The culture risk framework you need to know about

When I first saw Dr Tatyana Mamut’s research I was blown away. She’s a cultural anthropologist who worked in advertising for a long time. She also founded IDEO’s organizational development practice and worked as a product leader at Salesforce.com and Amazon Web Services. She has now taken some ideas that she developed on how to build successful companies to a bigger audience. One idea she has developed is the concept of a culture risk model.

There are five different types of culture risk

Tatyana’s culture risk model looks at what risks an organization is facing at any point in time. The model maps out five core risks that are inherent in everything an organization does. The five risks are:

1. Scaling - Where the company is growing too quickly and can’t keep what makes its culture special.
2. Fragmentation - This is where the culture is splitting along geographical or functional lines, for example.
3. Conformity - When the organization is too insular and isn’t bringing in new voices or ideas.
4. Attrition - Where the company is losing people too quickly. 
5. Stagnation - Where the company is not innovating enough so it’s atrophying. 

At any point in time, any one or more of these risks may be relevant to an organization. Culture is a journey and the risks that a company has today may be different from the risks they have at another point in time. 

Using risk as a lens to discuss culture

What I really like about this culture risk model is that it’s less about what makes a good or a bad culture. Instead, it says that these risks all exist, but at any point in time some risks will be more important to solve for than others. You will always have these risks, but it’s about knowing which ones are most pertinent to what you’re doing now. 

The model also starts to put culture into a language that boards are more comfortable with. You don’t get to be a senior executive without being good at managing risk. This model puts culture into a language that resonates. 

Senior leaders can have a conversation about what the risk is, how big it is and what the impact is. For example, if we identify that attrition risk is an organization’s biggest issue then business leaders can look at what might happen to their company if that risk is not addressed. 

An organization will always have these culture risks but some will be more pertinent at a given point in time. It’s like spinning plates - you have to work out which one is going to break first, fix the problem and then look at which one may break next. This model helps frame the case for action. 

When I was watching Dr Mamut at our Culture First conference I turned around to the person next to me and asked them what their risks were. That person ran a company of 800 people and they believed their risks were attrition and stagnation. Thinking about Culture Amp, I would say our cultural risks right now are scaling and fragmentation. 

This model is a very powerful lens to use when talking to your business leaders about culture. It makes culture actionable and helps leaders understand the risks and the consequences of the choices they’re making right now.

Didier Elzinga is a People Geek and CEO/Co-Founder of Culture Amp. You can follow Didier on Twitter and LinkedIn. This post was first published on the Culture Amp blog.