Reflection 17 – The Past Runs Your Organisation

Understanding where your workplace culture really comes from

Organisational culture is one of those terms everyone uses, and no one defines quite the same way. At its simplest it is just “the way we do things around here.” That short phrase, often attributed to Deal and Kennedy[i], turns out to carry something important. At its core, the phrase is past tense in its logic. The way we do things around here is a way that came from somewhere. It did not appear spontaneously. It is the accumulated result of choices, habits, and responses that worked well enough, often enough, to become the default.

Edgar Schein[ii] described it as the shared assumptions an organisation develops as it solves its problems over time. Hofstede referred to it as the programming of the mind. Once something works, it stops being a conscious choice and starts being background. People stop asking why it is done this way. It just is. That is the moment a practice becomes culture — when the reasoning behind it has been forgotten but the behaviour persists. There are, however, two provisos:

• Culture is never right or wrong; it is at best appropriate or inappropriate for the current situation, and
• Culture always works for the benefit of the total group. If only a select few, or sub-group, benefits from what is done, it is not culture. That might be traditions which are independent of culture.

Culture drives behaviour meaning it is seen through employee behaviour. It is not primarily a product of your current strategy, your current leadership, your current values statement, or your traditions. It is the product of decisions made years or decades ago — many of them by people who have long since left. Consider an organisation that still evaluates every major decision in terms of a process designed during a period of risk, even though the risk passed years ago. A further example is the team that never voices difficult problems in meetings. This could perhaps be traced back to when a senior leader publicly shamed someone who did. One example often seen is the culture of constant busyness, where being seen to work long hours – after hours – matters more than what gets done. Some of these examples are often traceable to a single leader’s personal style, sustained long after that leader’s departure. Leaders are the custodians of culture, but leaders are also strong influencers of culture. Consider the systems concept of second order cybernetics. The observer influences what is being observed.

The culture being managed today is largely inherited, not chosen. That is not a comfortable thought for managers who believe culture can be shifted with the right communication campaign, but it is a more useful starting point than the alternative.

The butterfly effect, and why it can mislead

The chaos theory idea of the butterfly effect, a small disturbance in one place causing a large effect somewhere else entirely, is a useful way to think about how culture forms. A seemingly minor decision at an early or formative moment can ripple forward through time and shape behaviour for decades. This is seen in aspects such as world of economics linked to changes in the early 1980s, and on a different level, world conflicts linked to proliferation of nuclear armament post WWII.

A founder that responds to a crisis by cutting deeply and quietly may embed a culture of caution and self-protection. This behaviour could outlast any memory of the original event. A leadership team that values open debate sets norms that can persist long after every member of that team has moved on. Each new member is taught the correct way of functioning in a specific culture. Hofstede[iii] refers to this as the programming of the mind; Schein refers to it as the way people are taught.

The butterfly effect metaphor is useful up to a point. In its original context, the butterfly’s wings was a lesson about unpredictability. In a complex system, you cannot reliably trace cause and effect backwards with confidence. An account that connects specific past decisions to specific current cultural features in a clean, straight line is almost certainly oversimplifying. Nassim Taleb[iv] calls this the narrative fallacy: the human tendency to find tidy explanatory stories in messy and complex systems after the fact. We are very good at constructing plausible explanations of how we got here. We are much less reliable at distinguishing the real causes from the coincidental ones.

The honest position is that you can identify probable influences on your organisation’s culture without being certain about any of them. Recognising that uncertainty does not weaken the analysis, it makes it more honest, and therefore more useful. Organisation culture is such a multi-dimensional concept and system. Attempting to identify the origins is almost impossible. At best culture can be assessed in its present form and strategies developed for maintaining, adapting or change.

Three Historical Turning Points — and Their Limits

At the level of the broader business environment, three specific developments are among the probable influences on the workplace culture of large organisations today.

The first was an essay by economist Milton Friedman[v] arguing that the only legitimate purpose of a business is to generate returns for its shareholders. When published, this was a minority view which was at odds with the dominant view. The dominant view was that large corporations had obligations to multiple stakeholders, which included employees and communities. Over the following two decades, Friedman’s position became the default assumption in business schools, boardrooms, and financial journalism. By the time most current senior managers were entering the workforce, it was simply taken as given and not a position that needed to be argued. It was just a fact about how business works. This is what cultural change looks like when it has fully succeeded, the argument disappears because it no longer needs to be made.

A second influence was the 1981 firing of over 11,000 striking US air traffic controllers by the Reagan administration. The cultural significance lay not in the immediate dispute but in the signal, sent to employers across the private sector. The unspoken signal was that organised labour was no longer a serious counterweight to management. US private-sector union membership fell from roughly a quarter of the workforce in 1980 to around six per cent today[vi]. At roughly the same time this was also happening to miners under Thatcherism in the UK[vii]. As workers lost a collective voice in shaping their employment terms, defining workplace culture became almost entirely a management function — something done to employees rather than with them.

The third was the academic work on executive compensation in the late 1970s and 1980s, which argued that tying CEO pay to share price would align management interests with shareholders. The practical result was a dramatic increase in executive pay, a management culture increasingly focused on short-term results, and the normalisation of mass redundancies as a financial tool — even at profitable companies.

These are only three events drawn from a very large field of possibilities and choosing them requires some intellectual honesty. The cultural changes they represent include shorter time horizons, weaker employment security, and more transactional work relationships. What started in one part of the world has also spread to countries that did not experience these specific events. Germany, Japan, Sweden, and South Korea have all seen similar trends despite different industrial relations histories. Global forces such as technology, the movement of capital, and the entry of new economies into world trade are clearly influencing and being influenced. Any account that traces everything to a handful of choices in one country overstates the case. The three events above identify real and important influences while not telling the whole story.

The Culture That Resulted

The cumulative effect of these forces has produced a corporate culture quite different from that of a generation ago. Employment security is lower and effectively experienced as missing. Performance management is more intensive, more individually targeted, and more explicitly tied to numerical outcomes. The implicit contract between employer and employee, of security and advancement in exchange for loyalty and sustained effort, has dissolved in many organisations. Workers, particularly younger ones, increasingly approach their careers as independent agents, building portable skills and professional networks rather than investing in a single employer.

It is worth resisting the temptation to call this simply a loss. The workplace model of the 1960s and 1970s, which is sometimes treated as a reference point for what organisations have moved away from, had its own serious problems. It was largely available to white men. It required geographic and social conformity. It rested on specific historical moments that were, and always will be, temporary. The relative security it offered frequently came at costs borne by employees who had no realistic alternative, not by employers who made a principled choice.

What This Means for Managers

Two practical conclusions follow from understanding culture as something historically accumulated rather than currently chosen.

The first is that surface-level cultural interventions rarely achieve lasting change. Relaunching the values, running culture workshops, publishing a new purpose statement is not sustainable change. These actions operate at the level of the visible. Culture operates below that. It lives in who gets promoted, what behaviour is quietly tolerated in high performers, which topics never quite get raised in leadership meetings, and how the organisation responds when something goes wrong. These patterns were not formed quickly and will not shift quickly. A values poster does not reach the level at which culture works.

The second is that meaningful cultural change requires identifying which specific historical decisions might have created the patterns. The next step is identifying which needs to change and then intervening at an equivalent level. If a culture of excessive caution traces back to a badly handled crisis fifteen years ago, no communications programme will fix it. The intervention needs to engage with the structural conditions, incentive systems, governance processes, and informal hierarchies that are keeping the pattern in place. Culture change is behaviour change and behaviour change requires adaptation of underlying beliefs. Changing beliefs is slower and harder than most cultural change programmes promise, but it is the work that changes things.

One further point deserves attention: the link between culture and governance. This is not simply a question of ethics; it is a practical one with different risks on each side. Managers do not need to resolve this debate, but they do need to understand which model their organisation operates under — because the answer shapes what cultural change is even possible.

Notes

[i] Terrence E. Deal and Allan A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982).

[ii] Edgar H. Schein, Organizational Culture and Leadership, 5th ed. (San Francisco: Jossey-Bass, 2017; first published 1985).

[iii] Geert Hofstede, Gert Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. (New York: McGraw-Hill, 2010).

[iv] Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable (New York: Random House, 2007).

[v] Milton Friedman, “The Social Responsibility of Business Is to Increase Its Profits,” New York Times Magazine, September 13, 1970.

[vi] Bruce Western and Jake Rosenfeld, “Unions, Norms, and the Rise in US Wage Inequality,” American Sociological Review 76, no. 4 (2011): 513–37.

[vii] Sarah Pruitt, “When Margaret Thatcher Crushed a British Miners’ Strike,” History, A&E Television Networks, last updated May 28, 2025, https://www.history.com/articles/margaret-thatcher-miners-strike-iron-lady.