In this session we will discuss the cultural development of an organization towards an organization that is really sustainable. Actually, I would like to introduce a new notion of sustainability which we call flourishing. So, this is much more than just simply sustaining over time, because that's the idea that the individuals, the organization itself, but also the environments should flourish. Now, in order to achieve that, obviously we need a development on different levels. The most important one is most probably the individual level where the person that works in the organization has to adjust and adapt, find new ways to do things. The organization has to adjust because in the organization, we want to find new processes, want to reorganize the objectives and the structure, even. And of course, we also want to work with our stakeholders and see what's happening around the organization. So, flourishing means cultural change in a very deep way. Now, why do we actually deal with culture? Culture in organizations is a big topic. We have to understand that it goes rather deep in what the meaning of the organization is. If you think of what Hofstede said about culture, you will realize that he spoke about it to be something like the software of the mind, so something like a collective idea, collectively held values. But maybe Edgar Schein can be much more helpful if we think of culture, because he says these are the collectively shared, basic assumptions. Now, basic assumptions, you have to realize, are even below the value level. So we're talking about something that happens in the unconscious. So, it's below our conscious mind. That's why it's very difficult to address it. On the conscious mind are things like the artifacts in an organization, like the logo, the way things look, but there are also things which go much deeper, like the values in the organization, the norms, what is allowed, what shouldn't be done. The basic assumptions go rather deep because they dig into what we believe how business should be done, what it means to work in this organization and so forth. So, in order to get to this level, we have to follow a process that leads us to uncovering these basic assumptions first, and then realize what has to be done. The other important thing is the culture actually influences all that is happening in the organization. Processes, structure, you name it, it is influenced by culture. Now, that's why cultural change is the most important change in terms of a way towards flourishing. Now, of course we want to have a meaningful change in the organization, not a change for change's sake. As you see in this cartoon, changes can be irrelevant for the members of the organization. That's not helpful. We want to go deep in areas where it really matters. Some dimensions of organizational culture like the ones presented by Hofstede give us an idea where to go. For instance, he talks about companies which are either employee or job oriented. So, in the job oriented ones, one would focus on the task, and the other one would focus on the employees. That's much more helpful if you think of flourishing. Another dimension is open or closed systems. So, do we interact with the outside world or do we keep our organization closed, do not exchange information and so forth. Obviously, if we want to include our stakeholders, we need an open organization. The other one is a pragmatic way to think about outsiders. Do we let them in? How do we deal with them? Now, if we go along these lines, we can find dimensions which are more helpful towards flourishing and others which are not at all helpful. The more flourishing dimensions would be Humane Orientation or something like Gender Egalitarianism, both introduced by The Globe Study, harmony and benevolence, like Schwartz introduced it, or universalism, for instance, Trompenaars taught us. There are also models which try to describe how culture is organized in an organization. There are different models referring to different ways, like is power important? Is collaboration important? One model I find particularly helpful is the OK model, which basically focuses on two levels. So, is the organization rather externally focused or internally focused? Is there a lot of flexibility, or do they need more control? This model has the advantage that it also talks about the three different levels of culture that we want to see, like the individual, the organizational, or the external level, as we talked about before. The good thing to see in this model is that there is a natural development, a natural transformation process that can happen, and it depends how your organization is actually situated to begin with. If it's in a certain situation, we need to work on the imbalances of the organization in order to bring them to a new balance. Now, think for instance of the external and the internal focus. That already gives us quite some ideas on how it can be different. Like the external focus is normally found in organizations which value productive processes much more than administrative processes. So that means an organization like that tries to suck in energy towards production, right, toward services, whatever is externally focused on the market, for instance. So in an organization like this, the driving force is action, right, people want to be action oriented. Power plays an important role, and it's actually, the success is measured in very material terms: profits, shareholder value, and there forth. Of course, it also means that strength and power is the way how people interact within the organization. The very opposite are companies, or organizations, which focus more on administrative or internal processes. So, bureaucracy plays an important role there, but bureaucracy has a negative notion to begin with. Bureaucracy means that you focus on past experiences, on best practice and therefore try to have control of the processes in the organization. So, such cultures focus on standardization, control and uniformity. Of course, that's the very opposite to the external focused company, so there are power struggles. One would need energy for all resources, and try to take it from the other. So the power of bureaucracy is measured in the ability of control. Now, if you think of this pulling of the two forces in different directions, it's like a pendulum swing, you can imagine that like a pendulum, that once it’s pulled by the one side, so more protective, or, by the other side, the administration has the upper hand. This is like the bottom of a U, if you think of the letter U, and both sides try to pull up on either side. So in the end, you get a shape of the letter U. On the one side, productive, external processes, on the other side administrative, internal processes, both battling for resources, for attention, for power in the organization. This is the classical recipe for imbalance in an organization. Such an organization will never be balanced. Like you can imagine, you can never balance on a U. So, if we look at more detailed ways how these organizations can be in imbalance, you will understand how this goes against sustainability or flourishing. So, if one side of the U is more prominent than the other one, we will get, for instance, an L-shaped corporation, where one side is higher and the other side is much lower. Such an organization would be an organization that favors productive processes, protective processes are dominant. They will receive more attention, more power, they will get more resources. So administrative processes in such organizations are considered as irrelevant, or even worse, like blocking or barriers you don't want to have. So, in an L-shaped corporation, everything goes towards action, creativity, innovation, outside focus. The only external stakeholders which are considered relevant are customers, right, so it becomes very difficult. Like laws and governmental rules or union rules and others are in the way of such actions, so these companies tend to try to avoid to cooperate with these entities. Now, in the end, it means if you need all this energy for action that you have to take the resources from somewhere. You exploit, you exploit your employees, you get as much out of them as you can, or you exploit the environment, both equally harmful in different ways. If we think of the other way an organization can be imbalanced in this dimension, it would be the J shaped organization, where the one side, the administrative side, is dominant and the action side is limited. You find that in public administration, for instance, quite often. So that means, in this case, administrative and internal processes are prevailing, right. They are more dominant. There is a higher regard for control, for uniformity, and little regard for action, so one feels that the organization goes astray when all this action on outside focus happens. With this internal focus, bureaucratic loops are introduced and control is the rule of the game. And very often that can lead to virtually strangling the organization with bureaucratic rules. Now, how do we get out of such an imbalance? There are certain ways how we can deal with it. The most important, of course, is first we need to understand where does the organization stand? Diagnosis is very important. We need to see, is it L, J shape, whatever dominates in the organization. Then, we need to find ways to define a strategy, roadmaps to get out of such a situation, define initiatives, find ideas that can help to balance the organization again. And we do that by testing pilots. Once we have the initiatives, we start in one department trying out new ways, trying to go and question the cultural ways, trying to question the basic assumptions and trying to introduce new ideas, how to see and work with things. Once it works in a department, we try to diffuse it through the entire organization. If we’re lucky, it will be picked up the same way in other parts of the organization, sometimes it has to be adapted. We want to include the stakeholders, so the next step is to also talk to the stakeholders, include them in these processes, and we want to have structural change. All of that is accompanied by cultural change, because cultural change will provide the basis of all the other developments. Naturally, this cannot happen on its own, only on an organizational level. We also need to work on the individual level in a parallel process.
