Culture Beats Strategy: Rules vs Norms

Leadership is felt. Only management can be measured.

One of the axioms of that has emerged from the organizational leadership literature is something along the lines of “Culture beats strategy.” George Anders (writing on Quora) traces the idea back this quote from the 1985 edition of Organizational Culture and Leadership:

Culture determines and limits strategy.
-- Edgar Schein.

Popular variations on this meme like “Culture eats strategy for breakfast,” are often attributed to the late management guru Peter Drucker, but I agree with Anders when he says it doesn’t sound like something Drucker would say, and in any case it doesn’t appear anywhere in Drucker’s writings. In fact, Drucker is more often quoted for having said something very different (that he probably didn’t say, either) like “What gets measured, gets managed,” or “If you can’t measure it, you can’t manage it,” or something else along those lines that might also be attributed to W. Edwards Deming.

While the meme on management and measurement might be true, what these famous scholars of quality and management actually wrote was intended to have the opposite effect.

It is wrong to suppose that if you can’t measure it, you can’t manage it — a costly myth.
 — 
W. Edwards Deming, The New Economics, p35 (from John Hunter at the Demings Institute).

What gets lost in the confusion of attribution is the practical wisdom necessary to succeed in business.

Successful executives must understand the difference between leadership and management — what to lead, and what to manage. — Thomas P Seager, PhD

Culture does not respond to management in predictable ways, because culture is tacit. It is experienced. It cannot be made explicit. It cannot be codified in rules and standard operating procedures or best practices or forms. Because once you reduce culture to the bureaucratic residue of your organization chart, handbooks, protocols, or manuals, it ceases to be culture. It becomes policy.

And policy can be measured. Policy can be managed.

Culture must be led.

Deming and Drucker’s real views were better exemplified by a quote (again, falsely) attributed to Albert Einstien (but perhaps derived from William Bruce Cameron’s Informal Sociology).

Not everything that counts can be counted, and not everything that can be counted counts.

I’ve written about this before in How to Turn Ideas Into Customers. The gist of it is this: only explicit knowledge (drawings, materials, prototypes, specifications, software code, data) can be measured and managed. Tacit knowledge, because it cannot be measured, can only be led. And it is tacit knowledge (new ideas, new experiences, and creativity) that are the ultimate source of all business value.

Work as imagined vs work as done

Certainly, policies can help shape culture, but not always. Sometimes, the two are at odds with one another. You can see the discrepancy in the difference between the way work is imagined (e.g., by management) and the way work actually gets done.

Work as imagined is a reflection of policy, but work as it actually gets done is a reflection of culture.

For example, on the floor of my building, there is a kitchen, where the faculty and students housed in the building can prepare coffee, microwave meals, and refrigerate foods. The door to the kitchen has an automatic closer because it is installed in a firewall. That is, the door closure is supposed to ensure that the door remains closed, except for the times when someone is passing thru it.

What’s the point of a door that may never be opened?

It’s important to keep the door closed, because the kitchen is a high-risk area for fires, and an open door would allow a kitchen fire to spread to the rest of our building, while a closed-door Fwill contains the heat and smoke of the fire for at least two hours. So the door closure is to ensure compliance with building codes (a legal concern) and safety standards (an ethical expectation).

Despite the fact that almost everyone who works in my building receives annual lab safety training, and is expected to maintain the highest standards of professional engineering ethical conduct… the door is propped open all the time.

It’s inconvenient to be carrying your Lean Cuisine microwavable lunch in one hand, a cup of coffee or a fork or a juice or whatever on the other hand, and operate a door handle. So, the occupants of my floor prop the kitchen door open.

Work as imagined by the building architect and the building inspector and the fire safety marshal dictates that the door will close automatically, in exactly the way the door closer is expected to do.

But work, as done by the occupants, props the door open (their efforts to disable the automatic door closer overcome by the facilities staff charged with enforcing compliance with building codes).

Rules vs Norms

The kitchen door example illustrates the difference between Rules and Norms.

Rules are constraints on behavior that have known consequences for transgression. And these consequences are made explicit to the people who are expected to follow the rules.

The predicament faced by the main character in Ferris Bueller’s Day Off (1986) illustrates the typical indoctrination that all American schoolchildren receive in understanding rules. In this scene, High School Principal Mr. Rooney is attempting to communicate to Mrs. Bueller the dreadful consequences that Ferriss will face if he misses additional school days.

In the 1986 John Hughes classic Ferris Bueller’s Day Off, the High School Principal is attempting to communicate to Ferris’s Mother the consequences of breaking attendance rules. Ferris circumvents the rules by hacking the attendance records with his dial-up modem.

The problem with rules is that, when people know the consequences beforehand, they perform intuitive cost-benefit calculations in their imaginations about the chances of being caught and whether the behavioral transgression is worth it. In the movie, Ferris uses his 1980's-era dial modem to break into the school’s digital attendance records and change the data recording his absences, thus undermining Principal Rooney’s justification for punishment. For Ferris, breaking the attendance rules is worth it, because he correctly ascertains that he will not get caught, Or, even if he does, the punishment won’t be so bad that he’ll regret skipping school.

On the other hand, norms are behavioral expectations that do not have explicit consequences. Our society is governed by laws, to be sure, but it relies even more on common cultural norms. For example, it is customary in the United States to wait in line (or in a queue, to use the British term) when the expectations of civilization demand that we take turns. Think about the chaos experienced on Black Friday (the day after Thanksgiving in the United States) when shoppers, mad to get the limited number of highly discounted electronics or other items on sale, rush all over each other in a scramble to be first to claim the goods.

What happens when you try to cut into the front of a Black Friday shopping line?

Well… we don’t know. You might get a stern rebuke from others in the line. Or maybe you get nothing at all. In Texas, you might get shot.

Waiting in line is a norm, not a rule.

We see the importance of norms later in Ferris Bueller’s Day Off, when it Ferris proposes that they steal a car from Cameron’s Father.

Cameron (in the red hockey sweater, from the 1986 classic movie Ferris Bueller’s Day Off), worries more about breaking expectations when he doesn’t know the consequences.

“Remember how insane he got when I broke my retainer?’ Cameron asks?

When faced with the prospect of getting caught violating his Father’s prohibitions regarding the use of the car, Cameron freaks out because he doesn’t know what the punishment for using the car will be.

In the end, Cameron decides he must find out, as he vandalizes the car that is the object of his Father’s affection.

Cameron decides to violate the norms established by his Father, but the movie never shows the audience what happens when the Old Man finds out Cameron “killed the car”.

The difference between policy and culture is the difference between rules and norms. Rules are subject to the efforts of management, but culture responds instead to leadership.

Norms are more powerful than rules

In the psychology of human behavior, norms are much more powerful than rules, because without knowing the consequences ahead of time, it isn’t possible to rationalize that a cost-benefit calculation. The ultimate consequence of norm violation could be, at least in our imagination, death. Thus, violation of norms can activate in us an existential crisis in which we fear for our lives as little children might when faced with the wrath, shame, or disapproval of their parents.

The most powerful emotion for ensuring compliance with cultural norms is shame. It is an emotion that is so important for most of us to avoid, that we will comply with almost any organizational expectation to avoid being shamed, diminished in status, or cast out of the group. While shame may be essential for enforcing the expectations of civilization, it also kills our creativity and saps our energy.

Shame is an expensive emotion for a Startup venture seeking to disrupt an industry because those interests vested in the status quo will almost certainly attempt to shame the disruptive organization into compliance with existing industry norms. And that compliance would almost certainly mean the failure of any entrepreneurial effort.

Those people with the courage to break existing norms end up establishing new ones. They are the cultural creatives that set new trends and fashions.

The late comedian George Carlin became famous for ridiculing cultural norms, as exemplified in his stand up routine, “7 Words You Can’t Say On Television.”

We shouldn’t be surprised when the entrepreneurs that are most successful are also those that break our cultural norms. Whether they’re reckless, or simply testing (like Carlin) to explore the consequences, the successful entrepreneur must break these norms.

The success of their startup ventures requires them to do so.

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by +390,714 people.

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