It’s abstract, amorphous and intangible, but oh so real. You see the results of it and if you’re attuned to look for it, you’ll know it when you feel it.
It’s the glue that holds a company together and the grease that moves the wheels of change in an organization.
We’re talking about cultural capital.
The term was first used by French sociologist Pierre Bourdieu who believed that an individual’s knowledge and skills supported one’s social standing.
We will use the term as it can be applied to leadership and define cultural capital as the non-material assets and resources that allow leaders to be effective. This includes a leader’s knowledge, skills, personality, and their ability to develop trust and good will among the stakeholders both within and outside the organization. Just as businesses require financial capital to sustain their operations, leaders require cultural capital to successfully lead their organizations.
You’ve heard us talk a lot about the importance of company culture - the collective knowledge, beliefs, behaviors, values, and social skills that make up an organization’s personality. Culture impacts how employees interact, make decisions, and collaborate with each other. It also influences the quality of work that is produced and how customers experience the company.
When leaders try to make changes in their organizations, they frequently bump up against the company’s culture. Traditional practices and patterns of interaction become deeply embedded and don’t change just because the boss sends out an email about doing things differently. Employees may listen attentively to these new ideas but then they often go back to doing what they’ve always done. Sometimes this is an act of defiance, but often it’s just because the leader didn’t have enough cultural capital to modify the status quo.
Consider this example:
Paige was hired by New Sun’s board of directors to modernize the software company and reduce inefficiencies. She was brimming with ideas about how to lead the company in becoming a robust competitor in the industry.
Her first attempt at achieving this goal was ambitious and included a massive restructuring to create cross-functional teams. She presented her vision at a company wide meeting, complete with slides, case studies, and an impassioned speech about how this approach would boost company margins.
The reaction was lukewarm at best. After the meeting, she overheard comments such as:
"She doesn't understand how things work here."
"Why fix what isn’t broken?"
"Just another outsider who has no idea what it’s really like."
Paige’s ideas were solid, but she lacked the cultural capital to make them happen. Since the staff didn’t know or trust her, her vision felt like a threat to their expertise and way of doing things.
Paige, however, continued with her plan, reasoning, “I’m the boss. This is what I was hired to do and their job is to listen to me.” Several stressful months later, the company was plagued with discontent, division and disengaged employees who were looking for other jobs.
If Paige had taken the time to accumulate cultural capital before instituting change, she could have achieved a different outcome.
Next week, we will talk about how it might look to leverage cultural capital when making change and what leaders can do to garner cultural capital in their organizations.
In the meantime, think about changes your company has had to undergo and reflect on the following questions:
Are changes in your organization initiated from leadership, from staff, or a collaboration of both?
How are changes typically communicated in your organization?
How does your staff typically react when changes are introduced?
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