The Dark Side of Corporate Culture

By Matthew Richter

More and more, over the last several years, I encounter clients who are very focused on maintaining their company culture. Culture, for them, is defined as “Our Company’s Way of Doing Things.” In other words, a vague, all-encompassing descriptor for an environment the majority of senior executives/ founders are comfortable working in day to day.

“Cultural fit” is used as a filter for hiring and often an excuse for firing. Cultural fit is also a synonym for, “We like him.” I do need to clarify that I am not rejecting the notion that companies have a specific culture. They do. And I am not objecting to a company’s leaders asserting their vision of a set of values and attitudes that define how the firm operates. I am objecting to culture as a barrier to actual diversity—an excuse to reject difference as a means to maintain comfortable ways of looking at things. I am also objecting to the hypocrisy of espousing a value of diversity but then condemning those who don’t fit into the “company way” culture.

Many years ago I worked with a small organization where the CEO and President were the founders. The company had been extremely successful and a big part of the reason was the sheer force of will and experience the two of them had in the field. They also hit the market and the economy at the right time and place. They were both extroverts. They were both highly assertive and valued speed. They were collegial and fostered a bit of a fraternity environment. Few women were in leadership positions and a good amount of informal meetings occurred at a local bar or on the golf course. 

The executive team put a huge weight on “fitting in.” They referred to this fit as their culture. The problem was, they rejected hires who did not fit their profile of a good fit. People who may have had unique and powerful perspectives that quite differed from theirs were turned away. At the same time, the company strived to hire diversely in the traditional sense. But, this diversity was in many ways merely superficial. Different races, different religious backgrounds, and different ethnicities were all great as long as they were still a “fit” for the fraternity-like environment. So, people who were very serious, people who had a more academic approach, and people who thought more reflectively and methodically were not valued. They didn’t “fit.”

As a result, as the Great Recession hit, the company was filled at the top with leaders who viewed the problems the same way, came up with similar solutions, and struggled for the next five years. I am not going to claim that I can read alternative timelines, but I would bet they might have analyzed and addressed the issues differently if they had more diversity in how they thought and reacted. And, yes, I do appreciate that at least in this environment, traditional means of bigotry and prejudice had been transcended (I think the lack of women in leadership had more to do with them not fitting into the fraternity culture than it did because of their gender). 

This lack of diversity is in many ways even more specious when we consider how vociferously organizations espouse diversity—even cultural diversity. They want the appearance of global multiculturalism but don’t want the actual result it brings. They want the visual but don’t want diverse thinking styles or approaches to solving problems. They want to be surrounded by people like themselves. Digging deeper, this doesn’t necessarily equate to a room full of “yes” people. It is more about debate, discussion, and conflict approached in similar ways. In a fast-paced culture, slow and methodical is perceived as plodding. Or, as in the case of another customer, the executives fostered a culture of positivity to such a degree that even words with a negative implication were taboo. In this culture, any perspective that explored risks and problems was perceived as a naysaying perspective. Complaints were viewed as being unsupportive of the team. Still other organizations sometimes diminish the individual in favor of the team, or favor individual achievement over team functionality.

Let’s take a small detour for a moment and discuss the assertion that cultural diversity is actually valuable. It is certainly a politically correct value, but is there a business case? In May, 2014, Tim Smedley wrote a great summary of the research literature for the Financial Times that demonstrates the correlation of a diverse workforce to profits and margin, and also proves that there is a causal relationship. The research Smedley refers to starts with analyses focused on race, ethnicity, and gender, and then moves to the impact other individual differences make on innovation and overall productivity. Click here to see the FT article. A 2014 article by Katherine W. Phillips did a similar survey of research, but looked at it from the perspective of whether surrounding ourselves with people who think, act, and are different from us, leads us to be more innovative and better at solving complex problems. She points out that with traditional forms of diversity this seems obvious, and with social diversity (what I have been referring to as cultural diversity) we see similar results. Click here to see the Scientific American article.

OK, back to the point. Culture is definitely integral and inherent in organizations, sure, but there is a dark side to focusing on company culture when it undermines diversity. While teams may feel on the surface that they are more effective when everyone on the team gets along and thinks the same way, research has shown over and over that a diversity of thought and style enhances the number of solutions to problems, mitigations for risks, and opportunities seen in the environment.

So what can your organization do to mitigate ignoring or avoiding a diverse workforce? Here are just a few suggestions:

1. Focus hiring decisions on matching a candidate to a pre-determined set of knowledge and skill for a given position. Define what needs to be done and get the person that can do it.
2. Have a diverse group participate in hiring decisions. Don’t just have one person or one clique make the decisions.
3. Promote heterogeneity. Get rid of passé policies and rules that promote sameness. Make valuing difference a part of the espoused culture.
4. Reward diverse thinking. Promote diverse thinking at the top. Ensure the executives actually value difference—otherwise you are in trouble.
5. It’s OK to minimize difference that is disrespectful. It’s OK to avoid difference that undermines productivity. Meanness and cruelty are not alternative forms of difference. Don’t confuse them with accepting difference.
6. Having a culture (See? Culture can be good.) of difference does not exclude having tough goals and targets, or a value for hard work.

And here are some suggestions for how you personally can increase your acceptance of diverse ways of being:

1. Say “Yes, and…” Take a page of improvisational theater and ask yourself how you can take others’ ideas and build on them—making them better, together.
2. Ask yourself how you can make your colleagues and team members successful, especially if their ideas and approach to problems are different than yours.
3. Ask questions when faced with ideas you disagree with in a meeting. Instead of accepting your probable first impulse and rejecting the idea, clarify and confirm your understanding. Explore it more.
4. Ask yourself why another person’s idea won’t work. Then ask yourself why it will work. Have an internal dialogue exploring before you have an external dialogue with others.
5. Listen before judging.
6. Hang out with people that are different, even if you are initially uncomfortable with them. Reflect why you are uncomfortable and try to see the value of the interaction.
7. Assume value in what others say and do before assuming bad intentions.

Yes. As you can see, many of these suggestions are common sense, interpersonal dynamics actions. Supporting cultural diversity ain’t rocket science.

Companies run a great risk when corporate culture becomes a high priority. The risk is a loss of appreciation for the many other factors that make humans diverse. There are approximately 62 types of individual difference. Race, ethnicity, one’s generation, and gender are just four. Education, socio-economic status, political affiliation, thinking styles, personality, introversion/extroversion, and so many more are also factors we need to consider when creating a diverse work force. Company culture, as utilized in today, limits diversity. And any organization that truly values a multicultural perspective and a truly diverse workforce needs to avoid the trap that many institutions have fallen into in the name of “corporate cultural” awareness.

I am not the only person who thinks this way. Lauren Rivera, a professor at the Kellogg School of Management wrote a great article in the New York Times on May 30, 2015. I highly recommend a look. Click here for the article.