Page 164 - Performance Leadership

Chapter 9 Values and Culture • 153

Internal versus External Orientation
Internally oriented cultures have a strong sense of independence;
they shape their world themselves. Management processes are top
down and sequential. There is a clear focus on a goal, but not much
agility. Strategy sessions are translated into plans, plans are rolled
out, and the results are measured. There is not much tolerance for
uncertainty. The external world is carefully analyzed, but in terms
of how to beat it. Performance indicators focus on a variance
between actual and plan, and they have a strong deadline focus. Peo-
ple are responsible and accountable for their own actions and results.
Feedback is based on the up-or-out principle, and rewards follow the
same principle.
Externally oriented cultures believe their success is the result of the
economy, the market in which they operate, or the weather. Management
processes are very iterative. Many scenarios of potential futures are dis-
cussed. A desirable future is chosen, but in making decisions it is clear
other potential future scenarios will not be closed off. Throughout a
continuous process, the strategy is fine-tuned and updated. At the same
time there is room for some experiments to test ideas a few people had
in the meantime. A highly adaptive environment is tolerant of risk and
uncertainty, yet not always fully focused. Performance indicators are
relative, based on benchmarks, and aimed at agility. Feedback is based
on what the external world thinks, and rewards are group-based, as
everyone contributed to the success.
An externally oriented approach in an internally oriented world will
lead to confusion. People expect clear goals, which they don’t get. Peo-
ple will try to “fix” the environment, leading to gaming the numbers.
An internally oriented approach in an externally oriented world also
leads to problems. People feel unfairly treated. How can they be
blamed for changes in the external environment? They will do every-
thing to discredit the system. See Table 9.7.

Combining Dimensions

Looking at single dimensions one at a time, as we’ve done so far, pro-
vides very limited insight. It becomes really interesting if we start to
combine dimensions. These cultural dimensions are not completely