The Competing Values Framework
Analyzing Corporate Culture
Think for a moment about the Google organization. What comes to mind? Probably words like "flexible," "innovative," or perhaps "fun corporate culture," right?
Now think about a government department, or a university. When you envisage organizations like these, words like "stable," "dependable," and "steadfast" are more likely to come to mind.
All companies have their own unique culture. Some companies are effective and successful because they're fast, adaptable, and always at the cutting edge. Others are known for their slow, steady evolution, their dependable values, and their longevity.
Understanding your own corporate culture is important, because that culture will affect the decisions you make, the processes you want to implement, and the results you can expect from your teams. But correctly identifying a corporate culture can be tricky!
This is where the Competing Values Framework comes in. The Competing Values Framework not only makes it easier for companies to identify their corporate culture, but it also helps leaders make the right decisions, recognize and work with the contradictions inherent in their organization, and improve value and effectiveness.
In this article we'll look at exactly what the Competing Values Framework model is, and we'll show you how you can use it in your work place to improve your own and your team's performance.
Understanding the Tool
The Competing Values Framework (CVF) was first published in 1983 by R.E. Quinn and J. Rohrbaugh, as a result of their research into organizational culture and leadership.
The CVF was created to help an organization understand its culture, and to determine what makes it truly effective.
The model is based on the finding that most organizations can be described using two dimensions, represented by a horizontal and vertical axis each running between opposite or "competing" values. In practice, this means that even the most transformational and innovative companies have somewhat predictable patterns. What's great about the CVF is that it helps organizations to locate their starting point, and to predict what tensions and trade-offs they can expect when implementing change.
The CVF is shown in Figure One, below:
The first dimension is represented on the vertical axis and shows where the organization's culture sits between the extremes of being completely flexible and absolutely stable. Google, for example, would sit well towards the "flexible" end of this axis, in contrast to an organization like the New York Stock Exchange, which is rightly bureaucratic and consistent.
The second dimension is represented on the horizontal axis, and shows whether the organization is more internally or externally focused. Organizations with a strong, internally focused culture benefit from effective relationships between team members, and clearly defined processes. General Electric, for example, is renowned for its internal focus on the Six Sigma quality approach. In externally focused organizations, such as Apple, the culture puts strong emphasis on valuing customer satisfaction and competitiveness.
As you can see in Figure 1, these two intersecting axes result in four quadrants, each representing sets of values and typical activities. Organizations in each quadrant are described as follows:
Clan (Collaborate) – The Clan quadrant, in the upper left, represents teamwork, effective relationships, personal empowerment, and talent management. This is the "people oriented" section.
Market (Compete) – This quadrant, in the lower right, is Clan's opposite. It represents goal achievement, fast response, and competitiveness. This is the "task and goals" section.
Adhocracy (Create) – The Create quadrant is located in the upper right section. It represents innovation, creativity, and planning for the future. This is the "informal and entrepreneurial" section.
Hierarchy (Control) – This quadrant, located in the lower left section, represents bureaucracy, structure, and efficiency. This is the "formal, stable" section.
There is no "best" or "worst" quadrant to be in. Most organizations will show all of these characteristics to some degree. But what matters is that the characteristics of one, or perhaps two, of the quadrants will be clearly dominant. The "right" quadrant for an organization at a particular time will depend on what it produces or does, where it is in its lifecycle, the conditions in which it operates, its position within the marketplace, and its source of competitive advantage.
The vertical flexibility/stability axis of the CVF is similar to the "Feedback Speed" dimension of Deal and Kennedy's Cultural Model, which is also based on two dimensions. Although the two models differ in their second dimension, each is based on research observations, so they can be seen as offering slightly different perspectives on the hard-to-define phenomenon of organizational culture.
Using the Competing Values Framework
Once you've identified which quadrant your organization lies in, you can use that knowledge to enhance the values and behaviors typical of that quadrant, in order to strengthen your existing culture.
On the other hand, if your current culture is leading to problems, you may want to pay attention to the qualities of the diagonally opposite quadrant. By incorporating some of these into your company or your team's practice, you may be able to bring about positive change. However, you need to be aware that you'll have to make trade-offs in the opposite quadrant. If you need to encourage creativity, for example, expect to lose a bit of control. On the other hand, if you want your organization to focus on being competitive, you may find there's less scope in your team for caring and collaborative relationships. If you use the CVF to anticipate these kinds of outcomes, you should find it easier to handle them.
The CVF has a wide range of uses, including:
- Mapping leadership roles and responsibilities.
- Designing a new organization or department.
- Improving performance within an organization or department.
- Assessing quality in products or departments.
- Identifying effective learning approaches.
CVF in Action
Let's take the example of an educational publishing company that has some serious morale issues. The employees are overworked, and the atmosphere in the offices is very bureaucratic, rigid, and stale. The company leaders know they need to make a drastic change in order to reinvigorate their workforce.
Using the CVF, they can quickly see that their corporate culture is located in the Control quadrant. The opposite sector is the Create quadrant.
With this in mind, the company's leaders develop a plan that will enable their team to start expanding into that quadrant. They give team members a small amount of time every week to pursue their own product development projects. One editor uses this time to go out on calls with some of the sales force. As a result, she gets feedback from bookstore buyers that leads to redesigning the covers for a key series of books. Sales then leap, as stores give the more attractive books better shelf positions.
Team members are also given more flexibility in how they complete their work, and rewards are introduced for coming up with creative solutions to old problems. As a result, one warehouse operative suggests a much more cost-effective way of dealing with "returns" from stores.
By identifying their current position, as well as its exact opposite, the publisher was able to bring new life to their team, because they could see clearly where they needed to go.
Using the Competing Values Framework to Learn About Leadership Roles
The CVF doesn't just tell you about corporate culture. It can be extended to identify leadership styles that are generally assumed to fit with the cultures in each quadrant. You can see this illustrated in Figure 2.
Typical leadership traits in each quadrant are as follows:
Clan (Collaborate) – Leaders in this quadrant tend to be described as mentors, facilitators or team builders. They hold everything together when times are tough, and encourage the pursuit of shared objectives. They'll help members of their team develop the skills needed to work together more effectively.
Market (Compete) – Leaders in this quadrant are results-driven, and usually focused on the short-term. They like to take charge, and act fast to close deals with customers.
Adhocracy (Create) – Leaders in this quadrant are visionaries, who embrace change and new thinking, and are often not overly worried about risk. They're not just imaginative, but eager to turn their ideas into reality.
Hierarchy (Control) – Leaders in this quadrant are best described as managers. They're focused on organizing, problem solving, and ensuring things are done correctly. They're scrupulous about paying attention to detail, staying informed, and being rigorous in their analyses.
Whilst a team or organization will largely fit in one quadrant or another, individual leaders can more easily switch between quadrants, adopting different leadership styles as the situation demands.
When you use the CFV to analyze how you work as a leader, make sure you also apply the tool to your team or organization as a whole. The most effective leaders will be able to introduce elements of the leadership style from whichever quadrant the wider group is targeting.
The Competing Values Framework is a great tool for helping you, or your company, establish a starting point for change. Using this model, you can easily see where you are currently, and where you'd like to go.
It can be used in a wide variety of ways, from identifying and changing corporate culture, to helping leaders be more effective, to creating a new marketing strategy in response to emerging competition.