The Culture Series: Part 1, What is Culture?
What’s culture got to do with it?
In my last piece, I wrote about the success of Tolaram’s Indomie Instant Noodle product in Nigeria. I emphasized how executives at the company built an interdependent architecture so they could better manage distinct components in their value chain and about how they were patient for growth and impatient for profits. In other words, they had to figure out their profit formula before aggressively scaling operations. Read the Tolaram posts here — Part 1 and Part 2.
The piece received overwhelming response (thank you) partly because I think it showed that - while difficult, it is possible to develop a business model that is focused on the vast non-consumption* in Nigeria and succeed.
But some comments I received also raised some very important questions about the importance of culture. This piece is borne out of those comments and explores the impact culture can have on an organization, a society, and ultimately a country.
This piece on culture will be broken into four parts**. I will spend the first part on how we at the Forum for Growth and Innovation at the Harvard Business School define culture***. The second part will provide a few examples of successful culture changes at the company level while the third will explore successful culture changes at the country level. The fourth will explore the implications for innovators, investors, and policy makers, especially those in emerging markets.
Defining culture
Because of the importance of culture in any society or organization, the word has garnered many definitions over time. Some definitions are the beliefs, customs, arts, etc. of a particular society, group, place, or time or a way of thinking, behaving, or working that exists in a place or organization. Professor Schein writes that while these definitions might reflect an organization or society’s culture, they do not capture its essence.
“Culture is a property of an independently defined social unit.” Schein provides a more detailed definition of culture as “a pattern of basic assumptions — invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration — that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.” In other words, culture is inherently linked to problems or tasks and not necessarily with people.
On a very fundamental level, culture is about how groups of people have evolved to solve the many problems that arise in their lives. It is neither simply about who they are nor where they are from, although those factors play a role due to historical precedent.
Because people in a certain group share common experiences, they typically have a similar view on how the world works. This worldview is what leads to those assumptions and beliefs, which have served them well in the past. While the group may take these assumptions and beliefs for granted, they usually represent long periods (years, decades, and sometimes centuries) of learned responses to challenges the group has successfully overcome.
It is important to note that these assumptions and beliefs might not be optimal for the society as a whole, but they typically represent the best solution to the problems the group faces considering the group’s existing circumstances.
Two Societies
Consider the case of two societies, A and B. In Society A, there is an obvious culture of nepotism or favoritism while in Society B there is a culture of meritocracy.
It will come as no surprise that Society A, with its nepotistic culture, probably invests less in programs that can improve the skills of its members and more in cozying up to people with power. Society B’s meritocratic culture, on the other hand, will compel it to invest aggressively in programs that can improve the skills of its members.
When analyzing members from both societies, it is too simplistic to label them with words like corrupt, lazy, or hardworking. While those statements might be partly true, they do not capture the essence of the cultures in both societies. It is important to consider the causal mechanisms behind what makes people successful in both societies because in order to change culture, one must understand its antecedents.
Culture is inextricably linked to the tasks that a group of people are faced with and how success is attained. If a member of society A immigrated to society B, said member would likely conform to the culture present in Society B in order to be successful. If she employs the same assumptions and behaviors she did while living in Society A, she will most likely not be successful in Society B. This happens all the time with immigrants that move from one country to another. If culture were innate, how is it possible that these immigrants are able to immerse themselves in an entirely new culture and thrive?
If it is possible to change culture, the question then becomes — how does a group change its culture so that it promotes success and development for the majority of its members?
In my next post, I will tackle this question on an organizational level by looking at some case studies.
*non-consumption is the inability for people to afford products they need to get an important job done due to the cost, time, or skill required to get and use the product.
**I originally planned to write a short piece on culture, but the more I learned the more I saw that I am not talented enough to write a concise piece on this topic, hence the four part series.
***The definition of culture and how it is developed relies heavily on distinguished MIT Professor, Edgar Schein’s book, Organizational Culture and Leadership and Harvard Business School Professor Clayton Christensen’s HBS note on Culture.
