[MUSIC] You may have heard the saying, culture eats strategy for breakfast. CEOs, consultants, and business gurus often talk about the importance of organizational culture. In fact, listen to some of the following quotes by well-known business leaders about the importance of culture. Louis Gerstner was the CEO of IBM, who was credited with turning around the ailing company in the 1990s. He said the following quote, until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization's makeup and success along with vision, strategy, marketing, financials, and the like. I came to see in my time at IBM that culture isn't just one aspect of the game, it is the game. Or how about this one from the co-founder of Airbnb, the founder and CEO Brian Chesky once said, a company's culture is the foundation for future innovation, an entrepreneur's job is to build the foundation. Or how about this one from Tony Hsieh, the founder of Zappos. He said, our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own. Or finally, Satya Nadella, the CEO of Microsoft who said, the CEO is the curator of an organization's culture. Anything is possible for a company when its culture is all about listening, learning, and harnessing individual passions and talents to the company's mission, creating that kind of culture is my chief job as CEO. So obviously lots of people think culture is really important. But what exactly is culture, how do we build a successful culture in our organizations? How do we change culture to make sure that it helps us achieve greater effectiveness? These are all questions that we'll try to address in this module. Let's start with a definition of culture. Now, you can find lots of definitions of culture out there. But here's one definition that I like, that will serve as the basis for our discussion. Culture is a system of shared values defining what is important, and norms defining appropriate attitudes and behaviors. Now, there are a couple of things to notice about this definition of culture. First, culture is shared, it's not an individual phenomenon. Culture only exists among a group of people. Now, that group could be an organization and that's our primary focus here, but it could also be a division or department within a larger organization, or a work group, or a project team. Culture can also exist at higher levels of analysis such as a city, a state, or a country. Culture at these different levels of analysis are undoubtedly going to influence the culture of the organization. Now, the next part of our definition to pay attention to is that culture is about values. We're going to talk more about this in just a minute, but culture helps point us toward what is considered important in the organization. The last part of the definition has to do with norms, norms are the accepted standards of appropriate action that develop in various groups. So if I walked into your organization, I would probably figure out pretty quick how to dress, how to talk, how to interact with others, whether it's okay to stop by someone's office without an appointment, and generally speaking how to behave. Now, some of those norms or behavior are explicit. You might find them in a code of conduct or a detailed job description, but many of those norms aren't written down anywhere in a formal company document, they exist because of the patterns of interactions among people in the organization that happen over long periods of time. Now, there are a couple of other things about culture that we should be clear on. First of all, when we talk about organizational culture, we often think of one unifying culture that exists throughout the entire organization. Now, that may be the case in some organizations, but in my experience, many organizations especially large organizations can have multiple su-bcultures. There may be a very different culture in the marketing department than what you'll find in the engineering group. In a large organization, there could be pockets of healthy culture, while at the same time there could be pockets of dysfunctional culture. It seems that as organizations get bigger, it becomes much harder to maintain a unified organizational culture. Finally, remember that when we talk about culture, we're viewing the organization from a natural system lens. Culture is ultimately about the organization as a social entity, it involves the people in an organization and their interactions with each other. That means it gets a little messy, culture is affected by lots of different elements, some of which are beyond the control of organizational leaders. The health of your culture is hard to measure, cultures develop over time and are hard to change. But despite this messiness, culture is also a critical part of the organization that can't be neglected by leaders, if the organization is going to be successful in the long term. As you better understand what culture is, and some of the key factors that shape it, you'll be able to be more intentional in how you strive to build and maintain a healthy culture in your organization.
