Supervising organizational culture

Mostly, companies don’t fall prey to a business drama because of poor products or services. Instead, it’s often because of how people behave: decision-making, problem-solving, and collaboration. In other words: the organization’s culture.

Business dramas always follow a similar pattern: while the (short-term) results seem fine, the drama germinates, unfolds slowly and suddenly becomes clear in full size. Whether it is about accounting scandals (Imtech, Vestia), corruption scandals (Ballast Nedam), or harassment in the workplace (Talpa / The Voice): such dramas have been in the making for years. When we learn about them in the media, it is often an apotheosis of long-term development. Business dramas powerfully underscore how much the organizational culture is relevant to a company’s long-term success. This begs the question: what are the possibilities for an organization’s non-executive board to supervise culture?

Culture is complex but decisive
It is easier to manage costs or cash flow than culture or behavior because culture is more complex and often more elusive than financial figures or key performance indicators. Culture also goes beyond compliance. For example, a non-inclusive organization, where leadership only promotes certain people, could still be fully ‘compliant’ with the applicable rules and regulations. The lack of inclusiveness could still backfire, for example, because its reputation in the labor market deteriorates. Or because lack of inclusiveness reduces the agility of the organization.

Often, organizational culture is considered a given that is hard to change. It goes so far that leaders often regard culture as an obstacle to change. For example, a study under 85 ‘Fortune 1000’ companies showed that the use of Big Data and artificial intelligence does not yet lead to expected improvements. For the fifth year in a row, ‘cultural barriers’ were the main obstacle. And that is peculiar because culture is pre-eminently a long-term factor that directors and supervisory boards can monitor and influence.

Moreover, culture can be made specific. It does not lend to hollow rhetoric because employees always test the preached values to the actual behavior in an organization. Behavior contains information for supervisory directors to act upon. Because it always reflects the values that truly matter in the organization. For example, consider an organization where ‘Teamwork’ is a significant value. When management consistently promotes those who profile themselves at the expense of others, it is clear that the actual value is more something like: everyone for themselves.

It’s the culture, stupid!
One of the Bill Clinton election campaign pillars in 1992 was the US economy. Internal communication constantly pointed this out: “It’s the economy, stupid!” This phrase eventually became the campaign tagline that contributed to Clinton’s victory. This one-liner, somewhat rephrased, is equally suitable for long-term supervision of organizations: It’s the culture, stupid!

A culture is a long-term object of board supervision
There are national codes for good corporate governance. It is the responsibility of supervisory boards to monitor whether actual behavior reflects this code well. It can relate to the quality of directors, their vision on reality, cooperation, and the (informal) balance of power. But also to behavior that they observe elsewhere in the organization. Whether that behavior aligns with the criteria and long-term business interest becomes clear through dialogue, observations, and verifying information. Non-executives are ideally suited to test whether an organization’s culture serves its long-term interest. An organization’s culture can be more explicit subject to supervision. It requires an effort by supervisory boards, which will pay dividends in the long run. That is because solid cultures are the pillar of unicity and change capacity of organizations. The same applies to allowing a culture that is not in line with the long-term business interest: that also pays itself in the long term, but in a negative sense.

The Blessings of Micromanagement

Micromanagement can be defined as a management style characterized by the need for extreme control and attention to detail. In general, this style has a negative connotation, especially because the attention to details gives the employees of the manager in question a constant pressure – ‘is ​​it never good enough’, ‘is it never finished’? – and a perceived lack of freedom.

Extreme attention to detail also carries the risk of losing sight of the big picture and more important priorities. And, last but not least: work as such does not become more pleasant when people are ‘micromanaged’.
Is there nothing positive to report about micromanagement? It just depends how you look at it…

Eleven Madison Park
There is an interesting documentary series on Netflix: Seven Days Out. This 2018 series documents the events – and the accompanying excitement, setbacks and dramas – seven days leading up to a major event in sports, fashion and aerospace, among others. One of the episodes is devoted to Eleven Madison Park, at that time voted the best restaurant in the world and in possession of three Michelin stars. The owners, Chef Daniel Humm and General Manager Will Guidara explain that they are driven by the ambition to be the best restaurant in the world. The documentary records how they work in great detail to prepare the restaurant, seven days before its reopening after a renovation. Halfway through the episode, Guidara gives his view on their quality ambitions: “We see excellence as thousands of perfectly executed details. If you can focus on every single detail, and not on the whole, then you start to get somewhere.” To illustrate this, Guidara gives a concrete example: “Every plate in the restaurant is placed in such a way that the logo at the bottom of the plate is turned towards you”. In such a way that if you turn the plate over, you see the logo of the tableware neatly upright. Will Guidara says about this: “Does anyone notice? No. Why does it matter? It means that when we put up signs, we do it with more intention .

Intention as a driver for quality and perfection to a level that no one notices anymore. Except maybe that one person wondering what the tableware brand is… anyway, the micromanagement of the owners of Eleven Madison Park has created one of the most successful restaurants in the world.

Pixar Studios
Pixar Studios is also a good example of micromanagement. Pixar is one of the most successful film studios and an organization in which creativity and quality are embedded in the organizational culture. All aspects of every film are meticulously scrutinized and produced, from idea to realization. For example, production teams hold daily review meetings in which the development of an animation film is discussed. The team members are expected to assess the work of their colleagues in great detail and without restraint: what is wrong, what is missing, what is unclear in the animations? And every few months, the progress of production of the entire film is reviewed higher up in the organization. According to the same principle: what is not good, what is missing, how can it be improved? All this with one goal: “to make a great film, with great people”. Because that’s Pixar’s mission. And with results, because Pixar’s films are all blockbusters and have won many awards.

Thrive because of micromanagement
How come in these examples the teams and organizations do not perish because of micromanagement, but thrive because of it? That’s because micromanagement focuses on the quality of products and services – not the way people do their jobs.

Conscious culture
This requires a corporate culture in which it is clear to everyone that the quality of the end result is what matters most. Every aspect of the product or service is evaluated in detail and (continuously) improved. It also means a high degree of psychological safety: it is safe for people to speak out and experiment. Or to make mistakes. “Fail early, fail fast.” is one of Pixar’s mottos, because when it’s safe to make mistakes, progress is made faster.

You can micro-manage things, but not people
Quality is about details. And the higher the quality ambitions of your organization, the more attention should be paid to ever smaller details. In the case of a restaurant, it may concern the placement of the crockery, in an animation film it may be about the detail of a shadow in the drawing. Because extreme attention to the details of a product leads to extreme quality.

That is the area where micromanagement pays off. This can only be done sustainably in a working environment in which employees are involved in the ambitions of the organization and at the same time can give substance to their work in their own way. In other words: a thousand perfectly executed details give you distinctive character. People give up on people who try to micro-manage them. But things can micro-managed just fine.

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