Role of Culture in Influencing How we Make Decisions

Culture definition

Organizations have cultures. Apple has a culture, Microsoft has a culture, and IBM has a culture. The Macedonian army had a culture, and so did Roman legions. The Wall Street Journal, the New York Times, the Economist have cultures. Cultures persist when so many other things float in change.

Culture is a living thing. What we talk about, how we go about doing things and making decisions are all aspects of culture. The word itself is based on a term used by Ancient Roman orator Cicero to describe the cultivation of the philosophical soul, considered the highest form of human development.

We practice culture in what and how we acquire and maintain knowledge, belief, art, morals, law, custom and any other capabilities and habits. This evolving aspect of culture as in the deliberate or automatic development of habits and capabilities is the reason we say culture eats strategy for breakfast. The key is to shift our attention to the verb equivalent. To have a culture means to inhabit a place sufficiently intensive to cultivate it—culturing, so to speak.

For example, when we shift focus from strategy, the noun (static), to strategizing, the verb, we reflect the dynamic nature of dealing with real time information as we make decisions rather than the static acceptance of hooking our actions onto assumptions.

Culture is dynamic, too. It's easier to see its evolving nature in small organizations and startups because we are more naturally open to have an active role in creating and cultivating it. Institutions and corporations are mature versions in that cycle. Because their main focus in replicating at scale to maintain their position, they trade verbs for nouns to add a “take it or leave it” clause to “this is the way we do things here.”

Role of culture in influencing how organizations make decisions

Companies start small. Which is good for establishing culture. But not easier. Because each choice we make when we want to bring something new to the world can be both simplethe buck stops here and scarywe are solely responsible to make it work. Which makes us accountable to the idea and its execution along with the people who join us to do the work.

Responsible and accountable to culture is a verb thing, we renew that active and continuous involvement as we go about making decisions that affect the business. In this sense, culture is a pillar of how we go about strategizing. At Pixar, Ed Catmull held his own feet to fire when put to the test.

As the company started to have some success with its movies, it would have been easier to ease off a little and replicate its success using a formula. But, part of Pixar's vision was to bring extraordinary experiences to life. Sometimes that means discarding product that doesn't do the job. That is painful and costly.

But when we make that decision we communicate something with clarity—what we stand for and thus hold ourselves accountable to deliver.

Catmull says:

Restarting something that doesn’t work is costly and painful, but in doing so, we send a major signal to our company. But there are other signals, too. We put short films at the beginning of our movies. Why? Nobody is going to go to a movie because of the shorts, and neither the theater owners nor Disney gets any more money because of them.

So why do the shorts? Well, we are sending some signals. It is a signal to the audience that we’re giving them more than they’re paying for, a signal to the artistic community that Pixar and Disney are encouraging broader artistic expression, and a signal to our employees that we’re doing something for which we don’t get any money. While they all know that we have to make money and want us to, they also want a signal that we are not so driven by money that it trumps everything else.

We have many expressions for it— like walking the talk, putting our money where our mouth is. The activation of culture is in the behaviors of an organization. Another example from Catmull about Pixar:

Here is a simple example, so simple that most people would overlook it: our kitchen employees are part of the company. I think a lot of companies overuse the phrase “our core business”—for instance, “making food for our employees is not our core business.” So they farm it out. Now, in a lot of companies, including ours, there are certain things you do farm out. You don’t do everything yourself. But this notion of “our core business” can become an excuse for being so financially driven that you actually harm your culture.

If you farm out your food preparation, then you’ve set up a structure where another company has to make money. The only way they can make more money, which they want to do, is to decrease the quality of the food or service. Now we have a structural problem. It’s not that they’re bad or greedy. But in our case, the kitchen staff works for us, and because it’s not a profit group, their source of pride comes from whether or not the employees like the food. So the quality of food here is better than at most other places.

Also, the food here is not free—it’s at cost. Making it free would send the wrong signal about value to the kitchen crew. Everybody loves the chef and the staff. We have people who are happier. They’re not gone for an hour and a half because they’re going somewhere else to get a decent meal. They’re here, where we have more chance encounters; it creates a different social environment. That’s worth something to us, to our core business.

Culture impacts the decisions we make and it becomes visible in the experience we provide.

Two examples from everyday life. Many townships in America and cities in Europe provide sewer services. When that is the case in the U.S. the local administrative institution runs operations. That includes billing.

What happens when a bill is lost? Which does happen. As a citizen, we experience the institutional nature of culture—the system is organized to serve its bureaucracy (the real customer) and not the paying customer, the citizen. How do we know? The next bill comes with an automatic “take it or leave it” late fee tax. That's how those types of institutions deal with uncertainty—did the bill get lost in the mail, was it ever delivered?—by defaulting in favor of certainty, what it knows, that it wasn't paid.

Private companies typically give us the benefit of the doubt and add the previous bill to the following one to be paid in full. Why is that? Because they understand who the real customer is—in some cases, they also care about the experience of dealing with them and want to make it good. It's a simple and cost effective way of dealing with uncertainty rather than taking the call, which is more expensive, and dealing with customer attrition.

The township prefers the system to take care of it. Anyone who had dealt with the effects bureaucracies on consequences knows how frustrating it is.

How many corporations are forgetting where they came from, who their real customers are, and what they are actively responsible and accountable for delivering along with their product and service?

So what?

Culture gets personal. Because we are on the receiving end of its consequences. But also because we have a personal culture.

It's easier to see it reflected when we say or imply “because I say so” in our decision making.  Even if we're not aware of it, our personal culture, which comes with us at birth, develops in two parts, 1./ when we discover it, and 2./ when we then consciously (or less intentionally) go about constructing and reinforcing it.

Why do we need a personal culture? Like organizations, we draw from it to support and empower us in our choices.

Our personal culture evolves with us when we do the work. The stronger our personal culture, the more it works to attract or repel things that are in accord with it or different. Why? Because the proof of culture is the experience of it.

How does culture show up?  In the choices we make when we're alone and also when in a crowd where we are susceptible to social pressure.

The relationship between our personal and professional culture is a conversation where we make trade offs. We may be aware we do it, or it may happen automatically. Maybe our values are so deep and we have internalized them so effectively that the choices we make, even when they are automatic, reflect them. Maybe we didn't. In that case, the decisions are made for us (and we go along when we put up with it.)

It's trickier when we reach some form of success. Because we may confuse spectacular success with being right rather than holding ourselves to the fundamentals of doing the work. Which draws from deep introspection. Without it, we may get to wrong conclusions.


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