In the age of networked enterprise, strong cultures may turn from assets to liabilities.

We are evolving toward the age of networked enterprise, in which the traditional hierarchies of the corporation will be supplanted by self-organizing systems collaborating on digital platforms.

It will be the era of entrepreneurship, distributed leadership, and the continual reorganization of people and resources. It will be the time of disintermediation both within and between organizations. Layers of management will fall; the need for centralized systems and trusted go-betweens will dissipate, if not disappear.

Or so many experts predict.

As for me? Yes, I do believe this is the future toward which we are slowly advancing. Those of us deeper into our careers may not see it come to full fruition during our organizational lives, but the trends are real, and they are already on display if you care to look for them.

And that makes me genuinely worried for my friends in the corporate-culture business. Because I’m not sure that culture is going to matter all that much in the future — at least not in the ways we conceive of it today.

Jon Katzenbach, one of the field’s most respected and creative thinkers, defines an organization’s culture as “the self-sustaining pattern of behavior that determines how things are done.” It is “made of instinctive, repetitive habits and emotional responses.” Culture is meant to provide a well-rooted sense of purpose within an organization, exemplified by a recognized set of behaviors and shared beliefs. It gets — and keeps — everyone marching in the same direction.

Creating and maintaining culture is, thus, painstaking work. It demands focus and commitment throughout organizations. During my work life, I have been lifted by strong corporate cultures and nearly drowned by weak ones. I have no doubt of culture’s power to align an organization and enliven its workforce. And there are plenty of studies to back that up.

But that’s history speaking.

As to life in the digital matrix, there is reason to question culture’s role. Our relationships to institutions will become increasingly defined by the activity in which we are engaged at any given time. We will come to view ourselves as “affiliates” more than “employees” as we think of that term today. We will encounter new partners and colleagues on a rolling basis. We will weave in and out of relationships and flow across broad platforms of commerce in individual and small-group nodes, working interchangeably with people who belong to the same organization and those who do not.

In this world, we will no longer prize alignment; we will prize realignment.

Such an environment benefits from clear and universal rules of engagement. It does not benefit from habits that are distinctive to one group of people — which is the essence of organizational culture.

In his 1966 book, The Will to Manage, the celebrated father of management consulting Marvin Bower described a company’s philosophy as “the way we do things around here.” Those words helped to establish the role of corporate culture and to solidify its purpose over the next 50 years. But we are embarking upon a time when the “way we do things” will be reinvented with each new collaboration on the network. And in these waters, a tool meant to reinforce consistency of behavior over long periods of time transforms from a motor to an anchor.

I expect that some of you may disagree; I welcome your comments.

12 Comments On: The End of Corporate Culture as We Know It

  • David Blyth | April 13, 2017

    Firstly, I have long argued that ‘strong cultures’ can be enormously valuable for so long as it reflects an ‘environmental fit’. But when the environment shifts against the cultural norms, that same strong culture will be punished by the rigidity of that culture. By contrast, an organisation with cultural norms that are less strongly woven into the fabric of the enterprise may have a better chance of adapting to the environmental shifts.

    This is, of course, contingent on the nature of that culture we are describing as ‘strong’. This model presumes that the culture is market specific. A more ‘generic’ culture – such as Amazon’s highly innovative, long term mindset culture – will not feel the same displacement as this model posits.

    The second issue goes to the description of the emerging networked enterprises. Will this move us to an era of entrepreneurship, of distributed leadership? That may be true, but if it is, it doesn’t suggest to me that culture becomes less relevant. It suggests to me we will see an increasing number of enterprises with more fluid, open and innovative cultures. These cultures will be every bit as important as the cultures of today’s important companies, or those of bygone eras.

  • Patrick Murzyn | April 13, 2017

    Isn’t there an ironic twist that the premise implies a culture of continuously changing the culture?

  • Brad Ivie | April 14, 2017

    I agree with the premise that a strong, common “organizational culture” may indeed be an anti-pattern in the age of digital transformation for the many reasons stated here. However, culture still operates in all social interactions in business. For example, at the micro level, culture feeds mindset which is a key input, along with one’s own abilities, that drives employee / worker behaviors. Behaviors in turn interact with work design, including non-human actors (e.g., technologies, knowledge), in the enactment of discrete work practices. As such, culture still matters greatly. However, in designing work of the future, a different approach to considering culture is needed.

  • Armen Mnatsakanyan | April 15, 2017

    Very important topic and very relevant.
    I agree with the fact that serious changes are coming.
    However, it seems to me, the area in which the changes will happen is different.
    1. The very term “Corporate Culture” will change a lot. From the definition of corporate culture (as “the self-sustaining pattern of behavior that determines how things are done.” It is “made of instinctive, repetitive habits and emotional responses.” Culture is meant to provide a well-rooted sense of purpose Organization, exemplified by a recognized set of behaviors and shared beliefs, only the psychological aspects (feelings, emotions and experiences) will remain. All the rest will be the subject of a new discipline, which I called Managelogia. In the center of Managelogia there will be “General Management Theory”, which will study “how things are done” on the basis of the scientific method. There will be a clearing of management from psychological, mystical, engineering and economic “shells”. What really disappears is the concept of “Corporate Culture” as a relic of the dogmatic, sometimes magical approach!
    2. The role of management as a scientific discipline will increase, but not disappear. “The continual reorganization of people and resources” will require a more professional approach to management. What earlier (and now) could be compensated with brute force (If I’m the boss, then you’re a fool) now have to compensate for high-quality management.
    3. “It will be the era of” “pulsating” companies. The company will be quickly established under certain tasks, grow rapidly and quickly break up into separate parts. Entrepreneurship will be like a game of cubes. I collected a firm from certain cubes, scaled it, then took it apart, collected it again from other cubes for other tasks. In such conditions, the requirements for management will grow very significantly. Actually, there is nothing new here; this is the continuation of the process of “division of labor” in a new round of development. This process has been going on for about 300 years. It is known that the deeper the division of labor, the higher the requirements for management.

  • Paul Hunt | April 17, 2017

    I agree with the sentiment. People will loosely align to contribute their skills to achieve a specific outcome. Some people will organise these ‘affiliates’ and set a vision. However, there is no set-in-stone employee-style relationship. People will come and go as they see fit. Culture _will_ be irrelevant; alignment with a vision will be the main motivation. I hope for this anyway!

  • Aleksandr Zhuk | April 18, 2017

    Thank you for a thought-provoking article! I believe that the “as we know it” part holds the key to understanding the emerging phenomenon. The super-fluid organizations of the future may wish to emphasize certain aspects of how their business is conducted and set aside the others, but choose they will. People strive for order, which might explain that, while there are organizations with strong and weak cultures, there are hardly any organization that exists without having any culture at all.

    Oscan Wilde said that, “Without order nothing can exist–without chaos nothing can evolve.” It’s only natural then that for the new organizational forms to evolve, “organizational cultures as we know them,” may have to dissolve along with the order they are meant to impose. Yet, as new organizations crystalize into being, for them to remain in existence, for as long or as short period of time as it may be, they will need to establish and maintain a certain sense of order–a culture.

  • David Willans | April 18, 2017

    I love it when an idea is taken to its extreme, it really helps you think beyond the present. Thank you.

    Having worked in big corporates, strong cultured small business and networked collectives, I think culture will be increasingly important. But in th world your describing it will be born of people with shared beliefs forming cultures quickly. People who have a shared set of beliefs and values will naturally gravitate towards each other and away from those that don’t share the same values. If you’ve ever sat on a parent committee you’ll know that just having a shared goal isn’t enough, you’ve got to have shared approaches to working together. When these aren’t there it’s painful.

  • Francoise Hontoy | April 19, 2017

    It’s indeed interesting to think about this approach and how it could evolve.

    I would assume that those colleagues engaged right now in “culture” will continue to do so, but will combine their forces with coaches. Culture is somewhat part of the structure of an organization, something people come back to and take as a comforting detail that they understand “how things are done around here”.

    The realignment from one team or project to another will add a dimension to these teams, requiring them to do the realignment themselves to understand how other “do things” and find an agreement for the team. They will add regular realignment within the project as the culture information will need constant adaptation. In a way it will seem to the team members, that they are in a “foreign environment and have not yet understood all the clues of that environment”.

    Subjects like Diversity & Inclusion will change and will adapt to assist in making the networked enterprise successful.

    At a certain stage, people will have to put a lot of energy into understanding culture and getting along in constantly changing cultures and will have less time to learn expertise in their individual field.

    Strong cultures might then simply create a different type of asset than today: Strong and Intuitive Expertise whereas the networked enterprise will create flexible and surface expertise.

  • Egbert Schram | April 21, 2017

    Interesting article – thought provoking – but I would argue the complete opposite. In a world where there is less and less loyalty to employers (and employees) – the role of pro-actively (keyword) managing a corporate culture to enable the organisation to adapt to whatever is thrown its way will only become more important, not less.

    If we switch employees more often and if as an organisation we need to become more and more a project type of organisation (or network based organisation) – it requires us to actively build a culture that reinforces adaptability over being the strongest, best, fastest, largest, or whatever other goal we used to strive for.

    Like in nature, it is the most adaptable organisation that survives changing markets and that requires actively building and maintaining a corporate culture which encourages taking on board new ideas and translating those ideas into changing practices.

  • Patricia Galante de Sá | April 21, 2017

    That’s why I love living systems thinking, because nature shows us all the answers: if the markets and the economy will very much resemble a distributed ecosystem, we must understand that each of its members has a singularity but nontheless within every species they commonalities that define and limit them, so diversity is ‘glued’ by some shared identity. No organization is able to exist without this essence or projected identity, that will attract the myriad of people or companies that will be attracted and collaborate with it, No matter how distributed the system is. Essence and purpose will still be paramount, even more so because the system is so distributed. The collaborators will follow the same pattern of behavior of the species (the company), although being singular in themselves. It is a mistake to think that there is no order or pattern in chaos. So maybe we should say that the new corporate culture will have to be chaotic, but still deeply rooted in a shared essence.

  • Komal Mathur | April 25, 2017

    Interesting article. The main theme here is how `Social’ will impact the way we work and how culture is maintained and yet open to influence and flexible enough to change when required.

    In my 2+ decades of experience in global IT organizations with strong cultures operating in an industry which has seen exponential growth (read – plethora of opportunities for employees), various changes have come about – technological and social. In my view, successful organizations are the ones who have enduring and resilient values.

    For example, while the mode of interaction gets more `social’ via social media (internal/ external to the organization), while the organization structure may become less hierarchical, a value such as `respect’ does not change. It stands the test of time.

    Matrix structures often found in software organizations, thrive on adaptability and this gets built into the DNA of the individual as well as the organization.

    There is no denying the fact that cultures will become more vibrant and open than ever before.

  • Abhijit Bhattacharya | April 25, 2017

    Thank you for such a timely piece.

    I feel the changing nature of the political forces that are coming to power in major democracies will also have a strong impact on formation of new corporate culture.

    It seems to me that as the rate of disruptive changes are picking up jaw-dropping pace, organisations will find it increasingly difficult to create new cultures since human beings are generally comfortable with status quo. At the most, humans are receptive to slow changes. In the past, it was possible for the society to cope up with disruptive changes, because those changes were few and far between and organisations had enough time to evolve new cultures and organisational models. These models in turn help companies achieving high performance for prolonged periods. Over the years, governments all over the world had also developed institutional frameworks for supporting businesses to achieve economies of scale and create conducive organisational culture for mass production.

    Now, when the countries are increasingly struggling to manage growing tension of an innovation-driven era, it seems the governments most often will work as a major barrier for companies that are trying to create a new corporate culture needed for sustainable performance. With fringe elements becoming mainstream in model democracies like the US, France, India and elsewhere, in the coming days I think the governments at various levels will come under increasing pressure from disgruntled elements to act against companies that are willing to experiment with organisational and business model innovations, notwithstanding the fact that such experiments are so essential for better performance under high uncertainties of a disruptive era .

Add a comment