The Value of Culture

Part of the big shift which is taking place in business and society derives from a fundamental breakdown in what one could call a piecemeal or single issue approach to life. One of the most common responses of politicians, businesses, but also everyday people to the increasing complexity of life is to focus on the one facet of their reality which they think they understand, and then to push for changes for the better. Single issue strategies are vulnerable to compensating feedback, however, and are never productive in complex systems for the system as a whole. But they are downright dangerous when they are raised to the level of a social ideology. It is, for example, one of the central tenets of market fundamentalism that the striving of individuals to optimize their personal gain results in greater wealth for everyone. Within a properly regulated market system, this is often true. But when the strategy individuals use to lever up their personal gain is to export the costs of their strivings to the system by trashing regulation, everyone becomes poorer, as the system becomes corrupt and collapses from misuse.

In my early days as a consultant, I remember doing sales projects in which managers pushed for improvements in revenues or margins, ignoring the effects on customer relationships or employee motivation. One pharma sales representative told me the story of how, when her managers tried to increase sales by mandating higher doctor visit ratios, one doctor’s receptionist blocked her by claiming he wasn’t in. She saw patients going in and out of his office, but when ignoring the receptionist she stormed in to see him, she found the doctor climbing out of the ground floor window of his office to go to lunch so that he wouldn’t have to run the gauntlet of sales reps stalking him in the waiting room.

Just learning the ropes, I never failed to be surprised at the surprise of managers about the unintended consequences of their piecemeal actions. Later, I learned to be unsurprised at the subsequent blame game and reframing of the facts to explain why things had gone wrong. What never happened, however, was that someone stopped to reflect on the big picture. That was not how they thought, or were incentivised.

What I learned through this and many other experiences was that a single issue focus in a complex world is a recipe for disaster.

As individuals, we easily fall prey to a combination of baser instincts (fear, greed, power, envy…), and simple-mindedness (magical thinking, immediate gratification, results obsession, fundamentalism…), which mixed together lead to disaster. Only cultures–for certain historical periods and for a time in some companies–are able to ameliorate the effects of our baser individual tendencies, by providing the framework of social norms and formal rules, common vision and shared experiences, which help to focus our minds towards, and make our individual behaviours productive of, some healthy common purpose.

In his new book, Boomerang, Michael Lewis explores the nature of several western cultures as mirrored in the financial crisis. Put in a dark room with the endless amounts of money provided by the credit bubble, what, he asks, did the people of various cultures want? What follows is a wonderfully vivid description of various experiences of cultural failure. The behaviour of bankers in Iceland, Greece, Ireland, and Germany all exposed shadow sides of their cultures. But Lewis seems to have used the failure of others to prepare for his insights into those at the heart of the crisis in America, as exemplified by California. What Californians wanted, he writes, was a free lunch, and they were willing to bankrupt the state they depend on though a combination of high wage demands and tax revolts to get it.

Thomas Friedman seems to pick up in his new book, That Used to be Us, where Lewis leaves off, describing the formula of social commitments and formal rules which made America great (education, infrastructure, imigration, R&D, and regulation–all government sponsored), and how it is that its downfall started when the people collectively took its eyes off the cultural ball after the fall of the Berlin Wall, becoming complacent, and enabling baser individual strivings at the expense of the common good in the magical fantasy that history had come to an end with the victory of free market economics and the American way. It is in the global South and East that people have learned the positive lesson of America’s rise. He writes that Singapore and China, for example, have become successful by focussing on culture, building a collective framework designed to channel individual striving to enable general progress.

For Friedman, it is not only the focus on culture which he hopes Americans will recover, but an understanding that the project of culture itself has changed. What is needed today to create value in the shifting landscape of production is for people to become “creative creatives” and “creative servers” (as opposed to routinized drones). Innovation is the key, and the path we find behind the door when we open it is one of continuous personal and cultural transformation. Value in the flat, IT networked world, he argues, is created through three faculties: critical thinking, communication, and collaboration, and success depends on the continuous reinvention not only of what we do, but of who we are.

To add value, it would seem, we need only foster the “Three C’s.” It is not possible to do so on any significant scale, however, in a cultural vacuum. The war of simple-minded positions in America mirrors the failure there of the social contract. Greek prolifigacy, Italian gridlock of stakeholder interests, and the Germans’ still unresolved ambivalence about political power describe just some of the cultural challenges facing the West, if it is master the shift. Nothing is more destructive of creativity than corrupt and stupid institutions, as individual creatives are of little use to a society which cannot integrate the processes and the results of their work into the fabric of its social life.

Today, creating value depends on the creativity of people. However, what is effective in developing creativity is not to train skills, but to create environments which enable people, and to support them with insight and mentoring to master the challenges they take on. That is why training and coaching only have a collective effect as a contribution to cultural development, and why it is cultural development for institutional innovation on a global scale that we need to invest in and make our contribution to.

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