Deal and Kennedy's Cultural Model

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Embrace the wonder of the cultures around you.

Corporate culture is one of the key drivers for the success – or failure – of an organization. A good, well-aligned culture can propel it to success. However, the wrong culture will stifle its ability to adapt to a fast-changing world. So, how do you attempt to understand your corporate culture? And what steps can you take to create a strong corporate culture that will best support your organization's activities?

In their classic 1982 book, "Corporate Cultures: The Rites and Rituals of Corporate Life," Terrence Deal and Allan Kennedy proposed one of the first models of organizational culture. When the book was published, it had many supporters, although there were also many who felt the idea of corporate culture would be just a passing fad. Now that we are in the next century, the notion of corporate culture is widely accepted to be as important a business concept as financial control and employee satisfaction.

What Is Deal and Kennedy's Cultural Model?

In their work on the subject of culture, Deal and Kennedy suggested that the basis of corporate culture was an interlocking set of six cultural elements:

1. History – A shared narrative of the past lays the foundation for corporate culture. The traditions of the past keep people anchored to the core values that the organization was built on.
2. Values and Beliefs – Cultural identity is formed around the shared beliefs of what is really important, and the values that determine what the organization stands for.
3. Rituals and Ceremonies – Ceremonies are the things that employees do every day that bring them together. Examples include Friday afternoon get-togethers or simply saying goodbye to everyone before you leave for the day.
4. Stories – Corporate stories typically exemplify company values, and capture dramatically the exploits of employees who personify these values in action. Stories allow employees to learn about what is expected of them and better understand what the business stands for.
5. Heroic Figures – Related to stories are the employees and managers whose status is elevated because they embody organizational values. These heroes serve as role models and their words and actions signal the ideal to aspire to.
6. The Cultural Network – The informal network within an organization is often where the most important information is learned. Informal players include:
   • Storytellers, who interpret what they see happening and create stories that can be passed on to initiate people to the culture.
   • Gossipers, who put their own spin on current events and feed people a steady diet of interesting information. Employees know not to take the information at face value; however, they enjoy the entertainment value of a gossip's story.
   • Whisperers, who have the ear of the powerful people in the organization. They can be used by anyone with a message they want taken to the top but who doesn't want to use formal communication channels.
   • Spies, who provide valuable information to top management, and let them know what really happens on a daily basis.
   • Priests and priestesses, who are the guardians of cultural values. They know the history of the company inside out, and can be relied on to interpret a current situation using the beliefs, values and past practices of the company.

Deal and Kennedy's Culture Types

By examining these cultural elements across a variety of organizations, Deal and Kennedy identified four distinct types of cultures. They also identified two marketplace factors that they felt influenced cultural patterns and practices. They were:

• The degree of risk associated with a company's key activities.
• The speed at which companies learn whether their actions and strategies are successful.

They believed that the risk involved in making a poor decision and the time it takes to find out whether a decision is the right one both have a bearing on how cultural elements develop and influence an organization's employees.

Deal and Kennedy present these factors in a 2 x 2 matrix that identifies the four culture types, as shown in Figure 1 below.

Tough-Guy, Macho – This culture contains a world of individualists who enjoy risk and who get quick feedback on their decisions. This is an all-or-nothing culture where successful employees are the ones who enjoy excitement and work very hard to be stars. The entertainment industry, sports teams and advertising are great examples of this cultural type.

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Teamwork is not highly valued in this culture, and it's a difficult environment for people who blossom slowly. This leads to higher turnover, which impedes efforts to build a cohesive culture. Thus, individualism continues to prevail.

Work Hard/Play Hard – This culture is the world of sales (among others). Employees themselves take few risks; however, the feedback on how well they are performing is almost immediate. Employees in this culture have to maintain high levels of energy and stay upbeat. Heroes in such cultures are high volume salespeople.

Interestingly, this culture recognizes that one person alone cannot make the company. They know it is a team effort and everyone is driven to excel. Contests among employees are common here, as they drive everyone to reach new heights.

Bet-Your-Company – Here, the culture is one in which decisions are high risk but employees may wait years before they know whether their actions actually paid off. Pharmaceutical companies are an obvious example of this culture, as are oil and gas companies, architectural firms and organizations in other large, capital-intensive industries.

Because the need to make the right decision is so great, the cultural elements evolve such that values are long-term focused and there is a collective belief in the need to plan, prepare and perform due diligence at all stages of decision making.

Process – In this culture, feedback is slow, and the risks are low. Large retailers, banks, insurance companies and government organizations are typically in this group. No single transaction has much impact on the organization's success and it takes years to find out whether a decision was good or bad.

Because of the lack of immediate feedback, employees find it very difficult to measure what they do so they focus instead on how they do things. Technical excellence is often valued here and employees will pay attention to getting the process and the details right without necessarily measuring the actual outcome.

How to Use Deal and Kennedy's Cultural Model

The Deal and Kennedy cultural model is descriptive. It argues that no cultural type is better than another, because the types emerge as a result of circumstances. Its value lies in using it to understand how culture evolves and how to manage the various elements that influence it. The following steps will help you to do this:

1. Think of your corporate culture as an asset that needs to be managed.
2. Take a look at the four types of culture and determine, generally, which category your organization fits best.

3. Identify critical risk factors associated with each different type:

   Tough-Guy, Macho

    

   • Is the degree of individualism appropriate within your company?
   • Is organizational cohesiveness hampered by culture, and is this important?
   • Are there ways to build teams without neglecting the importance of individual performance?

    

   Work Hard/Play Hard

    

   • How can you make sure that employees aren't relying on good team performance to mask poor individual performance?
   • Are contests and other forms of recognition rewarding the right kinds of behavior?

    

   Bet-Your-Company

    

   • Can the company react quickly enough to environmental changes?
   • Are the values so long-term focused that short-term gains are neglected?

    

   Process

    

   • How can you make sure that employees don't get so bogged down in paperwork that action is unnecessarily slow?
   • Are there ways to measure how well a job is being performed and reward success?

    

4. Go through each of the cultural elements that Deal and Kennedy identify, as well as ones from other models like Johnson and Scholes' Cultural Web   , and analyze what is happening on a cultural level within your organization. Ask yourself:
   • Are the elements working positively within your organization?
   • Are elements congruent? Are they well-aligned?
   • Does your history cause you to get stuck in out-dated ways of dealing with contemporary issues?
   • Are company values and beliefs embraced by your employees, or simply written as words on a mission statement or plaque?
   • Do your values match your actions, so that you are not compromising them for short-term gains?
   • Do you have ceremonies that honor employees who model the values you want?
   • Are you able to balance the social need for ceremony and rituals with more task-oriented behavior?
   • What stories are passed around, and what heroic figures emerge? Are these stories shared effectively with new employees through orientation or other rituals?
   • Do your heroes solidify and reinforce your cultural values?
   • Who are the key players in your cultural network? Do you have methods for monitoring what they are doing and how? Do they exemplify positive values and beliefs, which are consistent with what your organization stands for? Does their presence help or hinder your strategy and objectives?
5. Revisit your cultural landscape regularly and be aware of what is happening. Make it a habit to ask yourself whether your culture is cohesive and consistent with your organizational goals.