Culture of Change: Myth or Reality?

March 12, 2021

While preparing for the launching event for the Accelerator Lab in North Macedonia our team participated in numerous discussions with both the country office and the event speakers, which were engaging on several levels – from discussing policies and practices to wondering whether and how a culture of change is supported in the innovative ecosystem. It was reassuring to know that we were not the only ones who had multiple unanswered questions regarding the culture of change and transformation and how it could be done most effecti

Tangible and sustainable change can only be achieved by embracing an inclusive approach where all the parties and stakeholders shape and contribute to the vision for the future. Bearing this in mind, it is quite clear that transformation is the only answer to many of the questions we have and the challenges we face as a society. However, as some of the speakers and panellists who took part in the launching event rightfully indicated, change and transformation can be achieved only when the conditions are ripe.

For instance, Saul Singer, the co-author of “Start-up Nation” pointed out that if a society wants to be more innovative it needs to systematically adopt innovation, even if that means at first “borrowing” ideas from more innovative countries. On a similar note, Taavi Kotka, the brainpower behind Estonia’s successful digitalization story, suggested that change comes from the citizens which vigorously demand it, while politicians are just a vehicle for that change. Lastly, Abdoulaye Mar Dieye, UN Special Coordinator for the development in the Sahel, indicated that shocks such as Covid-19 are opportunities to be seized for transforming systems into more resilient models.

In order to be effective, transformation and change need to happen on the societal level. However, this means that change can be heavily affected by culture since culture plays an important role in how we plan and organize our societies. In this, not all cultures are made equal, with some being more open and accepting of change than others. So, what happens when your country is listed as less likely to initiate and accept change? Before attempting to answer that question, we have to consider how cultures respond to uncertainty.

How different cultures handle uncertainty

When analysing how to conduct business in different countries with an understanding of their cultural codex, I have often used Hofstede's model of Cultural Dimensions. In it, Hofstede classifies the general tendencies of countries’ cultures into several dimensions, one of which can be particularly related to a country’s proneness to initiating and/or accepting change. The dimension in question is called Uncertainty Avoidance, which he further describes as the degree to which different cultures show tolerance to unpredictability.

According to Hofstede, cultures which score high on this dimension’s index have a rather controlled approach towards the future and often hesitate to try out unconventional methods. Instead, they try very hard to minimize unknown and unusual circumstances and implement changes slowly, step-by-step, through planning and administering rules, laws and regulations.
On the other hand, those countries which score low are prone to accepting unstructured situations and dynamic unpredictable environments while using as few rules as possible. These countries often use technology as an agent which assists them through uncertainty and new developments.

Bearing all of this in mind, I did a quick check on the rankings to learn more about the current standing of different countries. Namely, the list of countries with the highest Uncertainty Avoidance includes Finland, Germany, Greece, Japan, Mexico, Portugal and South Korea, while Jamaica, Denmark, Singapore, Sweden and Ireland qualify as some of the countries with the lowest scores.

And what about North Macedonia?

The situation in North Macedonia, as well as in neighbouring countries, is fairly similar to the countries which score high in the Uncertainty Avoidance dimension. This means that a culture of change is not particularly supported, with people, markets and attitudes towards innovation and change remaining hesitant.

This leaves us with two immensely important questions that need to be answered:

1.Can we work around the culture and still initiate change and transformation?

2.If so, how can we do that?

The answer for the first question is, of course, yes! By looking at the examples of South Korea, Germany and Finland, it is clear that there are countries which have successfully managed to innovate and change despite a prevailing culture of Uncertainty Avoidance. By cross-referencing this data with the Bloomberg Index of Innovation3, we can see that some of the countries that score high in Uncertainty Avoidance are also among the world’s most innovative. 

This index measures innovation by considering seven metrics: 1) research and development spending, 2) patent activity, 3) tertiary efficiency, 4) manufacturing capability, 5) productivity, 6) researcher concentration and 7) the volume of high-tech public companies.

It is important to note that South Korea has been near the top of this index for the past 6 years. There is additional interesting data from the Global Innovation Index 2020, where North Macedonia ranks above what is expected for the country’s level of development and income category. Though promising data can be found scattered in different studies and rankings, I would refrain from making any conclusions without properly analysing the indicators, as well as the compatibility of the data collected through various tools and methodologies. None the less, it is clear that a culture’s high Uncertainty Avoidance does not completely prohibit innovation and transformation.

However, innovation is an extremely complex concept and as such is difficult to measure. The discourse between the public and the private sector on this is clearly distinguishable. While the most popular tools are designed for measuring innovation in the private sector, the situation for the public sector clearly differs, particularly since the measuring of innovation in the public sector is not carried out with a unified tool.

There is an interesting read regarding this topic called the Copenhagen Manual: A guide on why and how your country can benefit from measuring public sector innovation. Since even the OECD Oslo Manual has not extended guidance on measuring public sector innovation, this manual has paved the way for other means and surveys which collect data in this field.

Finally, we need an answer for our second, rather challenging, question as well: How can we work around a culture that is fearful of uncertainty and still initiate change and transformation?

The reality is that, as with many development issues, there is no single silver bullet or one-size-fits-all solution. The complex set of variables make this process unique to every society and country. Luckily, there is plenty of research that points to various approaches for addressing this issue, one of the most prominent being what is known as the portfolio approach in the development field. The example of South Korea particularly highlights its success on policies which incentivize investment in innovation.

What would work best in our context and our country is yet to be explored, but we have jointly initiated this discussion and we intend to discover the way forward for transformation in North Macedonia.