Situational Indicators: Reading Organisational Culture Through Lived Experience

Narrative Inquiry, Situational Indicators, and Second-Order Observation

Part 2 of a series on narrative inquiry, organisational culture, and conversations for change.

In the previous article, I explored how organisational culture can be understood through what Niklas Luhmann called undecidable decision premises: premises that guide choices without being available for direct decree. They are the answers one receives without ever being presented with the originating questions.

Why does culture matter? Not to turn it into an abstract entity or a fuzzy property, but to recognise the sedimented choices and unwritten premises that directly shape how people act and decide each day. Even if we cannot map culture exhaustively or reify it into a simple object, there are specific patterns we can notice and influence.

If we cannot simply decide culture into existence, and if these premises cannot be found on a policy document or corporate values poster, how do we begin to notice them?

The conventional response in organisations is to deploy a diagnostic: an engagement survey, a Likert-scale culture assessment, or a round of structured executive interviews. Yet these instruments frequently stumble over a fundamental paradox: culture is invisible to direct interrogation.

Ask people directly, “What is our culture?”, and you will usually receive either the formal corporate values repeated back to you, or safe platitudes about teamwork and collaboration. When you press someone to explain why they take certain assumptions for granted, or why they act one way rather than another, the question itself can feel absurd, impolite, or threatening.

Rather than treating culture as a set of shared values to be measured with a questionnaire, Jesper Tække proposes an analytical strategy focused on semantics—an approach designed to listen to how meaning actually circulates, reproduces, and constrains communication in the everyday life of an organisation.

Semantics as a reservoir of meaning

In his paper “Luhmann and Organization Culture – A Systems Theoretical Analytical Strategy,” Tække offers a helpful language for the condition this work responds to.(1)

He defines semantics as:

“the meaning that words, sentences, and actions hold for organizational members”

He proposes that those meanings can be analysed to infer undecidable decision premises. Drawing on Luhmann, Tække describes culture as a reservoir of themes: meanings available from the past that can be brought into present communication, shaping which contributions are understandable, credible, and appropriate.

In ordinary conversation, we often dismiss debates by saying, “That’s just semantics.” But in a systems-theoretical sense, semantics is not superficial wordplay; it is the infrastructure of understanding.

Semantics determines whether an utterance makes sense to colleagues, whether it is taken seriously, or whether it is immediately discarded as noise. Condensed terms like agile, accountable, professional, risk, or urgent rarely carry dictionary definitions in an office. They are saturated with local, sedimented history. They act as shortcuts that pre-structure what kind of action is permitted to follow.

This reservoir is not an abstract cloud floating above the organisation. It is carried forward in how people communicate about their day-to-day work: what they justify, what they explain away, how they describe a success, and where they place blame when something falters.
The connection I am making is practical. If organisational culture is carried forward in the meanings through which people interpret experience, relate to one another, and make decisions, one way to surface aspects of that culture is by listening to both those experiences and the meanings attached to them in lived accounts.

Questions grounded in situational indicators

The challenge is that any invitation to communicate about taken-for-granted premises is itself contained and constrained by them. To talk openly about something foundational may already feel like a violation. It can be like asking for a reason for something “obvious,” where the act of asking is perceived as shameful, inappropriate, or not permitted.

Tække, drawing on Luhmann, describes how inquiry into established habits and assumptions can easily be counteracted as provocation, taken as disloyalty, or laughed off as a joke. He writes:

“Questions about culture must be specific and grounded in situational indicators.”

This is the methodological hinge. Rather than asking people what they believe about culture (which invites abstract theories, defensive postures, and rehearsed opinions), we can ask them to recount specific, lived episodes.

An opinion (“Leadership never listens to frontline staff”) invites disagreement, defensive counter-examples, or ideological debate. But a narrative account (“Last month, when the rollout stalled in regional depots, we submitted three incident reports, and the review meeting was cancelled before we reached the agenda”) provides a concrete situation. It describes what happened, what was communicated, and how choices were coordinated.

Rather than beginning with an abstract question about “our culture,” collecting concrete, situated accounts brings us back to lived experiences:

How a specific decision happened.
How someone interpreted an unexpected event.
Where responsibility was placed when a deadline was missed.
What was considered appropriate or out of line.
What happened the last time someone acted differently.

These accounts give us situational indicators. They make available the distinctions through which people describe organisational life: relevant or irrelevant, successful or problematic, responsible or irresponsible, initiative or overstepping.

Working with culture, in this sense, is connected to observing and working with evidence. Not evidence that proves we have definitively uncovered “the culture,” but evidence that grounds the questions we bring into conversation.

Observing how people observe (Second-order observation)

Accounts of lived experiences do not offer a complete explanation of organisational culture, and organisational patterns cannot be reduced to stories or semantics alone. They are one way an organisation can listen to how decisions, constraints, and possibilities are encountered in practice.

In that sense, listening to people’s experiences functions as second-order observation: observing how people observe. We are not merely asking what happened (first-order observation). We are asking:

How did what happened become meaningful to those involved?
What distinctions did they draw?
What possibilities did those distinctions open or close?

In systems theory, drawing a distinction is the primary cognitive and communicative act: to distinguish something is to draw a boundary, highlighting one side while leaving the other in the unmarked space. When someone recounts an event using the distinction “diligent execution versus reckless experimentation,” they are organising reality in a way that makes certain actions sensible and others blameworthy.

Another person describing the exact same event using the distinction “proactive problem-solving versus bureaucratic stalling” constructs an entirely different communicative landscape. Second-order observation does not referee which description is objectively true; it observes the distinctions themselves and what they make possible.

The narratives are evidence of how experiences are described and interpreted. The premises we infer from their patterns remain working hypotheses.

They may also point to structural conditions that need attention. A recurring story of people avoiding escalation, for example, may suggest an informal premise about competence or loyalty. It may also bring into view a workload problem, unclear decision rights, a history of punitive management, inadequate staffing, or a workflow that leaves no time for collaboration.

The narrative does not settle the explanation. It tells us where the organisation may need to look more carefully.

Crucially, second-order observation reminds us that the practitioner is not standing outside the system. When we gather, select, cluster, and frame narrative material, we are also drawing distinctions — being mindful if they are ours to draw. We are not neutral mirrors reflecting an objective reality; our own observations are part of the communicative web and must remain open to scrutiny and challenge.

Working with tensions, not unified cultures

There may not be one premise to discover. Different roles, teams, histories, and positions sustain competing meanings, and the contradictions between them are often more informative than any apparent consensus.

Imagine a collection of stories about asking for help: in some accounts, asking early is described as responsible, collaborative, and risk-aware. In other accounts, asking for help is treated as evidence that someone cannot do their job or is offloading duties onto others.

We can bring that tension into view without needing to decide which account represents the “real” culture.

Instead, the inquiry becomes situational:

When does asking become responsible, and when does it become exposing?
What changes with the person, the role, the situation, or who is listening?
What have people learned from the responses they received in the past?

The work is not to settle the meaning in advance, but to let the organisation examine how these competing meanings are organising everyday choices.

Where formal decisions and stated premises do not adequately explain recurring patterns, we have a place to inquire. Informal meanings and undecidable decision premises are likely at work.

Here lies a critical distinction between traditional consulting research that culminates in a report and an ongoing inquiry. An analytical report cannot change undecidable decision premises; at best, it becomes another formal artifact that the system routes around.
Narrative accounts and accompanying patterns are not the conclusion of an intervention. They are merely the raw material for collective reflection. This is clearly expressed in Participatory Narrative Inquiry (PNI),(2) where Cynthia Kurtz speaks not of definitive findings, but of a catalysis report: an artifact designed to catalyse sensemaking rather than deliver settled verdicts.

From observing patterns to hosting conversations

Having patterns at hand, and working with the hypotheses they suggest, can support conversations about future action and the affordances and constraints shaping it.

And when I say “can support,” that is deliberate. Naming a pattern does not mean the organisation can or will use it. Tække warns that culture remains largely implicit in organisational communication, and that attempts to articulate or integrate it explicitly into management can be counterproductive.

The movement from gathering narrative indicators to actually sitting with them in a room is where the core of the work lies. It is not only the narrative patterns, hypotheses, and suggested premises that matter, but the act of observing and making sense of them in conversation.

How do we bring these situational indicators back into the room without provoking the very defensive routines they describe? How do we contribute to an environment where an organisation can examine its own communicative habits without collapsing into blame, cynicism, or polite avoidance?

In the final article of this series, I turn to the craft of hosting reflexive spaces: what it means to hold the inquiry open and contain the anxiety that inevitably surfaces when established premises are brought into the light.

References

(1) Tække, Jesper. “Luhmann and Organization Culture: A Systems Theoretical Analytical Strategy.” Paper presented at the EURAM 2025 Annual Conference, University of Florence, Florence, Italy, June 22–25, 2025.

(2) Kurtz, Cynthia F. Working with Stories: In Your Community and Your Organization. 3rd ed. Kurtz-Fernhout Publishing, 2014. (See also workingwithstories.org).