Culture’s Influence on Performance—Greater Appreciation Abounds

It was John Bogle, the founder and former chairman of Vanguard, that noted that ‘the most important things in life are often the most difficult to measure’.

How true—especially things like trust. In the work world, culture is another ‘thing’ that is really important but is often difficult to quantify. Culture (which some have characterized as how we think and act) is not only a vague notion for some but one that Is next to impossible to put on a balance sheet. Rest assured though that culture (which is inseparably linked to trust) effects the balance sheet and other facets of organizational performance.

This weekend two articles ran on the East Bay Times (a San Francisco Bay Area paper) editorial page (Sunday edition) that highlighted the dysfunction of two public-sector cultures that have had a significant impact in terms of degrading public trust. In my experience, it’s rare for two investigative reporters (on the same day, on the same editorial page) cite culture as the major culprit of discord in their stories. I was harkened by the two investigative reporters, acting independently, that were speaking forcefully about the pervasive nature of culture. For ‘culture deniers’ (whom I run into somewhat regularly, are prone not to give the influence of culture it’s due) these types of articles help put a ‘real-world’ context to the impact of culture. In other words, the two articles give a hard edge (albeit with imperfect measurement) to a supposedly soft subject.

The first public-sector culture under the microscope in Sunday’s article was Caltrans (California’s transportation department) for their contribution in the new eastern span of the San Francisco Bay Bridge. Daniel Borenstein, the article’s author, refers to Caltrans culture as unprofessional—with senior leaders routinely using heavy-handed intimidation, secrecy, and denial as means to the meet the leaders ends. As the article points out, the costs for the eastern span skyrocketed from $1.4 to $6.4 billion. The project suffered significant construction delays and is now is under scrutiny for safety concerns. Not all of these issues have ‘culture’ as the sole cause, but certainly culture is considered a significant contribution. For the complete story see:
Daniel Borenstein Gov. Brown Must Fix Caltrans Culture

The second culture under scrutiny is the Veterans Association (VA). In the VA’s case, it is believed that the silence and secrecy embedded in the culture led to patient deaths. How sad. As author Kate Scannell’s article points out, the VA culture has other troubling issues as well. See:
Dr. Kate Scannell: VA scandal shows we must speak up about the deadly silences in health care

Both of these examples illustrate the very real consequences of a dysfunctional culture. In both instances, trust is on life support. Plus, key performance targets have failed miserably. In the case of the VA, people died. Edgar Schein, an early pioneer in the field of organizational development, may have put it best: ‘culture is to the organization what character is to the individual.’ Both of these examples have been well chronicled in articles beyond the two highlighted here. It’s clear that both these organization’s cultures were by-products of their leadership—in this case inadequate leadership.

Schein also wrote ‘there is a possibility that the only thing of real importance that leaders do is create and manage culture’. Given the era in which Schein made that statement, it was difficult to justify that point-of-view. Today it’s much easier, especially given these two examples.