Culture Change Part I – The Social Contract

Culture Change Part I – The Social Contract

James R. McCarthy, MS, CPC

Word Count: 692 words
Time to Read: 1-2 minutes

Organizations have developed over time what is called a “Social Contract”.  In this contract, the organization “agrees” to provide such things as structure, meaningful work, policies and procedures, training, compensation, and experienced management oversight.

In return, the employees provide time, effort, knowledge, skills, abilities, motivation, experience, etc.

Together, these things harmonize to make an organization productive, and to run more or less smoothly.

This Social Contract also helps form the basis for the Culture of an organization.  As you will see shortly, culture consists of, or is reflected in part by the rules and regulations; agreements on how decisions are made; structures; symbols - such as mottos, dress codes, and space allocations - and perhaps most importantly, the underlying values and assumptions that guide everyday work and behavior.

Culture is an excellent “lens” through which to look at what is happening in any organization.  It touches all levels and all areas of the business.

When a major change occurs, such as reorganization, a merger, or the introduction of a new strategic focus for the business, that whole cultural foundation that has been built upon the unspoken agreements of the social contract can be shaken, severely damaged, or even destroyed.

In that scenario regular employees and management, who knew more or less what their future would most likely be now do not.  They are not sure if their skills will be a match for the new requirements.  They don’t necessarily know how to behave any more.  They may not even know how to do the work any more as work rules are unclear, seem to be arbitrary, or have simply disappeared.  They do not have a clear sense of what is valued any longer.  All this uncertainty helps them become frustrated and scared, and when people are scared, very dysfunctional things can happen.

Because employees are worried and unsure, resistance to the changes can occur.  It may manifest as conflict between workers; conflict with management; an increase in sick time usage or accidents; work slowdowns may happen; quality and productivity may suffer, there will be unclear messaging; potentially vague lines of authority, and more.

Management is not exempt in any way from this process.  Managers may no longer be sure of how to do their jobs effectively; how to communicate; how to evaluate people; how to motivate; instruct, and develop subordinates – it may be even be unclear how to strategize and set goals since a clear Strategic Future Picture may no longer exist..

So, what often happens is that the organization starts to “speak” louder at each other.  For Leadership, Speaking can refer to the exercise of raw management power with little or no consultation, for example:

  • New roles; new policies and procedures; reductions in hours, even firings.

On the employee side, this can include:

  • Direct insubordination; peer conflict; poor work quality; work slowdowns; safety lapses; absenteeism; harassment; declining output, and more.

Having a clear, well-articulated vision of the future substantially reduces the possibility that major change can significantly impact the future of your firm.  Strategic planning offers a number of persuasive reasons for its use. Strategy:

  • Forces a look into the future and therefore provides an opportunity to influence that future, or assume a proactive posture.
  • Provides better awareness of staffing, facility, and training needs.
  • Helps define the overall mission of the organization and focuses on the objectives, key leverage points, and measures of progress.
  • Provides a sense of direction and continuity.
  • Increases awareness, involvement, and buy-in, and provides standards of accountability for people, programs, and allocated resources.

Companies or organizations have a stark choice; they can let the fear and uncertainty overwhelm them, with serious consequences for individuals and the business, or, they can act decisively, with a solid plan based on reliable data and connected to a well-articulated Strategic Plan.

At Wolf Management Consultants, we can help you navigate those uncertain and potentially deadly times.  We have a variety of programs and processes, as well as a staff comprised of only very seasoned and senior practitioners.



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