I think there are a few puzzles about a good institutional culture (IC) and their tendency to fade/thrive here.
If an institution has a good IC, does it always thrive?
Can an institution thrive even without a good IC?
How can we distinguish carefully between a good IC and the condition of fading/thriving? For example, if a good IC brings a good reputation, but we say that the NY Times is fading because its reputation is declining, then saying that lacking a good IC caused the NY Times to fade is tautological.
A good IC may neither be necessary nor sufficient for an institution to thrive. But is the creation of a good IC necessary (if not sufficient) to create an institution?
If a good IC is of overriding importance to the existence, success, or failure of institutions, then what are the necessary and sufficient conditions to create a good IC from scratch? To turn a bad IC into a good one?
My dad has a story from when he took over his first nonprofit clinic as a CEO. It was in severe financial distress when he started. Two of the doctors, he discovered, liked to play a game. Rather than taking on patients (they were salaried), they would stand in one of the rooms and try to toss pennies out the window and get them to land on the window ledge of the building across the alley. One of the things my dad did to turn it around was to tell them that they’d be fired if they didn’t change their ways.
In this case, I think the order of events was something like:
The clinic was fading. Decision-makers responsible for it brought in a new leader to investigate the IC. He discovered that there was a disconnect in the self-reinforcing cycle: two of the producers were neither being rewarded for working nor punished for not working. By threatening to punish them for not working, the leader took a step towards restarting a good IC.
This suggests a new, important facet to your question. How does the IC of an institution get repaired and maintained when it breaks down? If an institution fails entirely, when and how do its parts get recycled into healthier institutions? When a fading institution breaks down, is this generally bad (because it’s gone from bad to nonexistent) or good (because now its parts can be reincorporated into institutions that are thriving).
It also suggests to me that a hierarchy of responsible leadership is important. Having supervisors who can add, remove, or replace workers, or leaders, at various levels of the hierarchy has two good effects. It is both incentivizing as a reward or punishment, and it allows a more detailed investigation of the inner workings of a particular institution.
This loosely suggests that one failure mode for an institution is when the highest leadership is corrupt. In a democracy, the highest leader is the citizenry who elect officials. If the citizens are corrupt, then the democracy will suffer. In a small business, the highest leader is the owner. If the owner is corrupt, then the business will suffer. In a publicly-traded company, it is the shareholders and the government (and, by proxy, the citizens) who are the highest leaders; if one or both is corrupt, then the corporation will suffer.
I think there are a few puzzles about a good institutional culture (IC) and their tendency to fade/thrive here.
If an institution has a good IC, does it always thrive?
Can an institution thrive even without a good IC?
How can we distinguish carefully between a good IC and the condition of fading/thriving? For example, if a good IC brings a good reputation, but we say that the NY Times is fading because its reputation is declining, then saying that lacking a good IC caused the NY Times to fade is tautological.
A good IC may neither be necessary nor sufficient for an institution to thrive. But is the creation of a good IC necessary (if not sufficient) to create an institution?
If a good IC is of overriding importance to the existence, success, or failure of institutions, then what are the necessary and sufficient conditions to create a good IC from scratch? To turn a bad IC into a good one?
My dad has a story from when he took over his first nonprofit clinic as a CEO. It was in severe financial distress when he started. Two of the doctors, he discovered, liked to play a game. Rather than taking on patients (they were salaried), they would stand in one of the rooms and try to toss pennies out the window and get them to land on the window ledge of the building across the alley. One of the things my dad did to turn it around was to tell them that they’d be fired if they didn’t change their ways.
In this case, I think the order of events was something like:
The clinic was fading. Decision-makers responsible for it brought in a new leader to investigate the IC. He discovered that there was a disconnect in the self-reinforcing cycle: two of the producers were neither being rewarded for working nor punished for not working. By threatening to punish them for not working, the leader took a step towards restarting a good IC.
This suggests a new, important facet to your question. How does the IC of an institution get repaired and maintained when it breaks down? If an institution fails entirely, when and how do its parts get recycled into healthier institutions? When a fading institution breaks down, is this generally bad (because it’s gone from bad to nonexistent) or good (because now its parts can be reincorporated into institutions that are thriving).
It also suggests to me that a hierarchy of responsible leadership is important. Having supervisors who can add, remove, or replace workers, or leaders, at various levels of the hierarchy has two good effects. It is both incentivizing as a reward or punishment, and it allows a more detailed investigation of the inner workings of a particular institution.
This loosely suggests that one failure mode for an institution is when the highest leadership is corrupt. In a democracy, the highest leader is the citizenry who elect officials. If the citizens are corrupt, then the democracy will suffer. In a small business, the highest leader is the owner. If the owner is corrupt, then the business will suffer. In a publicly-traded company, it is the shareholders and the government (and, by proxy, the citizens) who are the highest leaders; if one or both is corrupt, then the corporation will suffer.