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Stuck in the past

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.

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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.