Let’s talk about culture
Organizational culture has been blamed for many recent disasters, including BP Deep Water Horizon (which has been referred to as a “culture of greed” as well as a culture that had defects relating to safety), GM (“…a culture where you get fired if you do talk about quality and safety issues, and you get fired if you don’t talk about them”), Toyo Tire (“Toyo Tire’s problems stem from its corporate culture”) and VW (‘North Korea without labour camps”).
Some interesting articles have been written about culture, including:
- What are the most common organizational culture problems?
- 7 signs your organization has a toxic corporate culture
- 9 key issues with Amazon’s corporate culture
- There are many aspects or dimensions of organizational culture, illustrated by people talking about ‘safety culture’, ‘risk culture’, ‘ethical culture’, and so on.
- There is no single corporate culture. Culture can be quite different between units, departments, locations, or teams within a single organization.
- Culture reflects people, and since the employee population is changing all the time, we should expect culture and the behavior patterns it influences to similarly change. However, there can be a dominant culture that reflects the influence of leadership (whether of the organization, a unit, team, or so on), and that influence is likely to remain fairly constant until there is a change in leadership
Richard shared the results of some research and study into corporate culture, with an emphasis on risk culture. He talked about the fact that while many are driven by performance, others are driven by a need for ‘control’. A balance needs to be found.
Some are highly collaborative, while others are prone to taking the lead and directing others to follow.
These differences in personality can drive behavior when it comes to risk decisions – how much ‘risk’ to take.
Richard is the author of the IRM’s publication on Risk Culture. (I was one of many reviewers). I believe you will find it an interesting read.
Richard and I have scheduled additional opportunities to discuss risk culture and its effect on the management of risk. Details are at www.riskreimagined.com.
But in the meantime, I have some thoughts I want to share on how to assess whether your organization’s culture is what it should be.
- Because there are so many aspects or dimensions of organizational culture (safety, ethics, risk, and so on), I would focus on a limited number of dimensions at a time.
- I would endeavor to define (a) what I want to see in a model culture; (b) how defects in culture would impact corporate success and the achievement of objectives (in other words, I would assess the risk); and, (c) how I might identify red flags that would indicate such defects.
- Based on the above, I would determine appropriate assessment methods and tools. I personally like surveys and have used them with some success in partnership with the Human Resources department. However, we should not underestimate the fact that all of us (if we are alert) can provide input and insight into the culture of our organization. We typically know, or at least suspect, when there are problems with the corporate culture. I was very much aware of issues at several of my employers, and always (a) considered whether they represented a threat to the organization that merited my attention, (b) took them into consideration when defining my internal audit plan, and (c) discussed serious issues with top management and the board. Of course, I did not rely on my own suspicions; I would use surveys and interviews to provide additional information for confirmation or clarification.
Are you sensitive to the possibility of defects in corporate culture that might represent an unacceptable level of risk – through their impact on decision-making – to the achievement of organizational objectives?
I am interested in your experiences and insights.
[i] I believe that if you register, you can listen to recordings of both webinars