Thursday, 4 June 2015

Cultural Fit and Organisations

(Young, 2015, after SearchCIO, n.d.)
I read an article by Derek Loosvelt recently, which discussed the use of cultural fit as a hiring strategy in organisations (Loosvelt, 2015).

Derek told his story of his first graduate appointment decision having been made by his employers because he was a better cultural fit for the organisation. He was hired - in his view - because he had alumni links to another manager and because he was 'people like us' (PLU).

Now Derek works for Vault, a survey company. Feedback from the legal, finance and consulting sectors to whom Vault analyses information for - read big names like Goldman Sachs and McKinsey et al - still tells the story of 'fit' being a key hiring point, a way "of determining who belongs and who doesn’t within the ranks of their firms" (Loosvelt, 2015).

Cultural fit can be a great thing: ensuring that the people who work for your organisation are aligned ethically and in values. Good use of cultural fit will ensure that people are hired based on their expertise, skill and work ethic.

However, cultural fit can be a strong limiter when its application crosses the line into a personal focus, rather than an organisational one. As Derek says, where people are interviewed on the equivalent of a 'desert island test'; “Would I want to be stuck [alone on a desert island] with them?” and hired on you are like us in that you look like us, appreciate the same kind of food as us, come from the same racial and socioeconomic background as us, support the same professional sports team as us, even are the same gender as us (Loosvelt, 2015). This approach can, of course, promote group think, ensure a lack of diversity, and, as a result, undermine competitive advantage.

Derek goes on to cite some research by Lauren Rivera from the Kellogg School of Management at Northwestern University, where Lauren found that organisations are often not hiring on a fit with organisational values, but hiring on personal fit springing from shared experiences, a match of hobbies, origins and shaping factors. As a result,
Too much similarity can lead to teams that are overconfident, ignore vital information and make poor (or even unethical) decisions” (Loosvelt, 2015, citing Rivera, 2015).

This is known as a 'Clan' culture, where the focus is insular, on having a group experience, and on cultural maintenance by not introducing 'destabilising' influences. This type of organisation does not introduce non-PLUs because it will damage the clan.  Because of this inwards focus, an organisation with this type of culture is often unable to see change in the external environment until it is too late (Daft, 2015). A 'fiddling while Rome burns' type of organisation.  

So whenever you talk about 'cultural fit', remember to hire on the "likelihood that a job candidate can conform and adapt to an organisation's core values and collective behaviours" and are closely aligned to business goals.

Sam

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