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Executive and professional education

 

New CEOs and other leaders transfer culture from their previous jobs and this can ‘blindside’ them into proposing obsolete solutions to new problems, says a study authored at Cambridge Judge Business School, published in the Academy of Management Journal.

Image of people in an office.

In announcing
new CEOs and other leaders, companies may seek a “new direction,” a “fresh
set of eyes”, or a “cultural shift” at the top to forge a
brighter future. There is no shortage of such terms in the jargon of corporate
press releases.

In fact, new leaders often transfer culture from their former jobs and this can “blindside” them into proposing old and ineffective solutions to new problems, concludes a new study “Stuck in the past? The influence of a leader’s past cultural experience on group culture and positive and negative group deviance” co-authored by Dr Yeun Joon Kim at Cambridge Judge Business School.

“Leaders’
past cultural experiences colour what they ‘see’ as effective solutions for
their groups,” says the study published in the Academy of Management
Journal
. “Their past cultural solutions often blindside leaders when
solving new problems in a new environment in which different performance
standards and contingencies make the old solutions obsolete.”

Traditional
culture research has focused on two viewpoints: that cultures adapt to changing
circumstances as needed – the “functionality” perspective, and that
leaders’ personalities and values shape cultures – the “leader-trait”
perspective. The new study introduces a new third perspective: that while
seeking functional cultural solutions, leaders may actually fall back on their
past experiences for answers, rather than pay the needed attention to current
conditions.

“Leaders
may create group cultures based on a limited search for cultural solutions that
they have acquired in the past,” the study says. “Therefore, the
cultures enacted by new leaders resemble the cultures in the groups in which
they obtained their past cultural experience – essentially, transferring the cultural
traits from the former groups to the current groups.”

Yeun Joon Kim.
Dr Yeun Joon Kim

“The
study has clear implications for boards of directors hiring CEOs and for other
managers who hire group leaders,” says study lead author Dr Yeun Joon Kim,
University Senior Lecturer in Organisational Behaviour at Cambridge Judge
Business School.

Companies
hire new CEOs to imbue new insights. Our research shows that new leaders indeed
deliver different kinds of cultural insights into their groups. However,
companies should be aware that those cultural insights are based on the new
leaders’ past cultural experience obtained in their former companies. Their
cultural insights are not necessarily effective given that the companies they
are moving to may have a quite different set of problems and issues.

“What
worked for a CEO at his or her previous company might be a liability in the
circumstances of the new company, so cultural transfer can be a big problem unless
monitored and if necessary, resisted by the new firm’s board of directors,”
Joon says.

The study
investigated new leaders’ reliance on their past experience by examining a
specific cultural characteristic, “cultural tightness” – a group’s
shared perception of the degree to which the group strictly enforces norms and
rules. Culturally tight groups strictly enforce many norms and emphasise
control, conformity and predictability, while culturally loose groups have
greater tolerance of alternative norms and deviation, and a relative lack of
formality and discipline.

“Cultural
tightness is a highly relevant cultural characteristic to our research because
it represents how groups are managed,” says Joon. “Tight groups set
many norms and rules and enforce them to group members. Loose groups are
lenient in managing people. This means that by examining the transfer of
cultural tightness, we could also investigate how new leaders manage
their groups and the roles of their past experience acquired in their former
companies in the process of managing their current groups.”

The
conclusions of the research were based on a field study on 99 new group leaders
who were hired from outside their companies, and a laboratory experiment
involving 527 undergraduate students at a large North American university.

The study – entitled “Stuck in the past? The influence of a leader’s past cultural experience on group culture and positive and negative group deviance” – is co-authored by Yeun Joon Kim, University Senior Lecturer in Organisational Behaviour at Cambridge Judge Business School, and Dr Soo Min Toh, Associate Professor of Organisational Behaviour at the Institute for Management & Innovation at the University of Toronto Mississauga.