Key Takeaways
- ✓ Organisational culture is the shared values, beliefs, behaviours and assumptions that shape how an organisation works - what is rewarded, what is acceptable and how decisions are actually made in practice.
- ✓ Handy's four culture types are power culture (centralised, leader-dependent), role culture (rule-driven, hierarchical), task culture (expertise and project-centred) and person culture (individual autonomy-focused, common in professional firms).
- ✓ Deal and Kennedy classified cultures by feedback speed and risk level: tough-guy macho (high risk, fast feedback), work hard/play hard (low risk, fast feedback), bet-the-company (high risk, slow feedback) and process culture (low risk, slow feedback).
- ✓ Organisational culture affects adaptation speed, team collaboration quality, employee motivation and psychological safety - making it a significant driver of sustained performance.
- ✓ Sustained cultural change requires alignment across leadership behaviour, hiring, performance management, recognition systems and organisational stories - culture lives in practice, not in mission statements.
Full Transcript
What is organisational culture?
Alex: Welcome back to the Leadership and Management podcast. I'm Alex, and Sam is here with me today. We're talking about organisational culture, which is one of those topics that seems straightforward until you start examining it. Sam, what exactly is organisational culture, and why is it so hard to change?
Sam: The classic definition comes from Edgar Schein, who described culture as the pattern of basic assumptions that a group has developed to deal with its problems, which it passes on to new members as the correct way to perceive and solve those problems. A simpler version is 'the way things are done around here.' The reason it's hard to change is that culture operates at multiple levels simultaneously. There are the visible artefacts: how people dress, how meetings run. Beneath that, the values that are espoused. And deeper still, the basic assumptions that are so ingrained that no one questions them. Real cultural change requires working at all three levels.
What are Handy's four types of organisational culture?
Alex: Charles Handy gave us one of the most widely used frameworks for thinking about culture types. Can you walk us through them?
Sam: Handy used Greek gods as metaphors, which makes them memorable. Power culture, which he associated with Zeus, is characterised by a strong central figure who radiates authority. Decisions are made quickly but there's little consultation. Start-ups and entrepreneurial businesses often have this character. Role culture, associated with Apollo, is rule-bound and bureaucratic. The civil service and large financial institutions often lean this way. Task culture, associated with Athena, is project-focused and collaborative. Consulting firms and creative agencies typically have task cultures. And person culture, associated with Dionysus, exists when the organisation exists to serve the individuals within it, as in some barrister chambers or medical practices.
Sam: Significantly. A financial services firm operates in a heavily regulated environment where compliance and risk management are existential. Its culture will inevitably have process and control elements. A tech startup competing on innovation speed will have a very different cultural imperative. Digital transformation is interesting here because it's creating cultural change in industries that might otherwise be quite slow to evolve. Organisations adopting agile working methods, for instance, find that the method itself carries cultural values around collaboration, experimentation and transparency, which then compete with existing hierarchical norms.
What is the Deal and Kennedy cultural model?
Alex: Cultural change is notoriously difficult. Are there organisations that have managed it well in the UK context?
Sam: There are examples. The BBC's recent work to improve its culture around inclusion after several high-profile controversies is one ongoing case. BP made significant stated commitments to cultural change around safety following the Deepwater Horizon disaster, though critics debate how deep that change went. The NHS has been working on culture in many trusts, particularly around candour and speaking up, following the Mid Staffordshire inquiry. What all these cases show is that cultural change takes years, not months, requires consistent leadership behaviour, and can be undone very quickly by high-profile incidents that contradict the stated values.
Alex: A thought to close with: think about an organisation you know well. Which of Handy's or Deal and Kennedy's culture types best describes it? And if you were designing the culture from scratch to fit the organisation's purpose, would you design the same one?