One of the paradoxes of culture is that they are simultaneously centralized and decentralized. That is, while there should be a consistent, singular culture in your organization, you will also invariably have different subcultures that emerge. The larger your organization, the more apparent this will be.
But sub-cultures are a double-edged sword. Sometimes the variation is exactly what that group or location needs to be more successful, and sometimes the variation is preventing them (and perhaps others) from reaching their potential. For example, I will often suggest that certain departments, like finance/accounting, are likely to have a different culture based on the nature of their work. If you have a culture rooted strongly in creativity and innovation, there might be limits in applying that to accounting—your desire for innovation doesn’t change the fact that you still want the debits to equal the credits.
But you need to be careful with that. While you may not need or want to innovate your basic bookkeeping, there’s plenty within finance that could be innovated. I read recently, for example, that Netflix has recently moved to a rolling nine-month budgeting process. That is, they do an entirely new budget EVERY THREE MONTHS, and each one only looks nine months out. People tend to freak out when I them about this, giving me the “But you can’t do that!” look. Yet they are doing that, and this creative response to the fast-paced environment in which Netflix finds itself came from a finance department that is clearly willing to be creative and innovate.
So while subcultures can work, they need to be actively managed. It goes like this.
Step 1: Align culture with success drivers. We call this culture design, and nothing works unless you do this first. You need clear statements about the behaviors valued in your culture and why they make you successful. And then you need to adjust internal processes, technologies, and structures to bring that culture to life.
Step 2: Measure and monitor progress in your culture work. Companies frequently skip this step, but this is where you will discover the subgroup differences. And I don’t mean running another overall culture assessment—I mean developing metrics specific to your culture priorities so you can see who’s living it and who isn’t.
Step 3: Let sub-groups make the pitch for culture variations. Once you’ve found groups that are doing things differently, then offer them a chance to show you that their way actually helps them to be more successful. They can’t rest on vague defenses here (We’re finance, so innovation doesn’t apply to us). They have to show that they understand why the overall culture drives success and can make the case that deviating from that in their case will make them even more successful.
If their pitch is successful then you have a sub-culture. If it’s not, then you have to do some work to bring them in line with the culture, which could involve transitioning some people out of the organization. This is the work of culture management, and, to be frank, if you want to reap the rewards from the hard work you do around culture design, then you need to step up and do the management work on the back end.