Weekend Reading: The Culture Change Industry — Alchemy, Bullshit, and the Skywalker Syndrome

By: Jon Harding , Former Global Head of Culture at Barclays

After many years working as a Senior HR leader, during which time I was tasked with culture change initiatives across many organisations — to include Barclays following the LIBOR scandal — I came to an intuition that, despite the enormous efforts that have gone into "shaping" culture, something doesn't seem to be working.

This was a less than comfortable insight. Yet the more I thought about things, the more self-evident it became that, although some progress had been made, the grand plans in which I had been involved had failed to deliver on their promises.

Why should this be so? After all, academics and consultancies have been producing cultural change programmes and literature at an ever-increasing pace. Ngrams from Google shows that, from around 1980, "organisation culture" has become ever more present a topic, and it really became "a thing" as we entered the 21st century.

Culture, and culture management, have become dominant themes across all sectors. "Poor" culture is often seen as the prime reason for organisational failure, whether it involves individual bad actors being tolerated or systemic failure, such as that witnessed during the 2009 banking crises.

The pursuit of culture change has become a "Philosophers Stone" endeavour, reminiscent of efforts by medieval alchemists hoping to convert base metal into gold. There is an almost magical essence to something that can neither be touched nor seen, yet which can nevertheless "eat strategy for breakfast," as Peter Drucker famously put it.

How is this "unseen" thing to be managed?

Drop "TED talks cultural change" into your search engine and watch what happens. You will likely find yourself watching any number of culture industry "experts" broadly asserting the same sort of thing in the same sort of way. While there may be some debate about how to address culture, the differences heard in mainstream punditry are largely marginal.

And yet, for all this talk, if you ask people in organisations whether things are better managed today than they were in the past, most will say we're doing "about the same" or "not as well." Lead is yet to be turned into gold.

This is not just an anecdotal perspective: there is plenty of empirical data showing little has changed in the way that culture is experienced and examined. The widely reported phenomenon of "quiet quitting" has shown that many employees feel disconnected from their company, and have lost the motivation to exceed expectations at work.

Although some things have improved — much of the casual sexism or racism of yesterday is thankfully no longer with us — I would argue that these changes are the result of larger societal shifts, rather than the consequence of anything the HBR has ever served up.

Despite efforts by academics and consultants, workers do not report any obvious march forward toward better-run organisations. And to the extent things may have improved, this has had little to do with what might be called the culture change "industry."

And an "industry" it most certainly is. We are beset today by an entire ecosystem of consultancies, academics, pseudo-academics, psychologists and departments within large organisations all promising culture-change Nirvana that has yet to be experienced.

Furthermore, the contribution from business schools has been marginal at best. The complex theorising of the Critical Management Studies movement has failed to make any mainstream contribution. Academics are under pressure to publish "new" theory or find themselves commissioned to deliver programmes stripped of any genuinely challenging perspectives.

The anthropologist David Graeber coined the term "bullshit jobs." His was a serious point. Princeton philosopher Harry Frankfurt elegantly describes "bullshit" in this context as a deceptive misrepresentation of reality. It is, however, different to lying, as the bullshitter does not aim to deceive, but nevertheless creates something phony. To use a fashionable phrase, the work done in "bullshit jobs" is best viewed as "performative."

Central to Graeber's thesis is not the belief that "bullshit jobs" serve no purpose, but that the purpose they do serve has little bearing on those they purport to serve.?

In many cases, reference to culture is made as a justification to attract resources to fixing real problems —?and resources mean power in most organisations. Whether it is the power to set an agenda or the power to claim budget ahead of others, overseeing "culture problems" can provide powerful executive position — and particularly so when "culture problems" have been identified as a concern by relevant stakeholders and overseers.

The expense, effort and perceived risk of culture projects has not gone unnoticed by those commissioning such work. An obsession with the "measurement" of culture has emerged (or perhaps an obsession with being seen to measure culture).?

While effective measures are still wanting, the preoccupation with measurement has inadvertently shed light on many of the definitional problems that surround culture change: no one is really clear what they should be measuring. To take but one example, is a greater number of whistleblowing events a sign of a good culture, or an unhealthy one? Particularly in industries like banking where culture is a matter of regulatory concern, it's easy for culture change measures to become ends in themselves.

It is at this point that the real issues emerge with culture change. Different observers carry their own assumptions about "culture" that are seen as self-evidently true. Alongside the performative aspect of culture change efforts, we are burdened with a set of conditions best described as "naturalised assumptions." Depending on which assumptions you hold, you are likely to see problems — and potential solutions — quite differently.

By way of a summary, I would characterise these as follows.?

1. Scientism

As heirs to the scientific and industrial revolution, we have inherited a belief that the power of "science" can inform all aspects of organisational life. The scientific approach is, of course, a powerful one. Human beings have been able to achieve things that our ancestors could not have even begun to imagine.

However, this "scientism" has also led to a belief that organisations are "machines" and that culture can be manipulated as a machine might be. This is reinforced by the "data" generated to support culture change efforts (e.g. employee opinion surveys), against which leaders feel empowered to make "truth claims" in the same way we might see in the natural sciences.

The attempted deployment of behavioural science illustrates this perfectly. The use of the word "science" inspires confidence. This has, however, allowed many of the issues associated with it as a "science" —?P-hacking scandals and the lack of replicability, for instance — to be overlooked.

An even greater issue lies in the subject/object split implicit in scientism. When the world is conceived in this way, employees exist only to be motivated, incentivised, punished, etc, dependent on the cultural change goals set by management. They are, in essence, subject to someone else's ends. As the philosopher Immanuel Kant argued, this is deeply problematic. Human beings are ends in themselves, not a means to an end.?

2. Teleology

"Teleology" is the idea that everything is heading somewhere. That progress and change are inevitable and proceed on a defined path.

Marx exemplifies this with his theory of historical materialism. While very few in the culture change industry would go anywhere near referencing Marx, they are — perhaps unwittingly — heirs to the same tradition. After all, Marx built on the ideas of Hegel, who saw history as progressive. Whether it's Noah Yuval Harari's theses of human progress or Laloux's?Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness, this view is nearly ubiquitous.?

In the culture change world, this teleology expresses itself through "stages of evolution"-type approaches with tools that "measure" the current state against a desired future state. These often find themselves accompanied by consultants that "help" an organisation navigate to the next level of its "journey." This is the world of Maslow's hierarchy of needs, with an end-point reached at the point of self-actualisation.

The Barrett values methodology is an example of this. Focusing on negative and positive "values" in an organisation, this approach seeks to identify "entropy" (bad stuff) based on survey responses. Thus begins a consulting journey, which might involve a mish-mash of practices that trace their origins to the Human Potential Movement from the 1960s. The survey also identifies "negative energy" in individuals, who then find themselves subject to a variety of interventions designed to fix them and move them forward.

This is the world of the "big event" and the charismatic consultant speaker. With much the same feel as a Revivalist meeting, employees are encouraged to change their behaviours to build a better future.

There is certainly nothing wrong with trying to make tomorrow better than today. But this is quite different from adopting an unchallenged worldview that sees us all as being on a conveyor belt toward some indeterminate form of perfection. Enter the culture change consultants — and their unabated self-belief in their methodologies — to support and deliver the latest iteration of "transformation."

3. Organisational agency and heroic leadership

Wildlife documentaries often feature some commentary regarding how a particular animal has evolved to face a particular set of circumstances. This is, of course, misleading. Animals don't evolve with any sort of agency. Rather, environments continually select for advantageous characteristics. When this is combined with the phenomenon of mutation — a random process that sometimes strikes lucky — these new characteristics become widely distributed in a population.

Organisations are subject to very similar forces and respond in very similar ways. A new field of "Organisational Ecology" has emerged in recent decades, examining the life and death of organisations and industries over time. Its progenitors, Michael Hannan and the late John Freeman, proposed that organisations may succeed or fail in much the same way that individual species might prosper or decline.

Subsequent research has supported this contention, finding that the success of an organisation is most influenced not by the choices made by its leadership, but by the circumstances in which it finds itself. This is not an invariable fact, and there are exceptions to any rule. Nevertheless, the supremacy of agency as a naturalised "fact" is open to challenge.?

The idea that organisations are little more than corks bobbing in a sea of forces beyond their influence might be uncomfortable. But the failure to grasp that existential freedom is not a given has created what I would call the "heroic leadership" fallacy.

Under this belief system, failure and success are ascribed to an individual rather than a set of circumstances. This emphasis has all sorts of secondary consequences (including the rapid increase in executive pay), leading to the misdiagnosis of cultural issues and ineffective "treatment" thereof.

Combined with the teleological bias, we end up with what we might describe as the "Luke Skywalker" syndrome. All our hopes are placed in an individual on a heroic journey, who will save us from the evil empire.?

While leadership behaviour certainly does matter, the idea that character is somehow discreet from the environment in which it exists is overly simplistic. Nevertheless, The Oxford Character Project has identified that regulators continue to emphasise this in their cultural interventions.?

4. Financialisaton and instrumentalism

Heads of DEI (Diversity, Equity and Inclusion) have a habit of claiming that more diversity drives better business results. This may well be the case. But such claims leave diversity efforts beholden to profitability. Hypothetically, if it could be proven that diversity, in fact, harms financial performance, should companies abandon it entirely??

Michael Porter and Mark Kramer provided a cosy rationale for this through their theory of "creating shared value." This is based upon the notion that capitalism can drive forward societal progress. Long-term commercial maximisation creates social benefit, they argue.

This philosophy has spawned cultural assessment methodologies that prioritise the financial aspects of cultural change. It is almost impossible to imagine an HR director arguing for wellness at work policies without the caveat that "happy employees mean happy customers" or some other business outcome identified through the value service chain. The issue is not that this is inherently wrong — although confusing correlation for causality is often the first casualty when it comes to "proving" this sort of assertion — but that it is unquestioned and taken as "fact."

Perhaps the most extreme example of this is the adoption of the term "human capital" to describe people. As a term, it has its origins in academia. But its wider adoption since the 1980s has served to arm HR directors with a cloak of credibility as they endeavour to win the "seat at the table" they feel is rightfully theirs. The fact that their contribution must be measured in the language of "capital" serves to underline the pervasiveness of financialisation.

The Oxford English Dictionary defines "capital" as follows:

"Material or financial wealth, accumulated by an individual or a company, that can be used to generate income."?

Language matters. When senior executives start to use euphemisms of this sort to describe the world, they are doing far more than providing a shorthand. They are, in fact, distancing themselves from the potential consequences of their actions. When layoffs become RIFs ("reductions in force"), the human and emotional impact is reduced. If workers are human capital, the same decision-making process that might be used to sell off some old machinery applies.

In conclusion

My intent in this piece is not a wholesale dismissal of sincere attempts to improve organisations. Things can and do work. However, this is only when people and their day-to-day experience of work are central to any effort. Perhaps we have lost sight of a human-centred approach to culture change. This may be why such limited progress has been made.?

The naturalised assumptions that underpin our efforts have largely served to hamper us. Having been a part of the culture change industry, I have to conclude that it has become distanced from people with an increasing emphasis on models, frameworks and measurement.

In my career, I have heard too many people describe their workplace as a source of anxiety and angst. Experiences of this sort might not be typical, but work should be and can be a source of meaning and fulfilment. Understanding this, and bringing alternative perspectives on how this might happen, is important.

As Studs Terkel, the brilliant mapper of oral history puts it in On working, work "is about a search, too, for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor; in short, for a sort of life rather than a Monday through Friday sort of dying."

This piece first appeared in Starling Insights' newsletter on October 6, 2024. If you are interested in receiving our thrice-weekly newsletter, among many other benefits, please consider signing up as a Member of Starling Insights.