Ten Guidelines for Managers Who Want to Create Culture Change

A common perception is that cultural change has to start at the very top of an organization. But field experience has shown that culture change can begin with the sub-culture of a work-group where a manager who is one or two levels down from senior management decides to become and Island of Excellence® in a sea of mediocrity. As objective evidence of believable, performance improvement becomes known to other managers, change often goes horizontal across the organization through other work-groups, then up through the line organization to top managers. The Breckenridge Institute® has developed ten guidelines that managers should follow when under-taking this kind of culture change (see list below).

1. Make sure that the changes you propose are in the best interest of the overall organization, not the self-interest of your work-group.

2. Solve your own work-group’s problems first and become an example of change.

3. Create your own organizational “space” and obtain additional resources based on the value you add.

4. Align your work-group’s vision with other work-groups, departments, and functional units by focusing on the things you hold in common and contribute to achieving the purpose and goals of the overall organization.

5. Communicate the trade-offs of actually accomplishing change to work-group members.

6. Manage meaning for people both in and out of your work-group so changes are interpreted through the “lens” of your work-group’s vision.

7. Only engage in constructive conflict with other work-groups or managers, and only do this when you have to for the best interest of the overall organization

8. Cultivate allies who will support the change and form open coalitions to ensure that change is sustainable.

9. Create a concrete, tangible path forward with credible next steps and a well-defined picture of the value-added that the change will bring to the overall organization.

10. Find and use exemplars (measurements) to reinforce the fact that change is actually happening and also to accelerate change.


While the specific application of the ten guidelines will change from organization to organization, the principles will hold true in for-profit, non-profit, and government organizations.

The Culture Equation

Ground-breaking studies like Jim Collins’ books (Built to Last and Good to Great) and John Kotter’s book (Corporate Culture and Performance) have shown that while an organization’s culture powerfully molds its operating style and can positively (or negatively) affect the performance of work-groups and entire organizations, “culture” has remained an overly-complex and somewhat mysterious topic for most organizations – until now. Research conducted at the Breckenridge Institute® has identified the constituents of organizational culture and formulated them into a Culture Equation™ that describes what organizational culture is in simple, concrete terms (see below).

POI ↔ COI ↔ ROI = Current Results™

Our work has shown that managers can use this simple equation to improve performance at the organizational, work-group, and individual employee levels simultaneously. The terms of the Culture Equation™ are defined as follows:

• POI = Pattern of Interaction (Informal Rules, Actions, Group Learning)



• COI = Context of Interaction (Formal Rules, Structures, Systems, Location)



• ROI = Repository of Interaction (Tacit Assumptions, Belief Structure, Meaning, History)



• Current Results = The Actual Results an Organization Gets, Not its Goals

The key insight is that organizational culture is composed of all four terms in the equation, with each term being a distinct (but interdependent) category of business elements that interact with the others to produce an organization’s financial and non-financial results. It is the interaction of the four terms that creates organizational culture.

Here’s how the four elements work together to create organizational culture. Day-to-day operations occur as patterns of interactions (POI) within the context of interaction of an organization’s structures and systems (COI). Over time, the interaction of POI and COI functions like a group learning process that creates a repository of interaction (ROI) that becomes an organization’s knowledge-base and the tacit beliefs that managers and staff members have about the organization and the people in it. Over time, these first three elements settle down on an organization-wide pattern of interaction (POI) within the larger context of interaction of the business environment (COI) and the combination of these elements produces the financial and non-financial results that an organization actually gets. This is the underlying process that Dave Hanna is describing when he says that, “All organizations are perfectly designed to get the results they get.”

Most culture theorists have a primary focus on one or two of the terms in the Culture Equation™ as the key elements that define organizational culture, but few systematically consider all four terms and their interrelationship to one another. For example, Edgar Schein focuses primarily on tacit beliefs and assumptions (ROI) that exist within the organization's context (COI); David Hanna focuses primarily on observable work habits and practices to explain how the organization’s culture really works, e.g. the interaction between POI and COI as producing an organization’s Current Results; and John Kotter and James Heskett focus on linking Current Results to the level of flexibility in the POI as found in Theory I: Strong Cultures, Theory II: Strategically Appropriate Cultures, and Theory III: Adaptive Cultures.

Bottom Line: Whether a leader is the founder of a new company or a top line or middle manager in a well-established company, one of their most important tasks is to create, manage, and (if necessary) to destroy organizational culture in order to get the desired results. Our work at the Breckenridge Institute® has shown that the primary way this can be accomplished is by using the precise definition of culture provided by the Culture Equation™.

What Our Research Is Saying About Organizational Culture

The Breckenridge Institute is conducting research on the formation, operational characteristics, and corporate life cycle changes of organizational culture. We're finding that an organization's culture is like its personality, with unique patterns of financial and non-financial performance that are revealed using the Breckenridge Culture Indicator (BCI). We are using advanced statistical techniques like factor analysis to identify effective and ineffective patterns of organizational performance, which subsequently provide a quantitative basis for organizational improvement and change initiatives.

The frenetic pace of today's global economy has increased the need for fact-based decision-making using scientific analysis, not just business experience and intuition. The research being conducted by the Breckenridge Institute staff promises to yield the kinds of tools, methodologies, and quantitative information needed to help leaders and managers make informed decisions and to transform their organization's culture into a more reliable resource.