Culture & Society

Masterclass: Rule Makers and Rule Breakers in Business Culture

Stanford GSB professor in organizational behavior shares practical strategies to build a high-performing culture and drive business growth.

August 13, 2024

Welcome to Grit & Growth’s masterclass on cross-cultural dynamics with Michele Gelfand, Stanford Graduate School of Business professor in organizational behavior. Gain new insights and strategies for understanding your company’s culture — from tight to loose — and how you can use that knowledge to build cultural intelligence in your organization, navigate interactions, enhance company-wide innovation, and drive business growth.

Companies and countries can be a lot like people. Some are tight. Others are loose. Neither is inherently good or bad, according to Gelfand, a leading expert on the impact of organizational culture and the best-selling author of Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World.

Gelfand says this important and often invisible force can drive behavior and, ultimately, performance. This is why she finds the subject so fascinating and why she believes entrepreneurs should pay attention to culture as they build their leadership and business.

Key Takeaways

Culture Matters

“If we don’t understand culture, we’re putting ourselves and our businesses at risk. All cultures have rules, and they’re really one of our best inventions because they help us predict each other’s behavior and coordinate. They’re the glue that keeps us together.”

Tight vs. Loose

“Tight cultures have strict rules and very reliable punishments for when you deviate from rules. They restrict the range of behavior that’s permissible in any context. Loose cultures have weaker rules, their wider range of behavior that’s permissible.”

Strive for Flexible Tightness

“Loose cultures are more creative, but they don’t necessarily scale up. Tighter cultures are better able to implement and scale up, but they’re not as good at coming up with these really novel ideas. And so the big trick here is: How do you bring together both of these elements?”

Watch out for resistance to cultural change

“Try to balance accountability and empowerment, but pay close attention to pushback. Extreme change can be very threatening for people’s sense of control, predictability, and order that’s really needed in these contexts. And what we know is that we need to manage these sources of resistance.”

Listen to Michele Gelfand’s advice to entrepreneurs on creating culturally ambidextrous organizations and learn more about her future research. Don’t forget to take Gelfand’s quiz for determining where you and your team fall on the tight/loose spectrum.

Grit & Growth is a podcast produced by Stanford Seed, an institute at Stanford Graduate School of Business which partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

Hear these entrepreneurs’ stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.

Note: Transcripts are generated by machine and lightly edited by humans. They may contain errors.

Full Transcript

Michele Gelfand:

Culture is such a fascinating puzzle because it’s omnipresent. It’s all around us, but we don’t really think about it. We don’t think about the fact that this invisible force is driving our behavior. It’s like the story of two fish, two fishes swimming along, and they pass by another fish. And that fish says to them, “Hey boys, how’s the water?” They swim on and say, “What the heck is water?” And this is a really kind of simple story with a profound point, which is that a lot of times the most important realities around us are the things we can’t even see, we don’t notice. For the fish, that’s water. For humans, that’s culture.

Darius Teter:

Welcome to Grit & Growth from Stanford Graduate School of Business, the podcast where Africa and Asia’s intrepid entrepreneurs share their trials and triumphs with insights from Stanford faculty and global experts on how to tackle challenges and grow your business. I’m your host, Darius Teter, the executive director of Stanford Seed. You can’t see what I’m holding in my hand, and in fact I can’t see it either. That’s because it’s an invisible guidebook. But explained within it are the rules and norms that shape our behavior and influence our interactions. Today we’re going to be discussing these hidden cultural codes and how entrepreneurs can apply these insights to business and leadership with a guest who’s actually written the book on this topic.

Michele Gelfand:

I’m Michele Gelfand. I’m the John H. Scully Professor of Organizational Behavior here at the GSB, and I’m also an affiliate of the Psychology Department and of FSI [Freeman Spogli Institute for International Studies].

Darius Teter:

Michele Gelfand is the author of the bestselling book, Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World. Her extensive research and writing on culture has received millions of dollars of funding from institutions like the National Science Foundation, the Department of Defense, and the FBI. Her work has been published in top scientific journals and cited extensively in national media. In this episode, we explore what are tight and loose cultures, why some companies veer tight while others veer loose, and what that means for building a business. Michele will guide us on finding the optimal tight/loose balance for a high-performing culture. And here’s the thing: rule makers aren’t necessarily always good for your company, and rule breakers aren’t necessarily always bad. She offers practical strategies to leverage both mindsets and drive company innovation and growth. Let’s start with: What is a rule maker, and what is a rule breaker?

Michele Gelfand:

So what we are studying here is basically the idea that all cultures have rules. Think about the fact that – what would we look like if you didn’t have these kinds of rules for behavior guiding us on a daily basis? We can call these social norms. Sometimes they’re unwritten rules of behavior, and sometimes they become more instantiated in formal codes and laws.

But all cultures have rules and they’re really one of our best inventions because they help us predict each other’s behavior and coordinate. They’re the glue that keeps us together. But what we know is that that glue is stronger or weaker in certain contexts. And this is what we call tight and loose cultures. Tight cultures have strict rules and very reliable punishments for when you deviate from rules. They restrict the range of behavior that’s permissible in any context. Loose cultures have weaker rules, there are wider ranges of behavior that’s permissible, and neither is good or bad. It really depends on the criteria you’re trying to fulfill.

And so Rule Makers, Rule Breakers is my attempt over the last several decades to try to start understanding these deeper cultural codes that drive our behavior. And I’ll just say culture is such a fascinating puzzle because it’s omnipresent, it’s all around us, but we don’t really think about it. We don’t think about the fact that this invisible force is driving our behavior. So that’s kind of weird. It’s an omnipresent force that we don’t think about. It’s like the story of two fish. I talk about this in the last chapter of the book, two fishes swimming along and they pass by another fish. And that fish says to them, “Hey boys, how’s the water?” And they pass on, they swim on and say, “What the heck is water?” And this is a really kind of simple story with a profound point, which is that a lot of times the most important realities around us are the things we can’t even see, we don’t notice.

Darius Teter:

They’re totally invisible

Michele Gelfand:

And it’s invisible. And for fish, that’s water. For humans, that’s culture. And that’s what we’re trying to make visible through our science and practice. I want to say also that these differences are really consequential. If we don’t understand culture, we’re putting ourselves and our businesses at risk. For example, we have a recent Harvard Business Review paper where we track how successful were mergers and acquisitions across 4,700 cross-border acquisitions. And culture really matters.

Darius Teter:

Culture has a lot of meanings in business. I think of culture as a set of expected behaviors. So the old saying that culture eats strategy for breakfast or whatever – Do we all have the same set of norms in our business? Do we understand what’s expected of us and how we’re supposed to be? What does culture mean to you in the context of tight and loose?

Michele Gelfand:

We think about it as the kind of norms and values that have evolved to help organize social action in some particular niche. And I think my perspective is coming from the perspective of cultural evolution, which is, again, why do these things evolve in the first place? It’s not just important to understand how cultures vary, but why they vary. Because once you understand why they vary, we could be less ethnocentric and it can actually help us have frameworks to interpret lots of behaviors through a more simple, parsimonious type of principle.

Darius Teter:

So for example, if an organization is too tight, the leadership could try to introduce some flexibility, and if it’s too loose, they could try to add structure. This is what Michele calls flexible tightness. And it’s crucial for creating balanced, high-performing teams. By understanding these dynamics, organizations can create environments that are able to withstand adjustments when they’re needed. And I can think of plenty of startups over the years that were desperately in need of a little flexible tightness.

Now let’s bring that into the realm of entrepreneurship. You mentioned in your book that Israel has some of the highest per capita startups of any country in the world, but they struggle sometimes to take those businesses to scale.

Michele Gelfand:

That’s right. This trade-off perfectly maps onto innovation because innovation involves both creativity and coming up with crazy new ideas, but it also involves scaling up and implementing. And “tight and loose” provides different sources to that very important endeavor. Loose cultures are more creative, but they don’t necessarily scale up. This is the kind of – the Startup Nation book talks about Israel compared to Singapore. Tighter cultures are better able to implement and scale up, but they’re not as good at coming up with these really novel ideas. And so the big trick here is: How do you bring together both of these elements? If you don’t have both, you’re likely to suffer either on the creativity or the implementation side. And we know that loose cultures in our data are more entrepreneurial.

Darius Teter:

So what does that mean for a business leader who’s trying to pull together an amazing team that needs to do both? Michele explains that the first step is for leaders to analyze their organizations in terms of people, practices, and leadership as they relate to tight and loose cultures. Tight companies attract what she calls Order Muppets, or people who thrive on rules and structure, while loose companies attract Chaos Muppets, those who are more risk-taking and comfortable with ambiguity.

Michele Gelfand:

So tight companies tend to have a lot of people who are high on infrastructure, who like rules, who are able to implement a lot of their work, very precise. These organizations tend to have strong socialization, meaning a lot of training to get people to have the same shared reality. Think the military. You need people to be on the same page in contexts that have a lot of coordination needs and a lot of threat. And so we can think about these organizations evolving in contexts that require coordination and the people are going to be more Order Muppet-like. The practices are more standardized, they’re more focused on formality.

Darius Teter:

Is that inevitable as the company grows?

Michele Gelfand:

Absolutely. And I want to just mention the people, the practice, and the leaders really are aligned. So in tight cultures, we have people who are attracted to these organizations through the Order Muppets, who like a lot of impulse control, are prevention oriented, avoiding mistakes. They’re evolving in context where the practices are standardized, where they’re formal, and they have leaders who are driving these ships who are much more independent and calling the shots. And in fact, in data on leadership around the world, we ask people: What constitutes effective leadership in your organization? Across 60-plus countries, people answer that question very differently depending on whether they’re in tight or loose culture. Tight organizations and cultures like these independent, confident leaders who are helping to coordinate the ship. Loose organizations are very different people, practices, and leadership. They have the kind of Chaos Muppets who are attracted to them, people who don’t really notice the rules, they kind of have some impulse control problems, possibly they’re risk-taking, they’re tolerant of ambiguity. They’re in a context where there’s a lot more empowerment, less standardization, informality. In loose organizations and countries, we know that when we ask people what constitutes outstanding leadership, people in these companies and countries want these kind of empowering leaders. They want the charismatic leaders. They want people to be giving voice into the process.

Darius Teter:

So how does the leadership style in your organization reflect these differences? Whether an organization leans tight or loose, the alignment of people practices and leadership plays a crucial role in its success.

Michele Gelfand:

So think about these people, practice, and leadership and how much they vary in tight and loose organizations. When you’re trying to merge them, it could be a real disaster. And when you’re trying to bring together people in an organization where there’s tight units and loose units, we need leaders who understand these different cultural codes, why they’ve evolved, and the misunderstandings people can have across them. Because the fact is that when we bring in tight units into a loose organization or vice versa, often there’s so much conflict because we don’t realize that, wow, we are so different. Our perspectives, our people, our practices, our leaders, what we think constitutes good leadership is very different. So we really need the best and most effective leaders who are able to take a bird’s-eye view and understand the potential conflicts and help people to understand why they’re both needed for one particular process like innovation.

Darius Teter:

To lead effectively, especially in an international organization or multi-country business, you first need to be aware of your own default mode and also where your key team members fall on the tight/loose spectrum. We’ll include a quiz link in the show notes for you to explore those questions. But let’s say you figured this out. Now, what is the core value that captures your task?

Michele Gelfand:

I would say it’s tight/loose ambidexterity. So what we need to know is that organizations might need to veer tight or loose for good reasons based on the very ecosystems we’ve been talking about: coordination, threat, public accountability. But the more extreme we get in either direction, the more loose or tight we get in either direction in the extremes, the more problematic organization will be. And the trick really is to balance – this could be your core value – both with accountability and empowerment. And that’s really a profound, in my view, way to think about the world. We might need to weigh accountability versus empowerment differently, more or less depending on the context. For example, hospitals really lean tight for good reasons. The military leans tight for good reasons. We don’t want to have them be a loose startup. That would be kind of …

Darius Teter:

“I want you to wing it, doc.”

Michele Gelfand:

But a lot of times when I’m working with hospitals or the military, what we’re trying to say is, okay, let’s kind of shift the weights that you’re placing on empowerment. We need to increase empowerment a little bit while we’re maintaining a, really, a lot of accountability. So think about startups here in Silicon Valley. We might think about how sometimes they get a little too loose, they get a little too focused on empowerment without the requisite accountability. So I would say that we should be thinking about how to balance accountability and empowerment. And when we’re trying to change a loose culture to be a little more tight, there’s a lot of resistance. And the resistance comes from my autonomy, “Don’t tell me what to do.” On the flip side, when you’re trying to insert some looseness, flexibility, into a tight system like the military or hospitals, guess what? Different source of resistance. Here, we’re worried about losing control. We are worried about control and coordination in this context. So you’re telling me “loose” can really backfire. And in fact, companies that have tried to insert looseness into tight systems quickly get a lot of pushback.

Darius Teter:

But how do you introduce ambidexterity in a workplace, especially one that is dominated by one approach, whether it’s tight or loose? That can be tricky. You have to balance empowerment and accountability in that setting. In a tight system, adding flexibility can threaten the existing sense of control and predictability, while trying to inject more structure into a loose system can be met with resistance from those who value and crave their autonomy.

Michele Gelfand:

And the problem is that that extreme change can be very threatening for people’s sense of control, predictability, and order that’s really needed in these contexts. And what we know is that we need to manage these sources of resistance. So now I’m getting into, in addition to just your core values of tightness and dexterity, think about how you can weigh and manage empowerment accountability as you’re trying to shift. If you recognize, you diagnose that your organization’s gotten too tight or gotten too loose and you want to shift, insert some flexibility into a tight system or insert some structure into a loose system, then you need to anticipate what are the problems going to be in doing so.

Darius Teter:

Leaders need to understand the sources of this resistance and address them intentionally. Michele offers a great example from the early days of Microsoft.

Michele Gelfand:

I interviewed Bob Herbold, who was talking about what a loose mess it was in terms of even financial accounting. This was the early days of Microsoft. He told me it was just really unstandardized, people all around the world doing their own thing. And he said, look guys, we need to tighten up. We need to tighten the ship. And he got a lot of resistance of challenges to autonomy and he had to really engage in a different process. He had to get them to feel like they have a voice, that this is a team empowerment situation, that we are going to be better off financially if we do this. He had to sell the incentives and ultimately he convinced them to tighten. But it was a journey that required understanding the source of resistance ahead of time.

Darius Teter:

Was he selling it as structured looseness, but in his own words?

Michele Gelfand:

Yes, exactly.

Darius Teter:

Not, “We’ve got to tighten up. I can’t trust you guys. You’re all off the reservation. We’ve got to pull you back, put a leash on you, corral you in the fence.”

Michele Gelfand:

It was not like that. It’s a really interesting point because a lot of times when people come from loose systems, when we’re talking about implementing rules, they think, wait, you don’t trust me.

Darius Teter:

Exactly.

Michele Gelfand:

And in fact, that is a really interesting topic of culture and trust and tightness and trust that we’re working on now with a new Templeton grant, including in Africa and all over the world. And in some contexts, people really rely on the assurance of rules and networks of felt accountability. Loose cultures are much more likely to trust swiftly, trust strangers. We have a lot of insurance mechanisms, a lot of strong institutions, a lot of mobility that makes that happen a less threat. So it’s okay, we can risk actually if someone does something stupid and we’re harmed. We have a lot of recourse in these contexts. We look at rules, we’re very skeptical. Why are we having these rules that are going to be guiding our behavior? But in many contexts in Africa and the Middle East, in Asia, people trust based on this sense of accountability that is in networks.

Darius Teter:

But what about when the opposite is needed?

Michele Gelfand:

We should anticipate that as we’re growing, we’re going to need to tighten. Invariably, we’re going to have more things to coordinate. And whenever there’s coordination, we’re going to need to have more rules. And often it’s the case that people don’t recognize that. So people I’ve interviewed in the Valley here will say, yeah, I was a small company. We had a great loose mindset, we got bought out. It was our goal and our dream. But then they got into these kind of big organizations where they’re like, wow, I don’t really like this and they don’t like me, and I’m going to just go and start up another company.

Darius Teter:

You can do another one.

Michele Gelfand:

The serial startups. And this is something we can anticipate will be actually the case. And so I think we should talk about culture more explicitly at different life stages.

Darius Teter:

I’d like to do that, but I’d also like to ask about organizations where often what we see is the business leader in our program was able to build a $500,000-a-year business, but they’re stuck. They don’t understand right away that one of the reasons they’re stuck is because they haven’t actually got systems that allow them to trust. So the way we test this is – I think this was Jesper Sorensen that first did this – he said, “Raise your hand if you allow someone other than yourself to sign a $500 payment to a vendor,” and maybe half – you’ve got a hundred people in the room, maybe half the hands go up. “Keep your hands up if you allow someone to sign off on a $5,000 payment to a vendor.” And there’s usually not one hand left in the air. And some of these companies have $2, $3 million in revenue. And it’s like, okay, now I know why you’re all on your phones, because your business can’t run one week without you, and we need you here for a week, fully present. So there’s a place where they both – they need the leader to be a bit looser about their control, but they need systems and processes that give him the comfort or her the comfort to do that, right?

Michele Gelfand:

Yeah. And I think we need to understand the ecologies that these managers and business leaders are operating in. They’re operating in very threatened environments. They’re operating in context with – there’s a lot of corruption, which is a threat. They’re operating in a context where you don’t have the rule of law. And so the real currency here is honor, and you have to constantly be worried about whether or not you can uphold these contracts. And a lot of times leaders have real reluctance to outsource that trust. And so it takes a longer time to build those networks of trust in honor cultures and a context where there’s a lot of threat where rules have really been coming up through bottom-up tightness that we’ve been talking about. You need to take time to figure out who’s trustworthy, who’s honorable in this context. So it probably takes a little longer.

And if there’s more inertia – I want to mention that we talked about tight/loose in terms of order and openness – also, it’s harder to change when you’re trying to loosen tight organizations than tighten loose organizations because there’s a real fear of loss of control and, in this context, money. So I think we need to help people understand: Why are people behaving like this? It’s not just, well, let’s take the American way and help them understand this is how you do business. Let’s think about the ecosystem they’re operating in and give advice that’s targeted to that ecosystem. If we were in that ecosystem, we can sit here in the U.S. and say, oh, come on, just like other people, write the check. That’s a normal business idea, “There’s something wrong with your personality.” I think we need to really kind of develop programs that are very sensitive to the cultural context which people are operating in.

Darius Teter:

You have this interesting quote in your book. Let me see if I can find it here. “People from loose cultures tend to more favorably view entrepreneurship as a reasonable career path.”

Michele Gelfand:

That’s right.

Darius Teter:

I can start a business.

Michele Gelfand:

That’s right, actually, yeah. This is with the global entrepreneurship monitor. We find that people from loose cultures are more likely to report that they participated in entrepreneurial activities in their workplace. They have more startups per capita, controlling for other factors. What’s interesting on the flip side is that people from loose cultures report not having a lot of experience with entrepreneurship, not seeing it as a good career choice. Actually entrepreneurship can be seen as a stigma in some cultures, more likely to be in tight cultures, but tight cultures tend to have more routine. They tend to excel in things like manufacturing, in agricultural output, and things that require a lot of coordination and standardization. And so those things are really good, as we mentioned, for implementation, whereas that creativity is much more important for looser cultures.

Darius Teter:

In a previous job in my career, we had a project to support small businesses in Guatemala. What I learned there was quite eye-opening: starting a business and failing can be disastrous for your family and your reputation. There’s none of the “fail fast, fail forward” mentality that we’re familiar with in Silicon Valley. The high stakes and severe social stigma for failure make entrepreneurship seem too risky in some tight cultures. I wanted Michele to help me understand why people in tight cultures are less likely to pursue entrepreneurship, and is it possible to successfully adapt entrepreneurial models to fit those contexts?

Michele Gelfand:

The issue would be: What is the type of entrepreneurship that we are propagating? What’s the model that we think is important? The Silicon Valley is a really interesting model that works here: break things and break them fast and fail and fail many times. That’s not a model of entrepreneurship in the UAE, for example, that’s much more top down, that’s much more incremental. So you can think about the model of entrepreneurship and innovation we have here in the U.S., particularly in the Silicon Valley, as very generative, it’s very radical. But other contexts have very incremental types of models which work better there in these contexts. Singapore, the UAE – the UAE is actually modeling itself after Singapore – are trying to be more innovative. But to try to go from a tight mindset to radical innovation is a real issue. So we need to think about – let’s try to propagate certain models that are more consistent with the culture where we build the entrepreneurship muscle and support that are more incremental, that then later on we can get to the more radical. We have the safety here.

Darius Teter:

I was going to say safety and privilege, frankly. Where else can you, if you’re building a startup and you went to Stanford and you come from an upper-middle-class family and there’s all this venture capital willing to throw millions at you for your idea, dumb or not, and there’s no consequences for getting it wrong except for the few people who go to jail, right? Very few people go to prison.

Michele Gelfand:

Well, no, that’s right. And I think you’re hitting something really important here, which is that the American kind of model, the myth is, or at least our mantra, is to break rules. If you go to any bookstore, you see all these books about management are about “break the rules.” We think about this as the American dream to just break rules and be defiant. But actually even within the U.S. we know from our work with people from the working class where they don’t have the cushion, they don’t have the safety net from rich parents, that actually these environments are quite tight and they’re also tight because a lot of times we’re in occupations that have more danger, more coordination, needs less autonomy. But the point here is that we can look at businesses where there’s a lot of people from the working class who are trying to avoid hard living, avoid poverty, through having a lot of rules, and to tell people, “Hey, we want you to now kind of check that mindset at the door, and we want you to be innovative.

Okay, you’ve got to create some stuff.” I mean, that’s just ridiculous. Where do they fall on the tight/loose continuum? Why might they have fallen that way? Because I’ve seen a lot of manufacturing organizations trying to get their employees to just suddenly flip the switch and become creative. Now, there are ways to do that. As we said, we’re trying to loosen tight organizations or tighten loose organizations. We can have strategies to give people psychological safety to start exploring. I mean, what you’re talking about is that in tight cultures to stand out and to break the rules and to think outside of the box could be seen as kind of dangerous. And so we need to empower people to start, in baby steps, thinking about new ideas in a safe space, whether it’s offsite, whether it’s on a certain day. It’s providing some context where you can explore and we need to become a little less centralized in these contexts. They’re very centralized, and that stifles that kind of innovation too.

Darius Teter:

Yeah, I love that. So not all rules work in all domains of a business with all people in the business. I think of that as code switching, but actually it’s more the ambidextrous approach.

Michele’s point here really resonates with me. So many business leaders in emerging markets come from elite backgrounds, often with access to resources and safety nets that their employees lack. This disparity can create a tight culture among the workforce where the risks of failure are far greater and more personal. For leaders, it’s important to recognize these differences. If you want your staff to come up with new ideas, you need to convince them it’s safe to do so. No one’s going to voluntarily blow up the lab with their experiment, and it’s going to be different everywhere. Knowing your culture and how it absorbs change is key.

I was thinking often that the pattern you see is a very large company will acquire a small company that is building something really cool or creative or interesting. They’re trying to re-inject innovation back into their DNA, but instead they just absorb the virus and it dies, right? The virus doesn’t take hold of the host. The host kills the virus, and that’s the end of it.

Michele Gelfand:

Yeah, that’s right. They’re both – that mutual kind of incompatibility is – it looks like it’s a great marriage at first to bring in a loose unit, but often it’s the case that we on the tight side say, oh, they’re missing deadlines, they’re unstructured, they’re chaotic. And so it’s kind of ironic that the very thing we’re looking for, which is more creativity, more looseness, we need to anticipate how that’s going to conflict with our own cultural codes and provide the space to understand that both are needed and really anticipate these conflicts ahead of time so we can manage them better and negotiate them.

Darius Teter:

So where do you think Steve Jobs would’ve fallen on the tight/loose spectrum?

Michele Gelfand:

My colleagues say tight.

Darius Teter:

That’s what I was thinking. When he came after his time in the wilderness, and he comes back to Apple and he looks at all their products and he kills off all but three, literally, all the printers, the PalmPilot, all this, everything – it wasn’t called a PalmPilot, it was called something else – but he killed off everything. And he said, well, these are the three things we’re going to make and we’re not going to make anything else. That must have taken a level of discipline, command and control, self-confidence, right? But on the other hand, amazing creative things came out of that operation too. So I’m intrigued by …

Michele Gelfand:

Maybe he was ambidextrous.

Darius Teter:

Maybe he was ambidextrous. Yeah.

We’ve established that culture matters. It’s that invisible guidebook that shapes our behavior, influences our decisions, and drives the success or failure of our businesses. But most of the research has been in the U.S., Europe, and other advanced economies. I wanted Michele to speak to what’s next in this field of research.

Michele Gelfand:

For me, I’m a cross-cultural psychologist. I thrive in, of course, traveling around to do research, whether it’s in prisons or it’s in the field or in the lab. So you asked me about the recent new research. I mean, we have a new grant from the Templeton Foundation to look at the cultural basis of trust, and this is a large country study of surveys, experiments, public goods, type of game, economics type of stuff, a lot of qualitative interviews. Actually right now we’re about to survey people in eight different African nations. We know that Africa is so underrepresented in psychological science and OB [organizational behavior]. We say, look, we’ve got to switch this up. We’ve got to really get out. We have regional representatives. We have, we’ve gotten data for the most recent tight/loose study. We have data from Botswana and Ghana and Kenya and Mozambique. Not surprisingly, they veer tighter than other countries in our data, but there’s also variation there in them. Right now we’re really excited. I’ll tell you to stay tuned because we are …

Darius Teter:

I hope Nigeria’s on your list.

Michele Gelfand:

Yes, of course. Nigeria, actually, we have data from Nigeria. Our hope is to link this to entrepreneurship. So we’re collaborating with people at Wharton now, and we’re trying to build some proxy measures with archival data on tight/loose that until we get data on all nations in Africa where we can map out tight/loose, and we’re trying to look at unique predictors in the region that might have caused the evolution of tight/loose, and also look at the trade-off of order openness.

Darius Teter:

I don’t know how you control for other factors, but Nigeria, of course, incredible entrepreneurship culture there. Kenya has Silicon Savannah, South Africa booming in many sectors, and I don’t know to what extent there are cultural factors underlying that versus environmental factors versus, I just don’t know.

Michele Gelfand:

It’s probably all the above, and in our case, what we try to do is control for these other factors, economic factors. Just say that, okay, the culture matters. In the M&A [mergers and acquisitions] data that I was mentioning, of course, we have all sorts of controls. Is it how much experience you have with cross-border acquisitions? Is it the amount of the deal? Is it the linguistic differences, government differences? Of course, you’ve got to enter all these things into regression and say, oh, “culture still matters.”

Darius Teter:

Think about your own organization. Where does it fall on the tight/loose spectrum? How has your culture evolved or how might it need to evolve? A key responsibility of you as a leader is understanding where and when your business needs more autonomy and flexibility, and where and when it might need more structure and accountability. That can vary by department, by task, and by stage of business. And it’s also hard because these traits of your workforce are typically invisible, even to you. Understanding and managing these dynamics will help you scale your business.

I’d like to thank Professor Michele Gelfand for a thought-provoking conversation and a fabulous book. Don’t forget to check the show notes for additional resources, including the quiz link to explore your own cultural dynamics. Erika Amoaka-Agyei and VeAnne Virgin researched and developed content for this episode. Kendra Gladych is our production coordinator, and our executive producer is Tiffany Steeves, with writing and production from Nathan Tower and sound design and mixing by Ben Crannell at Lower Street Media. I’m Darius Teter. This has been Grit & Growth. Thank you for joining us.

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