How to Recognize — and Change — the Shared Dominant Logics Running Your Organization

What does “culture” mean to you? Is it how people feel? What they do? What they like and don’t like? What they value? What they say? Does it have something to do with free food and foosball? Or some combination?

If you are not sure, you are not alone. In popular use, the word is a mash-up: we can never be sure what someone means when they use the term.

Let me ask you a few more questions: What does culture have to do with how you plan or set strategy? What does it have to do with how you manage day-to-day business, or delegate authority, or define success, or prioritize? If you answered “everything,” then you intuitively grasp the what the latest science is discovering about culture.

Culture is Your OS

From the perspectives of neuroscience, cognitive anthropology and related fields, culture is shared knowledge. It runs in the background and is taken for granted. We know it but don’t know we know it until it is brought into our awareness.

This is different than saying that culture is beliefs, norms, values, attitudes, or behavior. These things relate to culture, sure, but they are like apps. The crucial difference is that these are the product of conscious awareness and choice. Culture exists mostly below consciousness. Culture is not the app; it’s the operating system.

This is not semantics. It may be difficult to accept this because we like to think that everything we do in business is based on a conscious choice. This does explain, however, why culture is so hard to change. As background knowledge, it is automatic and habitual.

Think about how you know not to stare at strangers in an elevator. Or in which meetings you can multitask versus pay close attention. Or how much command of detail you need to have to present at the next business review. These bits of know-how are culture.

Shared Dominant Logics

Cultural knowledge at its core consists of basic mental representations — preverbal beliefs we like to call shared dominant logics, or SDLs. Think of rules-of-thumb, idealizations, or ways of rationalizing that are taken for granted and assumed. SDLs operate as discernible patterns that show up again and again across the organization.

For example, take an industrial manufacturing company obsessed with quarterly financial performance and closely controlling all risk. What distinguishes an SDL from an ordinary business practice is its pervasiveness: SDLs of short-termism and risk aversion will show up across many processes, routines, and habits, such as in how the business pushes customers for orders to close out the quarter, or how it rarely promotes “unproven” internal candidates into senior level roles. SDLs pattern beliefs and behavior across functions, departments, and divisions, embedding everyday business practices with assumptions about what is “good” or what constitutes “success.” When similar assumptions and beliefs underlie diverse practices such as strategic planning, product development, or how you deal with conflict, that is a sure sign of a dominant logic.

Resources for Making Sense

In other words, SDLs are habituated ways of making sense. They may emerge from the tacit know-how used to overcome the market and technological demands the company faced to get to where it is today. Or they may stem from the belief systems of your company’s most influential occupational group (e.g., engineers in software companies, doctors in HMOs, actuaries in insurance…). At times, they will be based on both. Cultural knowledge is how humans adapt to their environments — and it’s always curious how consultants and business leaders assume culture is a construct invented by them, when in fact it is observable in all human societies across millennia.

Your SDLs Keep You Running in Place

If you want a more sophisticated understanding of culture, you should care about SDLs. Since they preserve the status quo, they are what will prevent your company from changing.

Cultures are always “perfect” for their environments. But what happens when you try to triple in size in two years, or turn your industrial platform into a digital one? That’s when our attention is suddenly drawn to dominant logics, much like a notice from the bank saying our account is overdrawn. We are so habituated to our own culture we don’t take notice – until it no longer works for us.

This can be readily seen in digital transformation. Most so-called digital values — such as constant innovation, pushing decision-making to the lowest levels, failing fast, agility, and design thinking — are an anathema to the typical industrial culture. It’s not for lack of trying:  most manufacturing executives have read the best practices and retained the strategy consultants to figure out how to “go digital.” The problem is that these new values are like a virus: the logics at the heart of industrial culture react to them like antibodies — and go on the attack.

Take constant innovation: most manufacturing R&D teams follow mechanical stage-gate reviews that lay out a structured and serialized product development process that’s designed to minimize risk and define projected ROI at each stage of development. When short-term financial success and risk mitigation are the dominant logics, innovation by definition is incremental. In an environment where what is considered good or worthwhile has clear financial returns, and where minimizing risk and avoiding unknowns is prized above all, these and similar logics will unwittingly detract from the ideal of constant innovation.

Coming to know your SDLs is truly the first step in sustainable organizational transformation. Industrial logics are not “wrong.” On the contrary, they are “perfect” — perfect when the cost of failure is high. They are far less perfect for a digital enterprise. But until industrial leaders learn how to “see” their own dominant logics, their transformation efforts will be in jeopardy.

Written by David G. White, Jr., Ph.D. Have you read?
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