Quantify Culture


Six videos. Thirty minutes. How to quantify culture.

Hard vs. Soft
Everyone likes hard factors more than soft factors. Hard factors can be observed, defined, quantified. Soft factors, in contrast, are difficult to observe, define, quantify. Everyone likes hard. That is quite understandable.

But what about national culture? How Germans define quality. How Americans persuade. How Germans set up their work processes. How Americans business relationships.

Have you ever tried to explain, manage, integrate how Germans define quality, how Americans persuade, how Germans set up their work processes, how Americans business relationships.

That’s hard stuff. It is national culture, who we are, where we come from, how we think and how we work. It is our self-understanding, our self-definition. It is deeply-rooted, almost impossible to change.

Folks, national culture is hard, in the deeper, truer sense sense of the word. National culture is complex, not quantifiable, difficult to describe, difficult to manage, and very difficult to integrate. Culture is not soft. Culture is hard. It is the hardest of the hard factors in global economy

Quantify
Quantify, what does that actually mean, to quantify so-called hard factors? We’re talking about complex interactions, within complex companies. It is really so simple to isolate specific interactions and then to assign numbers to them?

Perhaps you can in discreet time-motion studies, on an assembly line, perhaps with respect to the number of packages a worker can move in a warehouse. But sophisticated organisations, with sophisticated people, doing sophisticated things? These interactions are far too complex to draw a cause and effect relationship.

In complex companies it is all about connections, interdependencies, influences. It is all about identifying, describing and understanding. And not about defining, codifying, forcing into a process. The goal is not to quantify. Instead, the goal is to understand. To get a sense of deeper-lying drivers which influence the success of cross-border collaboration.

Four Questions
Take a piece of printer paper. Un­lined. Fold it in half. Twice. Unfold it. You have quadrants. Turn the paper sideways to the land­scape posi­tion. Now use a pen­cil and an eraser.

1 – Baseline
First, what is your baseline number? In the top-left qua­drant write that num­ber. It could be a hard number: rev­enue, profit, cost. Or perhaps it is an investment: m&a, private equity, joint-venture, corporate reorganization, an important special project.

2 – Factors
Second, what are the key success factors? In the bottom-left quad­rant list max. five fac­tors. These are the things which your or­ga­ni­za­tion must do well in order to meet the baseline numÂber you penciled into the top-left quandrant.

3 – Collaboration
Third, which factors are dependent on collaboration? In the top-right quadrant list those key suc­cess fac­tors which are driven by cross-border collaboration. Then sketch out per factor and on a separate piece of paper: who working with whom, on what, when, why, and most importantly how.

4 – Support
Fourth, how is your company supporting that collaboration? In the bot­tom-right qua­drant write down the actions your orga­ni­za­tion is taking in order to ensure that colleagues working cross-border understand cultural differences, so that their collaboration succeeds.

Four Questions with Numbers
Ok, you are probably wondering why you were asked to put a number in the top-left quadrant. Good, let’s get a sense for the numbers when Americans and Germans do or do not understand each other.

Let’s take the topic Communication. Again four questions:

1. What is your organization’s target number? 2. Which factors contribute to that target number? 3. To what degree are those factors based on collaboration? 4. How does the topic Communication influence that collaboration?

1 – Target Number
First, define your organization’s target number as 100. Then enter that target number in $ or €. You define what target number means for your organization. It could be revenue, profit, cost, investment, budget, a scorecard goal, or other.

2 – Key Success Factors
Second, list the five most important factors which determine your success. These are the things which the organization must do well in order for it to achieve its target number. Assign a % to each success factor. The total may not exceed 100%.

Then multiply each % by your target number. This gives you a $ or € number for each individual success factor. In other words, you have quantified each success factor’s contribution to reaching the target.

3 – Based on Collaboration
Third, estimate to what degree each of those success factors is based on Americans and Germans collaborating.

Assign a % to each success factor. The total may exceed 100% since you are estimating for each respective factor independent of each other. Some success factors may be more dependent on cross-Atlantic collaboration than others.

Then multiply each % by that success factor’s contribution to the target number, as quantified in Step 2. This gives you a $ or € number for collaboration of each individual success factor. In other words, you have quantified collaboration’s contribution to the organization’s success factors.

4 – Influence of Communication
Fourth, estimate the influence of communication on collaboration. That influence may vary depending on the nature of collaboration of a given success factor. Communication in one area of collaboration may be more important than in another area.

Assign a % to each success factor. Then multiply that % by the degree to which each success factor is based on collaboration, as quantified in Step 3.

This gives you a $ or € number for the influence of communication on collaboration for that success factor. In other words, you have quantified communication’s influence on collaboration.

Ten Stories revisited
Do you remember the Ten Stories? One story for each of the ten foundational topics on CI? Each of the stories has a final act. With the title the Cost of Cultural Misunderstanding. You might want to take a look at each one.

If you have time for only one be sure to look at Roger and Karl surprised. It is about two engineering teams. One American. The other German. Making their first attempt at integration. It did not go well. It was not very pretty. And it was very costly.

Company Culture  vs. Country Culture
Folks, country culture runs deeper than company culture. Let me to make the case for this: Which came first, literally, which existed first, the company or the country where it was founded, where it has grown, where it currently exists?

Formulated differently: which existed first the company or the culture of the people who founded and run the company? Let’s get concrete: Which existed first Siemens or Germany and the German people? General Electric or the United States and the American people?

Who existed first Werner von Siemens the German or Werner von Siemens the engineer? Thomas Edison the American or Thomas Edison the inventor? How about Apple Computer: first Apple then the United States? And Steve Jobs: entrepreneur first, then an American? Was Jobs an entrepreneur, who happened to be an American, or was he an American who became an entrepreneur?

Let’s take BASF the biggest chemical company in the world. Is that company more chemistry or is it more German? If you’re not sure ask non-Germans who work for BASF.

Another way to ask the question is: Of the great, iconic American and German companies how many years – or decades – were they primarily a domestic company meaning operating in the U.S. or in Germany before then becoming a truly global company?

Ok, let’s take another approach to answering the question which runs deeper company or country culture: When it comes to the fundamentals, to the foundation, to the deepest levels, in how we think, therefore in how we work, who has more in common:

A German mechanical engineer at Daimler in Stuttgart and an American mechanical engineer at Ford in Detroit. In other words: two mechanical engineers, both in the auto industry. Or a German mechanical engineer at Daimler and a German marketing specialist at BASF, both Germans, or an American mechanical engineer at Ford and an American working in finance at DOW Chemical, both Americans?

Asked in a different way: if you had five Germans and five Americans in a room and in each group was one person working in the disciplines of: engineering, manufacturing, service, marketing, sales, so a German engineer, a German in manufacturing, a German in service, a German in marketing, and a German in sales and the same on the American side, and you asked each of them individually, separate from each other, to respond to a handful of questions about foundational topics such as: communication, decision making, leadership, processes, etc. would their responses run along the lines of discipline or country culture?

In other words, would the Germans and the Americans in their respective disciplines, for example in engineering, have the same or similar responses or would the Germans and the Americans, respectively and independent of the disciplines in which they work, have the same responses?

We are trying to get to an answer, to the truth about which is the deeper driver, on the one side country culture or on the other side company culture, discipline, size of organisation, business sector, etc.

Let’s look at this from another angle:

If it is true that after an agreement has been entered into Germans seldom do follow-up with each other whereas Americans do frequent follow-up with each other does that change based on: the company they are working for, in which discipline they work, for example in engineering, in which business sector the company is operating, whether the company is large, mid-sized or small?

In other words do the American and German approaches to follow-up change based on the culture of the company they are working in?

What exactly is company culture? What does it mean? What would be examples of company culture? Is it plausible that such examples run deeper than national culture?

Even inanimate objects, like office buildings, are cultural in their character. Can there be German office buildings which are not German in their character? Is there such a thing as architecture in Germany which is not fundamentally German?

If it is the case that even inanimate objects are based and driven by culture is it not the case that how people think, work, and interact is also based on and driven by national culture?

Start-ups are start-ups, right? Wrong. An American start-up in Silicon Valley and a German start-up in Berlin are not the same.

Because a start-up in Berlin is German first, then a start-up. They are German start-ups and not American start-ups. A German engineer is a German first, then much later a German engineer. An American in marketing is an American first, then much later an American marketing specialist.

Does anyone really believe that German engineers and Americans engineers think and work in the same way? Well, if you’re not sure ask both American and German engineers who have significant experience in collaborating with each other.