CEOs love talking about culture. Here’s why they shouldn’t.

Attributing organizational success to culture doesn’t help anyone, because no one knows what culture is.
Ask CEOs in any industry their secret to success, if their answer isn’t “the people,” $100 says it includes the word “culture.” In one edition of Wall Street Journal’s “The Experts” column on the five biggest priorities for CEOs, culture is mentioned 15 times!But what the heck is “culture”? Apparently, academics have some 164 definitions of culture. Don’t worry though, you don’t have to read them, let me summarize: Culture is the implicit and explicit patterns of behavior, structures, beliefs, values, symbols, customs, etc., that are shared by a group or society. So I’m a CEO of an institution that’s struggling. We aren’t making our numbers, morale is low and there are service or product errors. I seek out the help of other CEOs. They tell me I must improve the culture. That doesn’t really help me. “Everybody says it’s the culture, but what is the culture?” asks John Kenagy, MD, founder of Kenagy & Associates and a former practicing physician who has studied change management for more than two decades. “Culture is such a meaningless term; it really dodges the issue. Nobody’s talking about what it is.”What is ‘culture’? According to Dr. Kenagy, culture, for all practical purposes, can be approached as the sum of four things: mindsets, methods, strategies and structures (which he’s dubbed ‘M2S2’ for short).That is to say, the M2S2 of your organization are tangible elements of the culture, that when taken together make up the culture — an idea that is a lot less tangible take by itself. Let’s return to my example of the struggling CEO. While he or she can’t do a lot with “it’s culture,” he or she can certainly implement or adapt the M2S2 of like, successful organizations into his or her own. So, what mindsets, methods, strategies and structures should successful in healthcare organizations develop?According to Dr. Kenagy, the most successful organizations — those able to weather rapid change and market disruptors — are those that have adaptive cultures. Therefore, organizations should seek to implement M2S2 that support and create structures and processes to foster a culture that adapts quickly to change. Cultures must support adaptive changeWhy is adapting to change so important? To understand this, it’s helpful to explore the theory of Disruptive Innovation, the popular change management theory advanced by Harvard Business School’s Clay Christensen, who Dr. Kenagy studied with as a visiting scholar from 1998 to 2002. Under the theory, organizations that don’t introduce innovation will be disrupted by it.However, Dr. Kenagy has advanced his own theory, ‘Adaptive Design’ that argues against the ‘disrupt or die’ mentality. Instead, he believes organizations can adapt, successfully, to disruptive innovations from competitors or other market entrants. “Disruption gives you this kind of view of ‘boom!’ and it’s actually not,” he says. “Innovation is going to happen, and it will either be disruptive or adaptive to your organization. It’s your choice as a leader to be disruptive or adaptive. It’s more about what the change is doing to you.”Organizations can succeed in the face of disruption if they adapt quickly — which requires leaders with savvy change-management skills. Adaptive change doesn’t sound revolutionary, but it sort of is To become an adaptive organization, leaders must support instituting the structure and processes (that is, M2S2) that foster active adaptive change, which is characterized by the ability to change your organization’s processes or procedures quickly and appropriately in the face external market forces. The problem is, most organizations are ridiculously bad a responding quickly to business changes. Why this is involves a quick history lesson. During the Industrial Revolution, businesses that succeeded were the ones that were best able to organize workers and their responsibilities through a hierarchical structure. Managers directed work, and the front-lines carried it out. Management decides, measures, analyzes, improves and controls front-line work. Bigger problems move higher up in the organization.But, what worked in the Industrial Revolution, doesn’t work today. Organizations have so much data that management can’t move quickly enough. “Moving data up is just too slow of a process and too inflexible,” Dr. Kenagy says.Instead, organizations must implement M2S2 that enable and empower front-line workers to make and implement decisions on how to improve their work, and to do so in a way that creates a new “value” for the organization. Essentially, the organization moves away from traditional management (where decision making is sent up the chain) to one where decisions are made and data is analyzed on the front line, by those that are doing the work and know it most intimately. There are no managerial pow-wows to first assess the potential impacts of change or prioritize which have the biggest ROI potential. The ability to change the organization shifts from a top-down approach to a bottom-up one.