The Impact of Management Systems on Workplace Culture

Every company has “systems”. There are “hard systems” like IT and “soft systems” like organizational design that help form the DNA of any business. Even if a company has a clearly articulated strategy, dynamic leadership and an engaged culture, these “systems” can hamper or even sabotage any change initiative. In other word, management systems and workplace culture are related.

When organizations begin, they experiment with various methods of getting things done. Eventually best practices are determined and systematized. Efficiency demands that these practices become standardized and routinely repeated by everyone who completes the task.

In every company there is an archive of un-written systems that are the “code” underlying the organization and operation. We may understand this to be the culture of the organization but in fact it is the management system that has been either chosen or more often adopted over time. This “code” may or may not be aligned with the desired culture of the organization.

Management systems include all of the working methodologies that support the normal operation of the organization. For some organizations these are a hodge-podge of ideas that have been implemented over time. They could include: Total Quality Management (TQM), High Potential Employee Identification, Performance Management Systems, Change Management, Succession Planning, Annual Strategy Planning exercises, CRM (customer relationship management), Employee Empowerment programs – it goes on and on.

At 1-degree we have come to realize that these systems are neither good nor bad. Systems are needed. The problem comes in when they are inconsistent and/or have conflicting underlying principles. Fundamental beliefs about how the world works are embedded in these systems and over time these beliefs might have changed and the systems haven’t.

Spiral Dynamics, a framework of human development developed by Don Beck, provides a useful lens to inspect company systems. We find it hugely helpful because the way that leaders see the world is critical. Beck identifies eight stages of growth that result in very different worldviews, values, preferences and purposes. The worldview of a leader is a major influence on the design of organizational systems.

If a leader believes that people cannot be trusted then the employee expense system, for example, would likely demand proof and justification for every expense item. The basic belief informs the systems and those systems naturally support that way of looking at people and the world.

Understanding the stage of development of the CEO of a company (or a dominant board member) is fundamental to getting systems aligned with purpose, culture and leadership practices. Culture is held in place by systems.

If the CEO of a company believes that, for example people are motivated only by money then you should expect that the incentive plans for people in that company would have individual targets with personal incentive for exceeding expectations.

If the CEO of a company believes that people are intrinsically motivated to do their best, to grow and contribute then you could expect incentive plans focused on participation in overall team results.

Neither of these scenarios are wrong. Both work. The difficulty comes when there is management change and the worldview of the current leader does not match the “system” in place. Using our example, a leader creates confusion when they don’t believe that people are motivated by money, yet the highly individualistic compensation system is still in place from a previous management regime. The walk (compensation system) is not aligned with the talk (people are not motivated by money). Consciously or subconsciously these disconnects reduce trust in management.

In some organizations we have seen stages of development differences between executives. One executive arguing strategy or policy from their worldview and another arguing from a different worldview is problematic. The employees in this company will align with the leader whose worldview matches their own. Life makes sense. What happens over time is that silos and divisions occur because leaders want to have integrity in their area of responsibility. This shows up in systems, values, processes, etc. and this is all fine and good except when processes span divisions.

Stages of human development are not good or bad, right or wrong. They simply are. Creating a great workplace demands that we reduce confusion and inconsistency. It also requires alignment on world views and guiding principles for organizational systems.

How to investigate your management systems and workplace culture

  1. Review/audit your common management practices/systems and ask yourself what beliefs are supported by the way that things are done at your company?
  1. Dialogue – Have a discussion with the executive team regarding some topics like:
    1. Can people be trusted? Why or Why not?
    2. How are people motivated?
    3. Do performance results trump cultural fit? Why?
    4. What is the reason you measure various elements of performance in your company?
  1. Determine desired state – What new practices need to be embedded in the systems of your company as a result of the discussion and the audit? Consciously update them so that they represent a consistent set of beliefs and values.
  1. Adjust high priority systems – Implement this change in a staggered way and put energy into training leaders/people accordingly.