Cultural Risk Management Part 2 by Glen Burridge: Deadly Assumptions

Now, I hope I started to frame this last time, but let’s take that first assumption and look at some practical evidence of why it needs dispelling. This won’t be the normal size of my blogs. This is just too important an subject. But stick with me….

Assumption No. 1    “This topic has little or no effect on my world: I have more important things to worry about”

This is so big I’m going to break it down into two parts.

Part I: Every Human Grouping Has a Culture

Let’s start with internal culture, the one that exists in every grouping or organisation of human beings on the planet. This is the aspect most people are familiar with.

In the world of business, the evidence of its importance is legion and its consequences run from operational ineffectiveness through to life and death:

  • In a 2008 survey of more than 1500 industry executives, IBM found that roughly half of all projects fail due to “company culture”

http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03100-usen-03-making-change-work.pdf

  • Deloitte ‘Core Beliefs & Culture’ survey from 2012 illustrates the power a corporate culture has on how happy and valued employees feel:

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-core-beliefs-and-culture.pdf

Exc orgs 

  • The Final Report on the Investigation of the Macondo Well Blowout by the Deepwater Horizon Study Group (2011), one of the worst industrial accidents in of recent years:

“It is the underlying safety culture, much of it so ingrained as to be unconscious, that governs the actions of an organization and its personnel. [These are] cultural influences that permeate an organization and an industry and manifest in actions that can either promote and nurture a high reliability organization with high reliability systems, or actions reflective of complacency, excessive risk-taking, and a loss of team situational awareness.”

http://ccrm.berkeley.edu/pdfs_papers/bea_pdfs/dhsgfinalreport-march2011-tag.pdf

We also know that increasing the variety of the people who make up an organisation, in terms of the most fundamental traits, has a positive impact:

Diversity

http://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters

And you don’t have to take my word for it, listen to what these two men have to say about the topic of organisational culture, who know a thing or two about running a business….

“The only thing of real importance that leaders do is create and manage culture. If you do not manage culture, it manages you, and you may not be even aware of the extent to which this is happening”

Edgar H. Schein. Renowned American organizational psychologist, Emeritus Professor of Management at the MIT Sloan School of Management

“Culture eats strategy for breakfast”

Peter Drucker. 20th Century business management guru and writer

The ends might be different, but the same undoubtedly goes for the public sector and our governments. Any listing of the largest organisations on the planet,

e.g. https://en.wikipedia.org/wiki/List_of_largest_employers

is dominated by state-driven entities. Just contemplate the complexity and cultural diversity – in every sense – of a collection of several million employees represents for a moment. By any standards, these are equivalent to nation states in themselves. Even a several thousand employee organisation will have its own clans, power struggles and centres, outlying regions, dialects and a clear sense of norms and networks of communication and action.

Part II: When Worlds Collide

For an organisation that remotely cares about its interaction with its operating environment, it’s very tempting, especially for a commercial entity, to simply state that what’s important above all is their relationship with their customer(s). This makes complete sense…..on the face of it, but the correlation between corporate health is mixed, as examples:

The truer reality is any organisation, whether public or private sector, sustains its existence with its overall relationship with its operating environment.

Crudely speaking, it is fed by a demand from within that space, whether it be from a market or a power centre. Its survival may assured through various means: extracting profits, exchanging goods, offering expertise, a social contract, acting on behalf of a governing mandate or through distributing services altruistically, among other things.

Whatever your organisation does, it will inevitably be interacting with others, no matter what your or their motives. And each will possess a culture(s) which will never switch off, constantly interplay and collectively shape a new reality.

The trouble is that if you ask a random person on the street what “inter-cultural relations” are, chances if they have the patience, they’ll figure out more or less what it should mean. However, except for those working in certain fields, it’s far less likely to be something they systematically think about much and there is even less chance they claim it as an area of expertise deployed on a frequent basis.

Even those who are consummate interculturalists most likely don’t name it and will often put it down to “good personal qualities” or the like. The idea that groups they belong to are actively engaged in such issues will take some head scratching. Even though the consequences may be very apparent to them, only if pushed, are they likely to bring the C-word into it. And don’t be surprised if – even if you get here – when they refer to culture, they will be exclusively talking about ethnic or national ones (…we’ll get to that, in a bit).

It’s not that Culture isn’t ever-present or of capital importance, it’s that most people are simply not taught to frame relationships in intercultural terms, which is tragic since its master practitioners literally save the world or, at the very least, your world every day. Each diplomat who recognises that the point being made in a treaty negotiation stems from a deep-seated historical perspective born of an ancient sleight, each business person who realises that a sale needs to occur in a certain pattern to gain trust in this market, each presenter who outlines their arguments in a way which reaches out to a colleague from another discipline…..they are all making the world an easier place to live in and moving forward human progress. Belligerent, selfish or malignant actions taken in the world are, by definition, anti-intercultural in that they drive away mutual comprehension and productive co-existence.

Yes, I told you this stuff was important, didn’t I?

Maybe it is my training as a geophysicist, but I like to think of the inter-cultural relationships acting as a wave-field. Like the sun’s energy that bathes us, culture is something we are constantly bathed in. The spectrum frequencies change slightly with every moment, but it is inescapable and complex, but if you make an effort to understand it, it is something you can harness for all sorts of good.

We’ll get back to what goes into that ocean of waves, but for moment I just make one plea – don’t limit your thoughts on this subject to flags, languages or belief systems. There are complete strangers you can meet from the other side of the world who you will have instant an instant cameradery with, based on affinities that go well beyond those factors. Have a think….

Now, if you still don’t think this subject is of capital importance, take a look at this list: https://en.wikipedia.org/wiki/List_of_cognitive_biases

Culture plays a significant and inescapable role in pretty much any one of these effects that warp and shape our activities. Go through any of them in your professional life and see if you can think of an event where you saw this effect in play.

And now, count up the cost…..in money, reputation, uncertainty and RISK.

Billions of $’s in accumulated financial losses have resulted from not adequately addressing for this element of risk, hard-earned standing and reputation has been dissipated and yes, many lives lost. And what’s worst is that it, if deployed, it presents one of the greatest opportunities for all-round gain and it is sitting in plain view to any organisation that decides to engage with it.

That’s where this concept of Cultural Risk Management sits, right under each of the human behaviours that influence the full sweep of your organisation’s operations.

Talk to the AuthorGlen Burridge. For a discussion of the topics raised in this article and associated blogs, please feel free to get in touch with Glen at glen@glenburridge.com or via LinkedIn.

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