Every organization has its subcultures. How do you know when they’re a problem? In episode #3 of The Culture Kit with Jenny & Sameer, hosts Jennifer Chatman and Sameer Srivastava answer a question from Yogaraj (Yogs) Jayaprakasam and offer a surprising take on the value of subcultures.

Jenny & Sameer’s 3 Main Takeaways:

  1. Awareness – know what subcultures exist within the organization and anticipate the possibility that they conflict in dysfunctional ways.
  2. Agility – be willing to try out different cultural priorities. Before deciding that the counterculture is necessarily problematic you should look at what it is solving for.
  3. Alignment –  prioritize one cultural norm that applies to all units and unifies the organization rather than trying to be perfectly aligned on everything.

Show Links:

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You can learn more about the podcast and the Berkeley Center for Workplace Culture and Innovation at https://haas.berkeley.edu/culture/culture-kit-podcast/.

*The Culture Kit with Jenny & Sameer is a production of Haas School of Business and is produced by University FM.*

Transcript

How to Manage the Tricky World of Workplace Subcultures

Publishing Date: Apr 30, 2024

[00:00:00] Sameer: From Berkeley Haas and the Berkeley Center for Workplace Culture and Innovation, this is the Culture Kit, with Jenny and Sameer.

[00:00:08] Jenny: I’m Jenny Chatman.

[00:00:10] Sameer: And I’m Sameer Srivastava.

[00:00:13] Jenny: We’re professors at the Haas School of Business. On this Podcast, we’ll answer your questions about workplace culture.

[00:00:20] Sameer: We’ll give you practical advice that you can put to work right away.

[00:00:23] Jenny: Join us to start building your culture toolkit.

[00:00:28] Sameer: Hey, Jenny.

[00:00:28] Jenny: Hey, Sameer.

[00:00:29] Sameer: It’s great to be back with you for another episode of the Culture Kit.

[00:00:33] Jenny: I’m excited to be back and talk about some of the culture challenges that organizational leaders are facing.

[00:00:38] Sameer: Me, too. I have to say I’ve also really been enjoying this format, in which we get to hear questions directly from organizational leaders in their own voice.

[00:00:46] Jenny: There’s certainly a lot to talk about. Let’s hear today’s question.

[00:00:49] Yogaraj: Thank you, Professor Jenny and Sameer, for taking my question. My company is a century old printing company that’s successfully turning into a digital payments and data company. Our growth comes from multiple acquisitions and a very thoughtful technology-driven transformation. People are great and committed to our transformation.

However, sometimes, our culture still feels like a collection of many cultures rather than one unified culture. How valuable is it to unify a culture, and how do you do it?

[00:01:21] Sameer: First, let me thank Yogs for the terrific question. Yogs is a recent graduate of the Berkeley Executive Education Chief Technology Officer program, which I’m a co-faculty director of. It’s so great to hear from you, Yogs.

So, Jenny, Yogs’ question is fundamentally about the notion of organizational subcultures. So, let’s start with a basic question — what does it mean for an organization to have subcultures?

[00:01:45] Jenny: Okay. Well, I will talk about that, but before I do that, it’s worth mentioning that I have a, kind of, dramatic view about subcultures, that they actually can serve as a source of organizational agility. And I know that sounds, kind of, weird because you’d think that being more coordinated, which is the opposite of having subcultures, enables innovation.

But before we provide evidence for my somewhat provocative hypothesis, let’s talk about a way to classify subcultures.

[00:02:17] Sameer: Yeah. So, say a bit more about the different types of subcultures that you see.

[00:02:22] Jenny: So, subcultures come in three types. The first is what we refer to as an enhancing subculture, which is a subculture where people are even more enthusiastic about the overall culture than they are in the rest of the organization. It’s like, the, pepsquad or something for the organization.

A second type of subculture is what we call an orthogonal subculture. This is a subculture that operates in a way that’s different from the rest of the organization, but these differences don’t really interfere or challenge the major tenets of the rest of the organization.

And then, third, I think, is the type of subculture that we all are most familiar with, which is the idea of a counterculture. This is where parts of the organization embrace norms that are in conflict with prevailing organizational norms.

[00:03:12] Sameer: So, Jenny, can you say a little bit more about how countercultures actually get in the way?

[00:03:16] Jenny: Yeah, great question. Because they don’t always get in the way. So, it’s true that countercultures can, at times, undermine the broader culture. But in some cases, they can actually serve as an early warning sign that the environment is shifting. So, in this case, parts of the organization are like first movers.

So, an example of a counterculture emerged at the company, Maersk, the large Danish shipping company. When the company needed to undertake a significant investment in digital transformation, they hired 5,000 high tech people, right? They hadn’t had any before. And suddenly, there was this influx of people who were used to high-tech culture.

So, these folks, as a subculture, put pressure on Maersk across a variety of cultural practices. And one of the most significant shifts that arose from this is that Maersk shifted its culture from a traditional, kind of, buttoned-up hierarchical company to more like the modern technology companies that we see out here in Silicon Valley.

And one of the most significant of those is that they dropped their formal dress code, which was a huge deal. And in fact, it made the whole organization better able to attract and retain essential technology talent.

[00:04:37] Sameer: So, Jenny, I can totally relate to the dropping of the formal dress code. My father worked for IBM for 40 years. And there was a time when they switched away from the formal IBM dress code to business casual. And it was quite an adjustment for my dad.

[00:04:54] Jenny: Yeah, I can only imagine. Did he have to go shopping?

[00:04:47] Sameer: My mom helped quite a bit, yes.

[00:05:00] Jenny: So, aside from discrete differences in typical practices, like how formally people dress, we’re seeing in the research that another way that subcultures can manifest is through language differences. And this is, you know, one of your specialties in your research. So, can you tell us more about how leaders identify the existence and strength of subcultures using natural language processing techniques?

[00:05:23] Sameer: Sure. So, the example that comes to mind is a recent paper I wrote with Anjali Bhatt of Harvard and Amir Goldberg from Stanford. In this paper, which is very much in line with Yog’s question, we examine subcultures in the context of post-merger cultural integration.

Specifically, this was a situation in which a major regional bank acquired two smaller rivals, one of which was fairly culturally compatible, while the other one was actually pretty distinct. And the leadership team kept hearing stories and anecdotes that were bubbling up about subcultures that existed and the extent to which they were more or less problematic. But they really didn’t know the extent to which this was an issue.

[00:06:05] Jenny: Well, that’s interesting. So, how did you and the leadership team figure out where the real problems were?

[00:06:11] Sameer: Well, one way that we, as sociologists, think about subcultures is through what we refer to as symbolic boundaries. These are the lines and distinctions that people draw, often, in really subtle ways in how they communicate with each other, to bring certain people into the fold of their in-group and to exclude others.

And subcultures exist because people are often erecting these symbolic boundaries relative to other groups. Think, for example, about the specialized language or jargon that expert communities, for example, doctors or lawyers or even academics, used to communicate in shorthand with each other, but also often implicitly to keep non-experts out of the conversation.

[00:06:50] Jenny: Well, that sounds like a pretty fancy concept, symbolic boundaries. How do you actually assess this as they come through in people’s language?

[00:07:00] Sameer: So, in this paper, what we found is that there are at least two different ways in which these boundaries get erected following a merger or acquisition. The first is what we refer to as boundary retention, which simply means that people are continuing to communicate in the ways that they did before the merger took place.

The second is what we refer to as boundary reformation, and that’s the idea of constantly coming up with new ways to come up with distinctions that somehow still keep in the foreground the fact that we came from different worlds.

So, the way we measured this is we got access to a large data set of anonymized email messages and we were able to use machine learning methods to classify those messages and thereby measure the strength of those different boundaries. And we could find evidence of boundary retention in many of the branches 18 months after the merger actually happened. We could detect in their language that they came from one of the legacy banks versus the other.

And we could find evidence of boundary retention in many of the branches 18 months after the merger actually happened. We could detect in their language that they came from one of the legacy banks versus the other.

So, Jenny, having talked a little bit about the measurement of subcultures, I wonder if you could speak a little bit to this question of, that you, sort of, hinted at at the beginning. Are subcultures always problematic? And what do you see as the pros and cons of them?

[00:08:10] Jenny: Yeah, I mean, subcultures can be a way for organizations to innovate with less risk and more quickly. And the reason is, you know, pretty straightforward. You’re not betting the entire organization on a new approach, but you’re trying out different cultural priorities in a limited part of the organization to see if it will work in addressing new emerging conditions.

And I’m thinking about an example at Mars, Inc. Their pet care division was ahead of some of the other divisions in developing a really tight alignment between purpose, strategy, and culture, a kind of integration that didn’t exist in other parts of the organization. And it turned out to be essential to really making the strategy crystal clear to everyone in the organization.

It turns out that Petcare set the example of doing this, you know, tight alignment. And then, once other divisions saw the success that was generated from that, they followed quickly, seeing these benefits.

[00:09:13] Sameer: It makes sense, Jenny. I can definitely see some of the benefits of having a subculture. But let’s go back to the thing that we were talking about at the beginning, the risks or downside. Isn’t there really a risk that a subculture becomes so divergent that it actually becomes subversive? How do you know when a subculture is actually becoming counterproductive?

[00:09:32] Jenny: Well, it’s definitely possible. You’re right. And I’m thinking of an example, a very famous and catastrophic example of a failure that could be traced back to a clash in subcultures. It was the Challenger accident of 1986, which ended up killing seven crew members, including the first teacher in space, Christa McAuliffe.

There was a relationship between O-ring failure and the cold ambient temperatures that the Challenger was launched in. The engineering experts who were aware of this tenuous relationship and deeply concerned weren’t allowed to voice their concerns up the management hierarchy because NASA was so hierarchical. It was something they were used to doing within their own division, but it wasn’t possible with this higher profile project.

[00:10:25] Sameer: So, I see some real parallels here to the current situation facing Boeing. And in a later podcast episode, we’re going to come back and talk about a culture of safety and how one can really sustain it, including at Boeing.

[00:10:39] Jenny: So, there are cases where a subculture conflict can actually cause really disastrous outcomes. My own view, however, is that, to counteract these problems, leaders really need to be aware of and measure critical subcultures, right? This is the best path to avoiding situations like this.

[00:11:01] Sameer: That makes sense, Jenny. So, let’s say a leader has become aware of the existence of subcultures, actually, measured the strength of those subcultures and determined that they’re problematic, what does that leader do? How do you create a more unified culture?

[00:11:16] Jenny: Well, the first thing to recognize is that organizational units don’t need to be aligned on everything, since there are reasonable functional differences or product differences or location differences that legitimately drive important cultural uniqueness within an organization. But it turns out that some of the most effective strong culture organizations have one or two cross-cutting cultural priorities that are held up by all their units.

For example, Salesforce prioritizes being innovative all across the organization and even the finance organization, the internal finance organization there, which, of course, is not the product development organization where we would usually see the most innovation, is constantly on the lookout for ways to innovate in their processes. Can you think of other examples, Sameer?

[00:12:13] Sameer: Yeah, so I’m thinking about another entire category of solutions. And you see these across a range of firms, particularly in large global firms such as Nestle, ExxonMobil, or GE. And these are global rotation programs, and we all are familiar with the idea, people get put into these programs, they get sent around to different parts of the organization or different parts of the world for 18 months, a couple of years, and they come back.

And, of course, this can support their individual leadership development, but it also has an effect on these subcultural boundaries, because by building network connections across geographies and groups, we can begin to soften those subcultural boundaries.

So, with that, Jenny, why don’t we wrap things up. What do you think are the big takeaways in response to Yogs’ question?

[00:12:59] Jenny: Yeah. Well, as we’ve done the last couple of times in the podcast, I think we can sum up our conversation about subcultures in three key words. And they all happen to start with “A” this time — awareness, agility, and alignment.

The first thing is that leaders should be aware. of the subcultures that exist within their organization. They should try to anticipate the possibility that these subcultures could conflict in dysfunctional ways.

Agility is about the potential benefits of subcultures. Organizations shouldn’t be afraid to try out different cultural priorities. And this suggests that before deciding that the counterculture is necessarily problematic, you need to look at what it’s solving for. This is really the value proposition of subcultures.

Finally, alignment. Leaders should consider prioritizing one cultural norm that applies to all units and unifies the organization, rather than trying to be perfectly aligned on everything. For example, adaptation, another “A” word.

[00:14:05] Sameer: Terrific. Let’s wrap it up there. Let me conclude by thanking Yogs again for that terrific question. Thank you, Jenny, and look forward to doing this again with you next time.

[00:14:14] Jenny: Thanks, Sameer. See you next time.

Thanks for listening to The Culture Kit with Jenny and Sameer. Do you have a vexing question about work that you want us to answer? Go to haas.org/culture-kit to submit your fix-it ticket today.

[00:14:29] Sameer: The Culture Kit Podcast is a production of the Berkeley Center for Workplace Culture and Innovation at the Haas School of Business, and is produced by University FM. If you enjoyed the show, be sure to hit that Subscribe button, leave us a review, and share this episode online so others who have workplace culture questions can find us, too.

[00:14:49] Jenny: I’m Jenny.

[00:14:50] Sameer: And I’m Sameer.

[00:14:51] Jenny: We’ll be back soon with more tools to help fix your work culture challenges.

Updated June 12, 2024

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