Guiding Corporate Culture using “I Opt” Technology - Culture and control_Final.pdf · framework...

Journal of Organizational EngineeringA Journal of the Organizational Engineering InstituteVolume 7 / Number 1May, 2007

Abstract

Corporate culture is the invisible compan-ion of management. Together they serve toprovide the framework for human coordi-nation. Maximum efficiency and effective-ness can only be realized when these twoelements work together to further the com-mon interest.

There is no natural mechanism by whichculture and management are automaticallyaligned. Left to their own devices they canbe supportive, benign or antagonistic withequal ease. This article shows how manage-ment can actively influence culture in a pre-dictable direction and to a known degree. Itoutlines how the three variables of (1) struc-ture, (2) frequency and (3) bandwidth canbe deployed to systematically engineer cor-porate culture in any direction desired.

Guiding Corporate Cultureusing “I Opt”® Technology

Gary J. Salton, Ph.D.

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Guiding Corporate

Culture using “I Opt”

Technology

Gary J. Salton, Ph.D.

The Cultural Framework

This article is the third in a trilogythat outlines how “I Opt” can be used toanalyze and guide corporate culture.The first of these articles appeared in theJune 2006 issue of JOE (Salton, 2006a)and is available on-line at www.oeinstitute.org. That article outlines a tool thatvisualizes a firm as kind of a creaturewith a defined nervous system (Graphic1). The article shows that this type ofstructure will always characterize anyorganization with a unitary chain ofcommand.

The “I Opt” Map article goes on toshow that any organization will alwayshave a defined network whose character-istics can be analyzed and whose behav-ior is predictable. This can be done onany level from individual to group to anentire firm. It shows how the effects ofexternal “sensors” (e.g., consultants) aresystematically incorporated into the net-work while remaining distinct from it.Finally, it shows how the effects of infor-mation traveling over the network canguide the “movement” of its appen-dages (i.e., the tentacles in Graphic 1) inpredictable manner.

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GRAPHIC 1

"I OPT" MAP REPRESENTATION OF A CORPORATION

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The “I Opt” Map is the frameworkwithin which corporate culture is createdand sustained. This type of explicit defi-nition is mandatory for any methodolo-gy that seeks to systematically influencecorporate culture. Without it confusionwill reign on what is included or outsidethe cultural scope. “I Opt” has met thechallenge by defining exactly what isbeing addressed.

Creation of Values and Beliefs The second article in the trilogy was

published in the November 2006 issueof JOE (Salton, 2006b) and is also avail-able on-line at www.oeinstitute.org.This article shows how values and beliefsas well as behaviors systematically arisefrom information processing elections.

The article explains how the behav-iors that can be accurately predicted by“I Opt” will automatically give rise tobeliefs. Beliefs are feelings of certaintythat something exists or is true. It fol-lows that behaviors consistently appliedin the conduct of life will come to solid-ify a belief that the principles embodiedin those behaviors are “true.” They areworking every day in the person’s life.

For example, a person can come tobelieve that “creativity” is a good in andof itself if that person uses creativityevery day to resolve life’s issues.

Similarly, the article shows that val-ues are created by the same process.Values are the relative worth or impor-tance that people assign to things.Values can attach to any “thing,” includ-ing beliefs and behaviors. For example,those beliefs that underlie behaviors thatare used more frequently will probablybe deemed to have greater value.

The article continues by showinghow values and beliefs can combine tocreate entire philosophic systems. Thishappens because the strategic styles andpatterns that underlie beliefs and valueshave an inherent commonality drivenby the method and mode that definesstyles and patterns. For example, thearticle shows how the philosophy of“individualism” can be created by astrong adherence to a “Changer” strate-gic pattern.

The article concludes by noting thatprocesses lying outside of “I Opt” tech-nology can create global values andbeliefs. History, teaching, indoctrination


and upbringing are only a few of theitems that might influence a particularvalue or belief. “I Opt” is a lot but is noteverything.

The “I Opt” Map provides a solidframework for addressing corporate cul-ture. The specification of how valuesand beliefs are created provides an equal-ly firm foundation to address the con-tent of the corporate culture existingwithin the framework.

This is the third article of the trilogy.It uses the concepts of the “I Opt” Mapand the insights on the creation of val-ues and beliefs. It will show how corpo-rate culture can be created or adjusted inany desired direction with a probabilis-tic certainty of final outcome.

Culture Defined Influencing corporate culture requires

that control mechanisms be defined. Toaccomplish this the thing that is beingcontrolled (i.e., corporate culture) mustfirst be operationally defined in a precisemanner. The definition that best meetsthis operational requirement is culture as“shared beliefs, values and behaviors thatare not determined by biology” (Ameri-can Heritage Dictionary, 2000) Thisexpansive description appears to fit withthe wide variety of dictionary definitionsavailable and breaks down into elements

that can be systematically addressed (seeTable 1).

Culture is a control mechanism. The“shared” element of the definition impliesthat there is some kind of commonalityof expectation or standards (e.g., norms).These norms exert an influence even onthose members of the group who do notfully subscribe to them. However, this isnot the only control mechanism.Management is probably the moreimmediate and powerful of the influenceson behavior in a corporation.

Management-Culture Interaction Management and culture are both

present in any firm. The difference liesin conscious intent. Culture involvesself-generated commonality created bythe constituent parts of the firm (i.e., itspeople). A reasonable analogy for cul-ture might be the autonomic or invol-untarily nervous system in an animal.Like that autonomic system, culture isthere all of the time whether you thinkabout it or not. It is also working everyminute of every day, whether you wantit to or not. It arises from the very exis-tence of the firm and needs no permis-sion or effort to sustain itself. Likebreathing, it is easy to forget that it isthere and functioning.

A reasonable analogy for manage-

Culture: Shared beliefs, values and behaviors that are not determined by biology.

Beliefs: The feeling of certainty that something exists or is true (Cambridge, 2002).

Values: The importance or worth of something (Cambridge, 2002); e.g., the rank order of beliefs.

Behaviors: The action or reaction of something (Wordnet, 2003).

TABLE 1

CULTURAL DEFINITION

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ment is that of the central (rather thanautonomic) nervous system. Manage-ment is the system of actions, conven-tions and practices that are consciouslyimposed on a firm. The intent is toguide short-term behavior toward sometype of defined objective. It is moni-tored and enforced by authority. Losethe focus on the objective and thedirected behavior evaporates. Lowermonitoring or relax enforcement anddirected behavior begins to wander.Unlike culture, management is not“automatic.” It requires on-going atten-tion if it is to function.

Management and culture worktogether to govern the behavior of the“creature” defined by the “I Opt” Map.The range of behaviors possible within afirm are infinite. Management can onlyfocus on the core behaviors relevant tothe firm. This leaves a lot of room forother behaviors—functional, dysfunc-tional, disruptive and supportive.Management systems cannot controleverything.

For example, management systemstypically do not explicitly define howconflict is to be handled, speed ofresponse or telephone etiquette. Yet anyof these can be important to the func-tioning of a business. There are alsothings that are impossible to fully speci-fy such as grooming standards, appro-priate levels of familiarity and socialmanners. These undefined, but poten-tially important behaviors are the realmof culture.

There are even more abstract behav-iors that fall within the scope of culture.Things like creativity, enthusiasm andvision are often cited examples. Itemssuch as these can be frustrated by man-agement but cannot be mandated by it.

Rather, it is culture that creates the environments where these meta-behaviors can flourish.

Basically, culture controls those ele-ments of behavior that are not specifiedby the management system. In otherwords, culture handles the leftovers.This means that management and cul-ture are substitute goods. They can be“traded-off.” Management can reducethe realm of culture at any time simplyby imposing articulated standards ofbehavior and then watching to makesure that they are followed.

Table 2 defines some of the majorcharacteristics of both management andculture. Each can take over aspects of theother. However, any organization willalways have both and they will interact toproduce the “personality” of a firm.

The 1994 turnaround of Chryslerillustrates the interaction of manage-ment and culture. Bob Lutz, the thenPresident of Chrysler took the initiativeand introduced new management, com-munication channels and product devel-opment methods. The result was a dra-matic improvement in quality, cost sav-ings and improved profits. With theDaimler-Benz acquisition “Chryslerreverted to ‘old-style’ behavior.” (Zatz,1994). That “old style behavior” was theculture. It had merely been temporarilymoved aside by a management overlay.Beliefs and values had not changed.Behavioral preferences had been sup-pressed but not displaced. Once themanagement system constraints wereremoved the underlying culture simplyreasserted itself.

Management is easy to see. It is theimposed and visible element guiding thebehavior of the firm. It rightfully getscredit or blame for the performance of

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MANAGEMENT CULTURE

TARGET Behaviors Beliefs, Values, Behaviors

SETUP Install and Maintain Install and forget

DURATION Changeable Permanent

SCOPE Targeted Areas All Pervasive

HORIZON Short-term Long-term

COST Continuing Up-front

Source: Salton: Organizational Engineering Seminar, Ann Arbor, MI. April 2006.

TABLE 2

CULTURAL AND MANAGEMENT CONTRASTED

the firm. Culture works in the back-ground making management easier orharder. It is invisible since it resides inthe ordinary interactions of people.There are, however, situations where itspower can be felt.

Cultural effects are most easily seenin corporate mergers. For example, onpaper the merger of Matsushita(Panasonic, Pioneer, JVC, etc.) andMCA (Universal Studios, MCA records,Cineplex Odeon theaters, etc.) madesense. The Japanese firm had a lot ofmoney and MCA needed it. The marketfor Matsushita products was slowingand it needed to redeploy its assets. Thenumbers made sense. Financial logicblinded the players to the elephant inthe room.

The elephant’s name was corporateculture. Matsushita was staid, deliberateand cautious. Its management systemreflected that posture (Mcgarvey, 1997).Decisions were reviewed and re-reviewed. Detail was copious. Reportingwas rigorous. In effect, the management

system reflected its culture (i.e., beliefs,values, and behaviors). MCA, by con-trast, was adventurous. Decisions werefast. Risk was accepted as a cost of cre-ativity. Informality ruled and individualinitiative was prized. Its managementsystem had grown organically with itsculture and had adopted a somewhatrelaxed standard. Both cultures werewell suited to the management systemthat they supported. They both servedtheir respective firms well and neithercan be seen as “right” or “wrong.”

All parties recognized the manageri-al differences and believed that theycould be reconciled. They are explicit,easy to see and capable of being adjust-ed to mesh. Cultural differences areanother matter. They were invisible andnot explicitly addressed. These culturaldifferences predestined the merger tofailure.

In retrospect, the reasons seem obvi-ous. Detail takes time to gather and pre-pare. Imposing it as a requirement fore-closed MCA’s fast decision capability.

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Decision reviews limited individual ini-tiative. Rigorous reporting focusedattention on seemingly irrelevant mat-ters. Formality compromised the scopeof issues that might be addressed. Theresult was that the staffs of both MCAand Matsushita resisted each other in athousand different and subtle ways.Frustration was inevitable. The breakupwas probably a relief to all involved. Youhave to be careful when there is an ele-phant in the room.

The point of this section is that man-agement and culture are separate butinterrelated things. They can beaddressed independently. However, inpractice they always appear together.They can complement or conflict witheach other. This article considers onlythe cultural element but recognizes thata successful cultural initiative will alwaysencompass both control systems.

How “I Opt” Fits“I Opt” strategic styles have been

shown to be a reliable predictor ofbehavior (Soltysik, 2000), a major com-ponent of the cultural equation. “I Opt”is also based on human information pro-cessing. This means that it is notdependent on the individual bio-chemi-cal factors inherent in psychology (e.g.,“feelings”). This makes it well suited foruse with group phenomena such as cul-ture.

Culture is not confined to behaviors.It also involves values and beliefs. Theearlier article in this series (Salton,2006b) has shown that many of theseare a natural outcome of “I Opt” styleelections. This means that “I Opt” tech-nology embraces all of the componentsof culture.

“I Opt” also features ratio (i.e., exact)

measurement. This means that mathe-matics can be used to assess individualsand groups. It is the interplay of individ-ual strategic profiles that create the stan-dards that become culture. Accuratelymeasuring group behavior, not just indi-vidual conduct, is an essential conditionfor any effective cultural initiative. “IOpt” ratio measurement makes this pos-sible.

The “I Opt” Map (Salton, 2006a) isanother essential ingredient. It definesthe boundaries of the “thing” that has aculture. It also describes the transactionchannels through which the culturallyrelevant information flows. It outlineswho is likely to influence who and byhow much. With this, the effects ofpotential cultural initiatives can betraced and assessed.

In summary, “I Opt” is a natural fitfor addressing culture. It directlyaddresses behavior, a principal compo-nent of culture. Beliefs and values flowfrom the information processing pat-terns (Salton, 2006b) thus locking in thethree of the four components of culture(see Table 1). Exact measurement allowsdegrees of commitment to be estimatedon both individual and group levels.This measurement also allows the finalcomponent of culture, the “shared”aspect, to be addressed. “I Opt” technol-ogy thus has the capacity to cover all ofthe cultural bases in a comprehensive,exact and elegant manner.

Shared Values, Beliefs, and Behaviors

Culture is a system that resides in thespecific combination of people partici-pating in the system. The second articlein this trilogy (Salton, 2006b) showedhow values, beliefs and behaviors auto-

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matically arise from the informationprocessing elections of an individual.

Basically, the article pointed out thatpeople tend to believe in “things” thatwork for them in their personal lives.They assign value to these “things” inaccordance with the relative importancethat those things contribute to the suc-cessful conduct of their lives. For exam-ple, if you conduct a life governed bydisciplined action you are likely to placehigh value on qualities like certainty ofoutcome and methodical execution. If,on the other hand, your life is governedby unpatterned thought you are likely toplace the most value in creativity andflexibility. Different lives give rise to dif-ferent values and beliefs.

The different values, beliefs andbehaviors used in individual lives canconflict when the people carrying themare brought together in pursuit of acommon purpose. For example,methodical execution precludes flexibil-ity. This will not be an issue where a par-ticular activity clearly calls for a particu-lar approach. However, most things donot come with labels. They can be suc-cessfully addressed in multiple ways.This is where preferences come in toplay. The exercise of these different pref-erences is an inherent source of conflictin most organized activities. It cannot beavoided, only controlled.

Since culture is by definition“shared” values, beliefs and behaviorsthe next step is to use “I Opt” to showhow the very different approaches ofindividuals can combine into a systemthat can typify an entire organization.To do this we must start with an indi-vidual “I Opt” profile of a real person asshown in Graphic 2.

While the Reactive Stimulator style

and the Performer pattern are moststrongly represented in Graphic 2, allother styles patterns are also represented.This is to be expected since all have valuein navigating life. Different life patternswill generate different proportions.Individual beliefs, values and behaviorswill typically follow the commitment tothe style (short-term) and pattern (long-term) preference associated with it (seethe Cultural Snowflakes on www.iopt.com for sample characteristics associatedwith styles and patterns).

Everyone in a group also has a profilethat represents how they prefer to con-duct life. Their profiles can be overlaidto create a representation of the group asa whole. This is shown in Graphic 3which is the actual group to which theindividual in Graphic 2 belongs.

The gray area in the center is the areawhere a majority of the group (in thiscase, at least 8 of 14 group members)have a position. This is the area wherethe “sharing” is the highest since it is thearea that most of the people will findacceptable. Thus the majority area bestdescribes the probable “culture” of agroup. In this case, the Conservator pat-tern is likely to govern group culture If adecision (behavior) or cultural variable(belief or value) were to land in this area,at least a majority (8 out of 14) wouldfind it acceptable if not ideal.

The individual graphic (Graphic 2)has been highlighted in with a bold lineon Graphic 3. It can be readily seen thatthis person’s profile will not be perfectlyaligned with that of the group. To onedegree or another, all of the other groupmembers are in a similar position. Thereis no such thing as a “perfect” fitbetween individual and group culture.Culture is always an accommodation.

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GRAPHIC 2

INDIVIDUAL “I OPT” PROFILE

GRAPHIC 3

GROUP “I OPT” PROFILE

Conservator 43%

Changer 16%

Perfector 22%

Performer 19%


The point of this section is that thecultural direction of a group can bemeasured. Likely behavioral choices canbe predicted. Competency values (“howto do something”—see Salton, 2006b)arising from these behaviors can be esti-mated with a degree of certainty. Themoral values (“what should be done”—see Salton, 2006b) can be probabilisti-cally assessed. Finally, the beliefs arisingfrom the particular mix of competencyand moral values might reasonably beinferred. “I Opt” technology moves cul-ture from the ranks of speculative guessto the realm of probabilistic certainty.

Group Interaction Individuals interact with each other

to form the culture of a group. Groupsinteract with other groups to form theculture of larger entities. Interconnectedgroups must reach some level of“shared” expectations if their commonmission is to be fully realized. If thisrelationship extends over time, theexpectations (i.e., behaviors and values)will need to be stable if the groups are tofunction efficiently. In other words, astable subculture will be needed.

Graphic 4 shows the structure of firstand second level management of anactual organization. Group VP “A” ishighlighted as participating in two dis-tinct groups. This dual membershipprovides assurance of a degree of conti-nuity. Group VP “A” is positioned torepresent the interests of each group tothe other—including cultural interests.

This structure was first articulated byLikert (1967, Likert) who aptly namedit a Linchpin Structure. Using this lensorganizations can be looked on as a net-work of overlapping Venn Diagrams(1880, Venn—usually represented as

overlapping circles that describe the rela-tionship of sets). This kind of “natural”coordination mechanism (i.e., participa-tion in overlapping groups) is built intothe management structure of mostfirms.

Since “I Opt” offers the ability tomeasure things exactly we can take theconcept of overlapping sets a stepbeyond that available to Likert. We canmeasure the majority area of both of thegroups with whom Group VP “A” par-ticipates and overlap them (see Graphic5).

The relatively high degree of overlapbetween the two groups suggests thatGroup VP “A” will not have much of achallenge reconciling the cultures of thetwo groups. As with individuals fittinginto groups, the fit between groups isnever perfect. However, the greater theoverlap the more likely they are to beable to find accommodation.

The area where the majority profilesof the two groups overlap is referred toas the “common area.” This is the zonewhere both groups can reach commonagreement without sacrificing theirstrategic preferences. The common areafor the two groups in Graphic 5 isexpanded and shown in Graphic 6.Over a long series of transactions onissues involving both groups, the charac-teristics of this common area will cometo typify the culture of the combinedgroups (e.g., a department, division,group, etc.).

The common area in Graphic 6 is amatter of consequence for decisions thatbreach the interests of the groups. Forexample, a policy decision might affectproduction methods overseen by theSecond Level management team. Thatdecision might also affect the control

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methods used by the SeniorManagement team. Both groups have amaterial interest in the outcome.

Participants must consider the inter-ests of both of the groups involved inoffering resolution strategies. In other

words, Group VP “A” must consider theinterests of the Senior Managementgroup as well as the Second Level group.In arriving at a decision group memberspropose, recast, modify, adjust andreshape each other’s suggestions. Sooner

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GRAPHIC 4

“I OPT” MAP OF ACTUAL MANAGEMENT GROUPS

SENIOR

MANAGEMENT

(3 People)

2ND LEVEL

MANAGEMENT

(5 People)

VP

Function 1

VP

Function 2

VP

Function 3

VP

Function 4

President

Group VP “B”

Group VP “A”

GRAPHIC 5

MAJORITY PROFILE OVERLAP

MANAGEMENT GROUPS

SENIOR MANAGEMENT

(3 People)

2ND LEVEL MANAGEMENT

(5 People)


or later, someone will come up withsomething that lands in the area accept-able to a majority of group members.This is the common area of Graphic 6.It is the area where most (but not all)decisions are likely to fall.

The common area is stable. It is thereweek after week, month after month,decision after decision. Individual deci-sions can fall anywhere. However, over along series these decisions will tend tofall in proportion to the percentages list-ed. The reason is simple. The percentagedescribes an area in which a decision hasthe opportunity to fall. The bigger thearea, the more likely it is that the ran-domly proposed solutions will fall intoit. No magic. Just common sense.

In the case of Graphic 6 the values,beliefs and behaviors associated with the

“Perfector” Pattern will come to typifythe combined stance of both groups.Behaviors involving study, assessmentand planning would be seen as the mostlikely norm. Competency values of thor-oughness, caution and clarity will cometo be seen as guiding this behavior.Beliefs such as understanding as a uni-versal good are likely to find someground in which to take root.

It is worth noting that neither of thetwo groups involved favors the“Perfector” pattern. The Senior Groupfavors “Changer” (i.e., upper left quad-rant) and the Second Level Group favors“Conservator” (i.e., lower right quad-rant). In Sociology this is referred to asan emergent. The result of interaction isdistinct from the properties exhibited bythe contributors. In practical terms, this

Changer

28%

Performer

26%

Conservator

13%

Perfector

33%

GRAPHIC 6

COMMON AREA

MANAGEMENT GROUP OVERLAPS

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explains the often cited but rarelyexplained unpredictable nature of orga-nizational combinations. You now knowat least one of the reasons. You alsoknow that it need not be unpredictable.

A firm can be seen as a chain ofgroup to group overlaps. Each relation-ship will bend the culture in one way oranother. The composite of these over-laps is what comes to characterize theculture of the firm as a whole. Guidingthe culture of a firm involves the con-scious modification of interactions.These modifications adjust the characterof the profiles of the groups that com-prise the firm. Group profiles linktogether into chains that produce pre-dictable cultural results (within the lim-its allowed by the management system).A key to the management of this processare the people in the firm who holdleadership positions.

Cultural Sledgehammer Since corporate culture is founded on

people, anything that affects the peoplewho together make a firm will affect cul-ture. You do not need a theory to initi-ate a pervasive cultural change. Themost visible of these initiatives comefrom the office of the CEO. If successfulit is a legacy that will live beyond theCEO’s tenure. It is a tempting targetand one that is regularly attempted.Examples of these initiatives are not dif-ficult to find.

Jack Welch, GE’s legendary CEO,began the process of changing GE byaxing over 100,000 employees and earn-ing the nickname “Neutron Jack.” Hethen flipped into positive mode byinstalling one of the first Six Sigma qual-ity programs (limiting defects to 3.4 permillion operations) and adding about

100 firms per year to the GE family. Thecombination of changing the manage-ment practice (e.g., Six Sigma and otherthings) and changing the mix of peopleproduced a different GE. For 86 years ithad been the top firm in patents issued.By the time Welch retired GE was noteven in the top 20. But, during Welch’stenure GE outperformed 93% of theFortune 500 in total return on invest-ment (Brock, 2002). A firm that hadbeen renown for innovation had becomeone noted for operations. Culture hadchanged.

Not everyone has been as successful.Albert “Chainsaw” Dunlap of Sunbeaminfamy had a strategy of cutting staffand using intimidation to demandresults. The bet was that the people whoremained would figure something out.They didn’t. The firm went into bank-ruptcy in 2001. Still other CEOs triedto build a culture from scratch. Enrondid this by stacking the firm with“smart, sassy, creative, and risk-taking”people (Business Week, 2002). They gotthe culture they wanted but neglectedthe management systems necessary tocontrol it. Culture is not everything.The result was catastrophic.

The CEO level “sledgehammer”method works—sometimes. You mustbelieve that the management team thatguides the cultural initiative has somequality or insight that allows them to“sense” the right thing to do. History ofsuccess is no measure. In his best sellingbook “Mean Business” (1996, Dunap)Dunlap listed success stories involvingbusinesses in 17 states and three conti-nents. It did not help him withSunbeam. There will always be peoplelike Al Dunlap who point to the past asevidence of the merit of their methods.

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The only issue is whether it will worknext time? Make your bet.

Cultural Drivers The “sledgehammer” examples illus-

trate that, to one degree or another anycultural initiative will “work.”Unfortunately, without the guidance ofa firm theory (i.e., what causes what andwhy) its direction and degree is a matterof chance. “I Opt” technology providesa theory that converts this “chance” intoa probability.

There are controllable variables thatare always relevant and have predictablecultural effects. These variables can bemapped and their probable impact tracedthroughout the interconnected systemthat is a typical firm. They are ideal toolsfor consciously influencing corporate cul-ture and are outlined in Table 3.

Structure is the most important ofthe variables and defines the flow ofinformation in a firm. Informationflows are a prime carrier of corporateculture. Structure refers to how peopleare connected to each other within acorporate framework. In terms of thenervous system analogy, these connec-tions are the synapses of the system.They determine which signals will bepassed on as well as their character andtheir intensity. They always matter.

The result of the human interactionat these connection points are pre-dictable using “I Opt” technology.Formal academic research (Soltysik,2000) as well as tens of thousands ofactual applications have demonstratedthat “I Opt” technology is accurate andreliable in predicting outcomes. Theconcepts on which “I Opt” is based canbe accessed with ordinary commonsense.

For example, “I Opt” might identifya person highly committed to a struc-tured approach (e.g., detailed input).This person might be connected withanother who is committed to an unpat-terned method (opportunistic input).With this knowledge, the likely per-formance of the pair is entirely pre-dictable.

If the person using structure is placedin the senior position, it is likely thattransmission will be delayed as moredetail is sought. If the unpatternedmethod is in charge, transmission islikely to be fast but incomplete. This isnot all that will happen but it is enoughto give a sense of why “I Opt” works.The character, quality and quantity ofinformation govern behaviors peopleuse to navigate life. Structure is theorganization of relationships that pre-scribe these probable interactions that

STRUCTURE: The chain of command relationships—who reports to who.

FREQUENCY: The numbers of times people meet to discuss matters relating

to the functions of the firm

BANDWIDTH: The number of different subjects that are discussed.

TABLE 3

CORPORATE CULTURE DRIVERS

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together comprise the life to be navigat-ed. No mystery. Just common sense.

Frequency is the second most impor-tant variable. It is a measure of howoften people within a defined structuremeet to discuss matters of corporate rel-evance. The more often they meet, themore likely it is that the profile of theoriginator of the information will haveits intended effect. The reason is simple.The greater the frequency, the greaterthe opportunity to bend a decision intheir favor. This is not rocket science.

Bandwidth is the last variable. It isthe number of subjects on which personis referenced. The more subjects that aperson addresses in his/her interactions,the greater will be the influence of theirprofile on the firm as a whole. Again,the reason is simple. The more subjects,the more paths there are available for aparticular profile to exert influence.

These three variables are the basicsneeded to guide corporate culture.Additional variables can be added andthe ones cited can be refined. This kindof adjustment may be appropriate inparticular situations. However structure,frequency and bandwidth are sufficientto carry the day in most situations.

As far as the author is aware, thispaper is the first time that these variableshave been articulated together as com-ponents of the cultural equation.However, none of them are new.Anyone who has held a senior executiveposition intuitively knows of them andtheir power. They have used them inincluding and excluding people fromdecisions. They adjusted direction byincreasing or decreasing the frequency ofmeetings. They have broadened or nar-rowed the influence of people by invit-ing or excluding them from particular

kinds of decisions. The concepts are asold as management. The difference isthat these decisions have for the mostpart been local. “I Opt” technology sys-tematically extends their reach. It doesthis in a way that can be used to set aparticular direction and assure reason-able probabilities of success.

Substitution Strategy The people in the chain of command

typically have the authority to deter-mine frequency and bandwidth in ordi-nary conduct of their corporate affairs.The “who reports to who” componentthus controls the two other tools of cul-tural control. It is the single most pow-erful influence on corporate culture.

“I Opt” technology offers two basicmethods of systematically using struc-ture as a cultural adjustment tool. Themost direct of these is illustrated inGraphic 7.

The Substitution Strategy is a sophis-ticated version of the “sledgehammer.”People whose profile bias them against aparticular cultural direction are replacedwith people whose profile favors it. Thisdoes not necessarily mean that thereplaced people are fired. They may justbe transferred. It does mean that theyare moved out of chain of influence inthe targeted area. The result of the sub-stitution is shown in Graphic 8.

Under the initial structure the groupwas biased toward a “Conservator” pat-tern. Careful, methodical, cautious andaccurate planning and implementationcharacterized their behavior. Speed is sac-rificed in favor of certainty. Risk is mini-mized by favoring proven methods. Acivil and measured demeanor is likely tocharacterize the group as a whole.

Substituting people (see the X marks

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on Graphic 7 to see the profiles eliminat-ed) changes the common area. The groupshifts toward a “Changer” pattern. Thedegree of the likely change is plainly visi-ble by the gray area in Graphic 8. In thiscase an aggressive “I got an idea! Let’s give

it a try” attitude is likely to prevail.Planning and analysis is replaced withexperimentation. Expedient methodsreplace proven strategies. Both speed andrisk increase. New ideas are encouragedand acted upon. The group demeanor

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GRAPHIC 7

REPLACEMENT STRATEGY OF CULTURE CHANGE

Jeff

Otis

John

Debra

Liz

Steve

Dorian

Steve

OLD STRUCTURE

Darren

John

Liz

Steve

Darren

Tim

Cheryl

Mark

Tom

Jeff

NEW STRUCTURE

NEW

PARTICIPANTS

OLD STRUCTURENEW STRUCTURE

GRAPHIC 8

GROUP EFFECT OF REPLACEMENT STRATEGY

CONSERVATOR

CHANGER


changes from civil, measured discourse toemotion laden, fast paced exchanges.

The advantage of using “I Opt” withthe substitution version of the “sledge-hammer” strategy is knowledge. Youknow exactly what you will be gettingonce the transition is complete. In addi-tion, you know the tradeoffs that will bemade. Nothing comes without a price.You know what you are losing to getwhat you want. In this case, precisionand certainty are being exchanged forspeed and creativity. This kind of deci-sion is an appropriate managementresponsibility.

Virtual Strategy Direct structural adjustment is the

most certain of the cultural modifica-tion tools available. But it is a blunt tool.There are times when its use is notappropriate. In these cases the two othercultural drivers of frequency and band-width can be used to alter informationflows without replacing people.

The Virtual Strategy involves favor-ing the profiles that you want to empha-size using frequency and bandwidth.This is illustrated in Graphic 9. No oneis removed from or added to the existingstructure. The only change is the degreeand kind of participation.

This strategy effectively creates a newsubgroup. Objectively, the common areais unchanged. Practically, it has beenreweighted in favor of the “Changer”strategy. More new ideas will be generat-ed and more experimentation will occursince the existing “Changers” will beoperating with less constraint. However,the effect will not be as pronounced asin the Substitution Strategy. The othersin the chain are still there. Even if lessinvolved, they will still have an effect.

They can be expected to influence cul-tural direction thorough decisions onallied subjects. Direction may be alteredas decisions move toward implementa-tion. The emphasis will change toward“Changer” preferences but at a moremeasured and perhaps in a more tortur-ous manner.

Another consideration involved inthe use of the Virtual Strategy is meas-urement. Using the SubstitutionStrategy the likely impact of the changecan be estimated. The Virtual Strategyprovides no such indication. Rather,reliance must be put on monitoring andobservation. Frequent adjustmentsmight reasonably be expected. Overall,the Virtual Strategy is more labor inten-sive than its Substitution counterpart.The Virtual Strategy can change corpo-rate culture. It will just take longer andbe less certain in outcome than itsSubstitution Strategy alternative.

Combination Strategy The Substitution and Virtual

Strategies are separated in this paper forpurposes of clarity. However, there is noreason that they cannot be used togeth-er. People can be substituted and at thesame time the distribution of responsi-bilities can be changed. This will be themost likely choice in most situations.

The reason for favoring a combina-tion strategy is that the different nodeson the management chain serve differ-ent functions. Some of those functionsare best served by people whose profilesdo not conform to the desired culturaldirection. For example, an R&D groupprobably needs financial control. Thismay be best served by a person who ishighly committed to detail, using trust-ed methods and who favors certainty of

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outcome. This is not the formula forsuccessful R&D. It can be the formulafor financial integrity.

The Virtual Strategy can mitigatecultural discrepancies inherent in theR&D/Finance situation describedabove. It is unlikely to completely recon-cile it. There is no complete solution.There are, however, ways to limit thenatural tension. One key is knowledge.Simply explaining how different “I Opt”profiles generate different sets of behav-iors, values and beliefs is often enoughto take the “edge” off of a situation. Thenatural tension will remain. But theemotional element can be replaced withrational understanding.

Managing Global Values Values, beliefs and behaviors generat-

ed by “I Opt” profiles are not every-

thing. Cultural qualities can arise from avariety of sources. History, religion, andgender are among the host of factorsthat can generate aspects of a corporateculture. History can include corporateas well as personal experience. For exam-ple, in the early years of the Dotcomindustry it was common practice to findengineers sleeping under desks. Workingall night was seen as “dedication.” Thisvalue was born out of the needs of astartup company. It continued wellbeyond the need and remnants persist infirms have become worldwide giants.

Since a “value” is a measure of worth,it can attach to anything. Some examplesof generally recognized positive globalvalues are provided in Table 6.

Negative global values can alsoentrench themselves in a firm.Candidates such as dishonesty, greed,

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GRAPHIC 9

VIRTUAL STRATEGY OF CULTURE CHANGE

STRUCTURE

Increase frequency of

decision interaction

Increase: expand the

bandwidth of decisions

Old Emphasis

New EmphasisJeff

Otis

John

Liz

Steve

Dorian

Steve

Darren

Debra


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despair, intolerance and distrust readilycome to mind. All that is required forthese to infiltrate a firm is for enoughpeople to hold them and express themin behavior that others can see andshare. The ability for dysfunctional val-ues to gain supremacy has been amplydemonstrated by the Enron experience.Global values are matters worthy ofmanagement attention.

The easiest way to influence theglobal values of a firm is to monitor theintake of new employees. Culture is amatter of mass. Everyone entering thefirm need not conform. People carryingsome negative global values can some-times be valuable. It is only necessarythat a firm build in a bias toward peoplewho share the global values that man-agement wants cultivated. The bias willcause the culture to tilt. That tilt willthen act to restrain people who are valu-able in certain dimensions but whocarry some negative aspects. Generally, afirm is not well-served by creating amonoculture of any character—evenones considered to be “good.”

Changing existing global values ismore difficult but can be done.Management practices can change themover long periods. Management can

reward and/or enforce particular behav-iors. These eventually become “history”and evolve into an accepted moral stan-dard (i.e., what “should” be done).Google’s celebrated “Great just isn’tgood enough” dictum might be anexample of a global value being installedby management. This refers to theexpectation that people will “alwaysdeliver more than expected” (Google,2006). If this behavioral practice is rein-forced in objectives, meetings and per-formance reviews it will be anentrenched part of the Google culture.At that point listing it as part of an artic-ulated philosophy may still be desiredbut will be superfluous. It will happenautomatically.

Global values can also be “taught”using more conventional methods.While global values are not driven bystrategic profiles, the profiles can have arole to play in consciously installingthem. Different strategic styles respondto different approaches. For example,the LP wants facts, proof and explicitdirection. The RS is energized by emo-tion and defined targets. The HA wantsreasons and a sense of how things fittogether. The RI is stimulated by novel-ty and new paths. Teaching is just a form

Ambition

Awareness

Brilliance

Charm

Cheerfulness

Civility

Courage

Hygiene

Industry

Intelligence

Kindness

Respect

Skillfulness

Strength

Dignity

Expertise

Friendliness

Family

Heroism

Hospitality

Honesty

TABLE 6

PARTIAL LISTING OF GLOBAL VALUES

(values that are independent of strategic profiles)


of information transfer. Gearing instruc-tion to the way people prefer to processinformation increases the odds that theywill “get it.”

Teaching can sensitize people to aparticular value and motivate them tosubscribe to it. However, it will never beenough to install values as part of afirm’s culture. To be an element of cul-ture requires that global values be dis-played. This is how people come toknow that they are “shared.” This hap-pens automatically with the competencyvalues generated by “I Opt” profiles.Competency values focus on “how”things are done and the “how” can beseen by all. Global values are usuallymore subtle. However, their display canbe engineered and promoted.

Teaching can plant the seed. For theseed to grow it needs nourishment. Thisnourishment requires a process, not anevent. Those attempting to guide a cul-tural adjustment must arrange to havethe desired cultural attribute displayed,preferably by the executives of the firm.Talking about it is good but not enough.Actually displaying the attribute inaction carries much more weight.

Specifying a program to adjust glob-al cultural values is beyond the scope ofthis paper. However, the foregoing isprobably sufficient to indicate how itmight be approached. As with any otherelement of culture, once it has takenhold nothing more need be done. It willbe self-sustaining.

Summary This article began by showing that

culture and management are interdepen-dent systems of control. Management isthe active piece that is guided by corpo-rate strategy and tactics. Culture handles

the leftovers. It is the silent componentthat is always running in the back-ground. It is the unavoidable outcome ofhuman interaction. It is importantbecause it can frustrate or facilitate cor-porate success. It is worthy of manage-ment attention.

Cultures can and are being changed.The most dramatic and crudest ap-proach is the “sledgehammer”—cut staffand hope for the best. Changing man-agement systems can also work if focusis maintained long enough. Teachingcan help but is seldom enough by itselfto create enduring cultural change.Current ways of influencing culture areclumsy and inexact. They all can workbut there is no assurance that any ofthem will.

An earlier article showed how strate-gic profiles can generate competencyvalues. This article carried the ball for-ward by showing how individual profilesof multiple people can combine to cre-ate a common area which is a group pro-file. This agreement area (i.e., the com-mon area where profiles overlap) gener-ates moral values (how things should bedone) that are then imposed upon groupmembers whose profiles contributed toits creation. When this happens, a cul-ture has been formed or modified.

The article goes on to explain howgroup profiles can themselves be com-bined to get common areas involvingmultiple groups. These higher levelcombinations also have a profile of theirown which describes their likely behav-ior and values. A system of nested cul-tures has been created. When chains ofthese subcultures are set into the “I Opt”map (i.e., the “octopus” like creature inGraphic 1) the culture of entire firmsbecome visible.

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The ability to attach numbers to cul-tural drivers (i.e., the areas of overlap)opens the door for prediction with prob-abilistic certainty. The predictions are alsoa basis for continuous validation. As longas predictions come true, confidencegrows in the approach being used. Aseries of predictive failures is a signal thatsomething has been missed. “I Opt” tech-nology provides a self-checking mecha-nism to accompany its cultural guidance.

The article then explains how anestablished culture might be changed.The Replacement Strategy is a con-trolled version of the “sledgehammer”method. Instead of whacking awayblindly, precise selections can be made.All of the information available to the“sledgehammer” advocate (e.g., recom-mendations of other executives, evalua-tions, experience, etc.) is available to thecultural engineer so nothing is lost. Butan important element is added. Thechange in the common area caused bythe substitution of people can be meas-ured. Rational judgment replaces guess-work and hope.

“I Opt” technology provides anotheroption, a Virtual Strategy. Existing peo-ple are left in place. Changing the fre-quency of interactions and the band-width (i.e., scope of items addressed)

changes the organizational dynamics inpredictable ways. The “common area” isadjusted by reweighting participantsrather than replacing them. The effect isless dramatic but the direction anddegree of culture change can still berationally assessed.

Finally, the role of learning and cul-tural programs was touched upon. Theseare seen as vehicles for controlling globalvalues that are not directly generated bystrategic profiles. The effect on actualculture is not as measurable as the struc-tural and virtual strategies. However, thedirection can be set and given sufficientpersistence, they will work.

This article is not a textbook andmuch detail has necessarily been omit-ted. However, it is hoped that the read-er will hear the “ring of truth.” The pos-sibilities of consciously creating the kindof culture that benefits all involvedshould be visible to all. Cultures are big,broad things and there is a place foreveryone. The challenge at an individuallevel is to find the right niche. The chal-lenge at the corporate level is to matchthe management and cultural systems ofthe firm to the market that it serves.Done properly, this then supports theniches in which the individuals canthrive.

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Brock, Wally. (2002). “ Assessing Jack Welch”, Digital Age International, Inc.http://www.mondaymemo.net/010910feature.htm

Business Week online, February 25, (2002). “At Enron, “The Environment WasRipe for Abuse”,

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Dunlap, Al and Andelman, Bob (1996), Mean Business: How I Save BadCompanies and Make Good Companies Great . New York: Times Business Books

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Mcgarvey, Robert (1997). “ Merge Ahead: Before you go full-speed into a merger,read this”, Entrepreneur magazine, October 1997http://www.entrepreneur.com/article/0,4621,227654,00.html

Salton, Gary J. (2006a) “The I Opt Map”, Journal of Organizational Engineering.Vol. 6, No. 1, June 2006.

Salton, Gary J. (2006b) “The “I Opt” Effect on Values and Beliefs”, Journal ofOrganizational Engineering. Vol. 6, No. 2, November 2006.

Salton, Gary J. (2006c) Organizational Engineering Seminar. April 2006,Michigan League, Ann Arbor, MI.

Soltysik, Robert (2000). Validation of Organizational EngineeringInstrumentation and Methodology. Amherst, MA. HRD Press.

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Venn, John (1880). “On the Diagrammatic and Mechanical Representation ofPropositions and Reasonings”. Dublin Philosophical Magazine and Journal ofScience 9 (59): 1–18.

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Author Gary Salton is Chief: Research & Development and CEO of ProfessionalCommunications Inc., the firm that develops and deploys “I Opt” technology. Dr.Salton holds a MBA, an MA in Economics and a Ph.D. in Sociology.

In addition to scholarly interests, Dr. Salton has held managerial and senior execu-tive posts in investment banking, real estate and automotive industries. He hasheld positions as Sr. Vice President, Corporate Controller and Chief PlanningOfficer among others.

Dr. Salton founded Professional Communications Inc. in 1991 and has devotedmuch of his effort since then in creating, developing and deploying technologythat is intended to improve the human condition through the discovery of factorsand processes involved in group behavior.

It is Dr. Salton’s practice to make new discoveries first visible at the seminars heconducts in Ann Arbor, MI. They are documented in books, articles and otherpublications as time becomes available.

Dr. Salton can be reached in his Ann Arbor, MI office at (734) 662-0250 or byemail at [email protected] or [email protected]

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