Culture in Organizations

The culture of your organization is either your biggest asset or your biggest liability. Who you are and what you stand for has become the most significant differentiator of organizational performance. Strong vibrant cultures that are vision-guided and values-driven create high levels of performance because they attract and keep talented people and they inspire employees to be the best they can be. A strong positive culture creates internal cohesion and enhances the organization’s capacity for collective action by building trust and nurturing creativity. Your organization’s culture is a liability when it displays a high degree of limiting values and high levels of cultural entropy.

The values represented in your culture, whether they are positive or limiting, become the foundation of your organization. If the foundation is built on positive and supportive values, everything else can be fixed. This is why addressing the underlying issues within your culture and building a solid foundation around positive values will support the manifestation of your organization’s vision and mission, and is imperative and should be the precursor to other change initiatives.

Limiting values can show up as blame, bureaucracy, internal competition and manipulation, and inhibits the smooth functioning of the organization. Positive values can show up as trust, information sharing, and work/life balance.

Cultural Entropy

Cultural entropy is the amount of energy in an organization that is consumed in unproductive work. It is a measure of the conflict, friction and frustration that exists within an organization.

Cultural entropy is a function of the personal entropy of the current leaders of an organization and the institutionalized legacy of the personal entropy of past leaders. Personal entropy can become institutionalized in an organization through the introduction of bureaucratic systems and processes requiring hierarchical decision-making or rigid silo-driven structures. The cultural entropy caused by current leaders usually shows up as excessive control and caution, blame and internal competition, confusion, and long hours.

Cultural entropy shows up at the first three levels of organizational consciousness:

Level 3: Self-esteem Consciousness: Factors that slow the organization down and prevent rapid decision-making, such as hierarchy, bureaucracy, and confusion

Level 2: Relationship Consciousness: Factors that cause conflict and friction between employees, such as internal competition, blame, and intimidation

Level 1: Survival Consciousness: Factors that prevent employees from doing their job and expressing their talents, such as control, fire-fighting, and micromanagement

We measure cultural entropy in an organization by conducting a Cultural Values Assessment (CVA). Cultural entropy is the proportion of votes for limiting values that participants in an assessment pick to describe the current culture of the organization. The majority of cultural entropy is directly related to the personal entropy of the managers and leaders of the organization.

The Values Centre research shows that the values that contribute to cultural entropy are very similar in most organizations. The main difference is the degree to which these values are present. The following table shows the different levels of entropy, which define the level of health of an organization.

Entropy Level Corrective Measures
< 10% Prime: Healthy functioning
11-19% Minor Issues: Requiring cultural and structural adjustments
20-29% Significant Issues: Requiring cultural and structural transformation and leadership coaching
30-39% Serious Issues: Requiring cultural and structural transformation, leadership mentoring/coaching, and leadership development
40-49% Critical Issues: Requiring cultural and structural transformation, selective changes in leadership, leadership mentoring/coaching, and leadership

> 50%
Cultural Crisis: Requiring cultural and structural transformation, a change in leadership, leadership mentoring/coaching, and leadership development. For private sector corporations a high risk of bankruptcy, takeover or implosion

Note 1: Cultural and structural adjustment refers to a selective focus on reducing pockets of high entropy in divisions or departments, or specific entropic values that are found throughout the organization

Note 2: Cultural and structural transformation refers to an organization-wide program of whole system change

Culture and Performance  

                            Recorded Presentation by Robert Sylvester