliefs and values. A new culture is only embedded if the new behaviour leads to success and satisfaction over a period of time (p.338).

To successfully change culture, Schein emphasizes defining clear change goals in terms of behaviours, not at "culture change"

"To change culture requires the insider change leaders to understand their culture at a detailed level and especially to identify various stable elements that were the source of the company's success..." (p.41). On a personal note, one of my failures as a change leader was not appreciating the elements of culture that were contributing to organizational success enough and instead focusing my attention on trying to change what I viewed as the unproductive elements of the culture. I may have done better by looking at the key cultural drivers and then finding ways of helping this organization achieve its goals more effectively without undermining the culture (or challenging it so directly). As Schein notes, a new CEO can gradually erode elements of the existing culture, but in general, culture change only happens at the basic assumption level if the entire culture changes – say, by removing the senior management that has grown up in that culture (p.207).

In managing change, Schein identifies two key principles. First, survival anxiety or guilt must be greater than learning anxiety. Increasing survival anxiety doesn't produce positive results. Learning anxiety must be reduced rather than increased survival anxiety. This is about creating a psychologically safe environment. Focus on: compelling vision; formal training; involving people; providing resources; positive role models; support groups; remove barriers (p.329).

To conclude, Schein provides a set of useful questions, summarised here, for diagnosing culture:

Questions to ask yourself if you are managing change:

  • What can I learn about that history before I begin to plan change?

  • Do I understand the problem we're trying to solve?

How to identify the underlying assumptions:

  • Bring together a representative sample from the organization.

  • Ask them to identify as many behavioural artefacts of the organization as possible. List these on flip charts.

  • Then ask the group to identify the major espoused values of the organization and compare those values with the artefacts on the charts.

  • Ask if they are consistent. If you find discrepancies, ask the group to identify the deeper assumptions explaining the artefacts, especially observed routine behaviour (p.30).


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