The Competing Values Framework

Analyzing Corporate Culture

The Competing Values Framework - Analyzing Corporate Culture

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chichi

Clan cultures display strong teamwork.

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:

Competing Values Framework Diagram

Adapted with permission from Quinn, R.E. and Rohrbaugh, J., "A Spatial Model of Effectiveness Criteria: Towards a Competing Values Approach to Organizational Analysis," Management Science, volume (29), number 3, (March, 1983). Copyright (1983), the Institute for Operations Research and the Management Sciences, 5521 Research Park Drive, Catonsville, Maryland 21228.

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.

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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.
  • Recruitment.
  • 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.

Competing Values Framework for Leadership Diagram

Adapted with permission from Quinn, R.E. and Rohrbaugh, J., "A Spatial Model of Effectiveness Criteria: Towards a Competing Values Approach to Organizational Analysis," Management Science, volume (29), number 3, (March, 1983). Copyright (1983), the Institute for Operations Research and the Management Sciences, 5521 Research Park Drive, Catonsville, Maryland 21228.

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.

Tip:

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.

Key Points

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.

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Comments (13)
  • Over a month ago Dianna wrote
    Hi chrishill - it's nice to see you on the forums! I tend agree that these models are best used for analysis and to figure out whether there are some inconsistencies that an organization should be addressing. No model will ever emulate real life and there will certainly a mix - it's figuring out which elements can work together and which are too oppositional to have in one organization. For instance, if you want to move your team toward an adhocracy yet your organizational culture is hierarchical, you're going to have an uphill battle. At that point you decide what needs to be done first, to accommodate the changes you want to make, and whether the changes are really in the best interest of the organization. I think rather than taking a prescriptive approach with these models, it's better to look at them and decide how to apply the insights they provide to benefit your organization.

    I think the very fact that this model has provoked significant thought and inquiry shows its value. The more we question and discover, the richer our understanding will be. We can then use that knowledge to effect meaningful, positive change.

    Dianna
  • Over a month ago chrishill wrote
    I know the dangers of relating one model to another but does the the CVF model have some resonance with DiSC, Miro etc. Is this a useful starting point to develop an analytical tool for CVF?
    Otherwise like all models it is a useful tool in itself to help organisations ask questions and even to identify their own definitions of the parameters, which help them to reflect on the nature/culture of their business and leadership style.
  • Over a month ago bigk wrote
    Hi

    After another read and test I see that I have combined clan and hierarchy while using an adhocracy but have yet not seen exactly how the market style was incorporated, because the use of clan and hierarchy was not only internal focus and there was considerable external focus and customer involvement.

    However as you have said again no style seems better than another and the underlying style(s) in use are perhaps more where the focus is and what needs adapted from this as transition or short term use is made during a given time frame for its use.

    Both the units you describe have similarities but also differences and the implied differences are more where focus for change or need can be looked at and developed or adjusted.
    More strengths, weaknesses and how to combine or how to change the percieved parts that might not match the overall objectives.

    The part I see being in use more is a flexible and adaptable set of qualities in combined styles within or along with another style for other parts of the culture.
    However culture that includes customer and producer (team) might still evolve and be flexible.
    The interpretations are certainly many and the use could still be extended.

    I need to assess some more market detail (area, product) not the quadrant style, o get a more informed analysis of where it can adapt or used.

    The test result was not representative and suggested losing control in the hierarchy to either clan or market, but if clan has greater trust or interlinked working relationships then the need of control may certainly be less if there are good methods to monitor or compare results so that results can be reviewed ahead of a decision or too long a commitment to a certain route without good return or adaptability in achieving either culture goals and results or customer improvement and product results and improvements.
    Looking at how to adapt continuous improvement and culture together seems a logical step and is most likely already being considered as useful comparison although continuous improvement might not only be the objective.
    Looking at separating team,customer,result and then assembling together again for change or a particular need, but checking external and competitor market trend or lack of trend, then comparing how it might be used in a changeable environment.

    Evaluating...
    Been useful work thanks for your interpretation.

    Bigk
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