Where is Your Corporate Culture Located?

street lightSeek and ye shall find, but only if you are looking in the right place!

A policeman was walking along a dimly lit street at night and noticed a man on hands and knees near the lamp post.  The man was obviously searching for something.  “What are you looking for?” asked the cop.  “My car keys. I seem to have lost them.”  “Are you certain you dropped them here?”  “No, but this is the only place that has any light!”

Ever since the publication of the global best seller, In Search of Excellence, by Tom Peters and Bob Waterman in 1984, academics, consultants and HR executives have been focused on corporate culture.  Hundreds of articles and books focus on defining, explaining, measuring, assessing, comparing, reshaping and changing corporate culture. With all that research and intellectual horsepower it seems only logical that the concept of corporate culture would be clear and simple to understand.

Alas, that is far from the case.  In fact there is not even an agreed upon definition of corporate culture and there are over 70 different culture assessment tools available, all purporting to have the definitive answer! And every day the business news has another article about corporate culture.  Most recently the focus has been on the “broken culture” of global banking and the “poor customer service culture” of RyanAir.

We know culture matters! We know culture impacts performance. We know leaders influence the culture.  We know peer pressure and the human social need to “fit in” mould and sustain corporate culture.

But just where is corporate culture?  Where does it reside inside the company? In a department or function? In work behaviours? In beliefs and corporate values?

Corporate Culture is Heard, Not Seen!

The classic answer is that corporate culture resides in the habitual and characteristic work behaviours of employees at all levels which they use to solve business challenges, interact with each other and customers. But cataloguing all the work behaviours that happen inside a company and determining which ones are cultural drivers is a monumental task.  Some may be major drivers, others minor, and some not cultural drivers at all.

Another place to look is in Values Surveys, where employees rate their own values versus that values espoused by the company.  Again this have proven to be a very weak indicator of corporate culture, since that same value, say “integrity” can have very different interpretations by different individuals inside the same company. And since many of our workplaces are highly diverse, with employees from many different ethnic and social backgrounds, it is easy to have different interpretations of the same value word.

Maybe we should be looking away from the lamp post!

water_cooler_conversationIt has been my experience that one of the strongest drivers of corporate culture, and actually a key place to really find your corporate culture, is in the informal stories told by employees around “the water cooler”.

Every culture has a set of stories that contain the “informal culture rules” about what is important, what is accepted, and how to win and fit in. It’s the company folk-lore and a powerful driver of corporate culture.

The stories may be about how the original founder went out of his way to help a customer. There may be a story of what happened to an employee who disagreed with his boss! There are numerous stories, which seem to circulate and recirculate, about what it’s like to work here, how to get ahead and how to keep your job! And these stories are told whenever and wherever employees gather where they feel “safe”. It could be at the canteen, around the water cooler, in the bar after work, at a weekend gathering of friends who work together.

If you listen, you will find your corporate culture. The real question is, do you like what you hear?

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Acculturation . . . Assimilation or Annihilation?

Borg Queen

We are the Borg. Resistance is futile. You will be assimilated. We will add your biological and technological distinctiveness to our own.  ~ The Borg Queen from Star Trek

 One of the more fascinating and dangerous encounters by Captain Picard and the crew of the Starship Enterprise was with an alien collective called The Borg. The Borg functioned as an all-knowing and all-powerful collective. The Borg force other species into their collective and connect them to the ‘hive mind’; the act is called assimilation and entails violence, abductions, and injections of microscopic machines called ‘nanoprobes’. The Borg’s ultimate goal through assimilation is ‘achieving perfection’.

The Star Trek episodes dealing with The Borg are intriguing and I always walk away with a deeper appreciation of modern business and how corporate cultures are developed. The assimilation analogies are sharply similar. The major difference being you can’t resign or quit from the Borg, and you don’t get fired, you get annihilated!

Very little is written in the vast popular or academic literature of corporate culture about two of the strongest determinants of culture: peer pressure and the human social need to fit in. In my experience, these are extremely powerful, and yet frequently overlooked and under appreciated forces in the development of a company culture.

The Human Need to Fit In:

Here’s the basis for how people easily become acculturated. A psychologist, Dr. Leann Birch, placed a young preschooler who hated peas (me too!) at a lunch table with three other preschoolers, all of whom loved peas. After just four days the pea-hater became a willing pea-eater, without any teacher or parental urging. And the new habit stuck.

Human beings are hard-wired to fit in!

Studies have shown that employees who work for the same corporation, no matter what their jobs, are 30% more likely to exhibit similar behaviours – defined as the way a person learns, deduces, envisions, engages, and executes – than people who do the same job but who work in different companies.

That is true even if the people from different companies work in the same industry or region. Consider, for example, an American engineer employed by Honda. The fact that she works for Honda tells you more about her behavioural work habits than the fact that she is an engineer or that she labours in the auto industry or that she is American. What’s more, her ways of working will probably more closely resemble those of a Japanese purchasing manager at Honda than those of an American engineer at Ford.

In his insightful writings on organisational dynamics and behaviour, former psychiatrist turned management advisor and business author Dr. Leandro Herrero is one of the few who point to the strength of peer pressure and the human need to fit in as critical components of corporate culture and the business change process. By understanding how these two forces operate inside organisations, Herrero has come up with a radical and highly effective approach to large-scale organisation transformation and culture change.  His recent books Homo Imitans and Viral Change™ are rapidly becoming classics among business leaders faced with the need for organisation change.

Peer Pressure is Subtle and Rarely Coercive

CultureCartoonStories told by senior employees or supervisors to new employees about how to fit in and survive inside the company are far more powerful than the written policies in any handbook, and are certainly more powerful than printed culture statements.

Stories stick because they help people fit in, which is one of the most critical requirements for a new employee. It takes a strong and self-assured individual to choose not to fit in with the group. Most employees who don’t or won’t fit in are literally ‘spat out by the culture’ and often leave after a few weeks.

Fortunately, Captain Picard was able to escape before he was fully assimilated!  Most employees are not so lucky!

Picard

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Admiral Rickover and The Responsibility of Leadership

(Note:  This is a blog I published over 2 years ago, but the message needs repeating, at least to me!)

“Good ideas are not adopted automatically. They must be driven into practice with courageous impatience. Once implemented they can be easily overturned or subverted through apathy or lack of follow-up, so a continuous effort is required.                        — Admiral Hyman G. Rickover

Admiral Hyman Rickover was considered the father of the nuclear Navy and, as described by his officers and others, a man obsessed with leadership and responsibility.  In the Admiral’s view of the world, leadership and responsibility were synonymous and he preached his mantra everywhere he went.

“Responsibility is a unique concept: it can only reside and inhere in a single individual.  You may share it with others, but your portion is not diminished.  You may delegate it, but it is still with you.  Even if you do not recognize it or admit its presence, you cannot escape it.  If responsibility is rightfully yours, no evasion, or ignorance or passing the blame can shift the burden to someone else.  Unless you can point your finger at the man who is responsible when something goes wrong, then you have never had anyone really responsible.”                                                     – Admiral Hyman Rickover

I never had the pleasure of meeting the Admiral, but I worked closely alongside several of his officers and civilian staff in the early 1980’s.  It was during this time that I came to understand the power of individual responsibility and how it can change the course of destiny and improve organisations.

Most people my age remember the 1979 Three Mile Island Nuclear accident.  At the time it was the second most publicised media event in US history, next to the JFK assassination.  For months on end the press treated the public to story after story and accusation after accusation on who was to blame, the “danger”caused, and the clean-up efforts.

It just so happened that in 1982 I was hired as a young consultant (okay, not so young!) to assist the new CEO of General Public Utilities Nuclear Corporation (the organisation responsible for all the GPU Nuclear assets), Philip Clark, in developing a leadership and culture change program to build a “culture of safety” at Three Mile Island.  Phil Clark was  a veteran of the Nuclear Navy Reactor program and a student of Admiral Rickover.  And in building his new management team to take on the containment of the damaged TMI Unit 2 Reactor and the successful restart of the undamaged Unit 1, he chose others from Rickover’s Nuclear Navy.  It was definitely the A-Team and I was proud to be associated with them.

And together we learned a great deal.  From me they learned about the power of corporate culture and the “shadow of the leader” concept, as well as the importance of team building, even for highly technical nuclear engineers who didn’t want anything to do with “charm school”!  But I think I got the better part of the deal, from them I learned the Rickover philosophy of responsibility and accountability.

If everyone is accountable, no one is accountable.

 Thanks to the efforts and vision of Phil Clark and his leadership team, TMI Unit 1 is one of the safest and most productive nuclear power plants in the world, constantly setting records for continuous production and safety.  Also, the damaged TMI Unit 2 has been successfully decommissioned and its damaged fuel cells safely contained.

Today in my work with CEOs on turnarounds and strategy execution, the lessons of Three  Mile Island are always forefront in my workshops, trainings, coaching and advisory work.

If you could kick the person in the pants responsible for most of your trouble, you wouldn’t sit for a month.   -Theodore Roosevelt

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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The Leadership of Corporate Culture

signs-its-time-unfollow

Real leadership is about influence, not a title or position!

Dr. Larry Senn wrote his PhD dissertation at UCLA in 1970 on a breakthrough concept in business and organisation behaviour. The title was “Organizational Character as a Tool in the Analysis of Business Organizations” and it essentially set forth the principle that organisations, like people, tend to have a character style, or personality which in many ways determines the way they behave.

Some people have a more reserved and formal personality while others are more informal and outgoing.  Some people are risk averse while others are daring and always pushing the envelope.  Different personalities lead to different ways of behaving.  And according to Larry’s research, we now know that organisations have different personalities which show up in how their employees behave with each other, with customers, and how they react to business challenges and change.  This insight paved the way for the now classical concept of corporate culture (think of corporate culture as the “personality” of the organisation).

Larry and I met in 1978 and co-founded the Senn-Delaney Leadership Consulting Group to focus on helping CEOs and senior teams understand and shape their corporate culture in order to improve performance.  One of the concepts we used heavily in our work with senior teams was the principle that “organisations are shadows of their leaders”.

Leadership Shadows

In other words, the collective and routine behaviours of the senior team heavily influence how the entire workforce behaves. In essence, employees take their cues on what is acceptable and what is not by watching the actions and behaviour of their senior leaders, and since people in organisations have a great need to belong and fit in, they tend to adopt the behavioural traits of the senior executives.

Thus the behaviours of the leadership has a significant impact on establishing the corporate culture. An aligned senior team creates an aligned and high-performance culture while a senior team that has significant infighting and lack of alignment creates a fractionated and less effective corporate culture.

New Insight on Who Shapes Corporate Culture

While most culture consultants use the “shadow of the leader concept” to focus exclusively on the senior leadership team dynamics in order to design culture change programmes, they usually miss asking the very important question:

Just who are the individuals that influence the culture?

The common assumption is the members of senior leadership team. But we all know about the danger of assumptions.

Since I retired from Senn-Delaney in 2000 after 23 years as CEO, I have discovered some important new insights about the shadow of the leader concept:

The senior leadership team has less of an impact on shaping and sustaining corporate culture than previously thought!

While the founders and senior team influence the culture of an organisation in the early start-up days, as the organisation grows in size and ages, formal leaders have less and less influence on the corporate culture.  Employees tend to trust and respect the “informal leaders” more than senior executives or senior managers!  And the social peer pressure to conform to the group or subgroup norms become the dominant shaper of culture.

Leadership influence

Studies show that people tend to role model and pattern their behaviour after those whom they admire, trust and respect. Peer pressure and social influence is extremely powerful and can be seen in the growth of fads in everything from fashion to gang membership.

I was in college in the 1960’s during the Free Speech – Hippie movement. No one passed a policy or law that it was cool to grow long hair, wear flowery bell bottom trousers and protest against the war. It all happened through peer pressure and the influence of trusted and respected peers and admired individuals. And the same patterns of informal leaders and influence are true inside organisations.

Fortunately today we have sophisticated analytical tools that can clearly show who are the informal leaders and even quantify that informal leaders have significantly more social connections and influence than senior management.  And are more trusted!

All this new insight and data adds to our ability to help senior leadership reshape corporate culture to better match strategy and improve performance. It’s no longer just about the senior team. Leadership resides in many more places and there are multiple tools for culture change available (see LEVERAGE: The CEO’s Guide to Corporate Culture by John R Childress, and  Viral Change, by Dr. Leandro Herrero)

The sad fact is, most senior leaders have no clue as to who are the informal leaders and key influencers of the corporate culture.

We all have work to do if we want to improve organisational performance and the workplace environment.

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Too Busy to Improve?

speed-up-your-website

In this age of speeded up communications, travel, work and life, faster is not always the answer.

Several years ago I commissioned a cartoonist by the name of Rupert Besley to illustrate a concept for me.  The concept deals with the insidious human condition of using busyness as a reason (dare we say “excuse”) for not listening to new and potentially useful ideas or taking the time to learn new skills.

woman-on-hamster-wheelHow many times have you heard a business executive say something like; “I don’t have time to listen to a new idea, I’ve got too much on my plate right now” (or “I’m behind on a major project” or “I’ve got to get this presentation ready for next week’s meeting!”).  A friend of mine once described life in business as either “being busy” or the “illusion of being busy”.  It is very easy to get caught up in busyness and not even realise that, like the hamster on the wheel, there’s lots of activity but very little progress.

Slow Down to Go Fast!

A friend of mine tells a story about the time he worked as a firefighter in the Oregon forests as a summer job.  He was assigned to an experienced crew chief and they were driven to the location of a large forest fire in the mountains.  Rather than breaking out the shovels and axes and getting straight at the job of fighting the fire, the wise old crew chief told his team to grab their lunch sacks and sit down for a few minutes.

My friend questioned the logic of stalling while the fire was raging.  The crew chief asked them to slow down for a few minutes to observe the fire. Which way was the wind blowing? How fast was the fire moving? Were there any natural barriers they could use to divert the fire? Where was the best place to build a fire break?  None of these critical questions had crossed my friend’s mind since he was focused on action, not effective strategy.  To this day he says it was one of the most useful lessons he ever learned and he applies it nearly every day in running his business.

I often send this cartoon attached to an introductory letter when I would like to talk to a busy CEO about corporate culture, culture change and strategy execution.  Everyone knows that culture is important and culture impacts performance, but few know the real levers and tools for effective and sustainable culture change.  And besides, now’s not a good time . . . . Hence the cartoon.

Enjoy.

salesman

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Always volunteer for the worst assignments

90% of the time, if you volunteer, you’re gonna be stuck doing some sh*tty job. But every now and then when you volunteer for something, it’s actually gonna be something pretty awesome that you’ll be glad you had volunteered for.   ~Junior Navy Officer

One of my business partners, Christiane Wuillamie, has just been appointed as a Visiting Senior Professor in Entrepreneurship at a university in England.  It’s a big title, but then she is the perfect person for the role.  A self-made business woman who started a small IT Services and Consulting firm in 1994 in the City of London servicing the IT needs of large banks and financial services companies.  In 1999 she was a finalist in the London Business Woman of the Year awards, having grown her company 100% year on year and accumulating dozens of top company awards.

Anyway, she is giving a class in a couple of weeks at the university.  Her topic:  Everyone an Entrepreneur.  And one of her main points to the young students she will be interacting with is “always volunteer for the worst assignments”.  As you follow her career from Vietnam refugee to entry-level programmer to the youngest head of IT in a major UK bank to a top IT trouble-shooter and turnaround specialist, she claims that her rapid rise up the business ladder and her self-confidence to solve any problem came from volunteering for the toughest work assignments.

Nothing becomes great without great resistance!
~William Penn Patrick

Experience is the best teacher

Her logic on this point is impeccable.  It’s the toughest assignments where you learn the most; about yourself, other people, human dynamics, creativity, and of course, leadership skills.  The reason few volunteer for tough assignments is it’s hard work, and they don’t really understand the value that can come from tough assignments.  Her second point is that those who take on the tough assignments get noticed by upper management.  The volunteer is not always successful, but the fact they are willing to take up the challenge is not overlooked by senior management.  Who would you rather promote, the average person who plays it safe or the warrior who engages a challenge head on?

In a previous blog I wrote about one of my most influential mentors, Thomas D. Willhite.  Tom was always pushing us to try new things, take on new and difficult challenges.  He taught us to ride dirt bikes, he got us to give personal development seminars for inmates in the Hawaii State Prison, he built his own single-engine stunt airplane.  Challenges for him were an opportunity to grow.  Whenever he would come to us and say, “Wanna’ grow?”, we always new that something tough was coming up.  We swallowed hard, grinned, and said yes.  As a result, we learned a lot and grew as leaders.

Psst!  Wanna’ grow?

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

 

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Who “Owns” Corporate Culture?

pointing-fingers

If everyone is accountable, then no one is accountable.

When organisations and companies first evolved, it was the founder who tended to be responsible for just about everything, from visiting the factory floor and telling people what to do, visiting the bankers and money lenders, and everything in between. Companies were smaller then and life definitely less complex and the pace of business much slower.  Mail used to travel by foot, horse or sailing ship and instructions sometimes took days to months to reach the intended person, who would then be tasked with carrying out the orders of the owner.

As business evolved it adopted the military model of “chain of command” and defined responsibilities, thus ushering in a new era of efficiency and growth (however without the discipline and values!). The industrial revolution, modern accounting and technology advances joined with the scientific management techniques of Frederick Taylor, and businesses flourished, bringing with it societal advances in just about every area. And inside these now large organisations, division of responsibilities allowed for even more efficiency.  No longer did management have to “know everything” about the business, instead they could concentrate on being effective in their respective areas of expertise. We now have defined functional responsibilities making up the senior management roles; Manufacturing, Supply Chain, Finance, Engineering, Marketing, Communications, HR, Risk, Sales, etc.

Who “owns” the corporate culture?

In my keynote speeches to executive audiences I often start by asking the simple question: “Who owns your corporate culture?”

The obvious and quickest response to this question is everyone!  Culture is everyone’s company-culture-300x282responsibility!  In one sense, this is the right answer, but it is also politically naive and wholly ineffective. While everyone inside the company has a personal responsibility to behave in accordance with the internal values and comply with policies and procedures, culture is much more than just the sum of individual behaviours. And when poor behaviour happens, very few employees believe they have the authority or mandate to correct and coach their peers or their bosses on behaviour.

Those few who truly understand corporate culture and its impact on performance realise that internal policies, such as compensation and promotion, tend to be strongest drivers of behaviour and thus the corporate culture.  The current policies inside many banks today foster individual risk/reward behaviours that can easily go astray, creating significant ethical issues with massive economic and financial repercussions.

The next answer I get to this question is usually, well then, the CEO is responsible for the culture.  After all, they have the power to alter policies and remove people who are consistently out of alignment with the desired culture.

If only it were that simple. First of all the life of a modern CEO is stuffed with both internal and external meetings of an operational, strategic and regulatory nature.  If they do have time to think about the corporate culture, it’s usually after everyone else has gone to bed and then only for a short time. And the analysts and shareholders don’t care about the culture, they want earnings and profit.

The third response comes quickly. Then the senior team should be responsible for the Shadow leadersculture.  After all, many culture gurus claim that “organisations are shadows of their leaders“. That is, the collective and individual behaviour of the senior executives tend to signal to all employees what is acceptable and what is not. Ideally, this is true, but the fact is most senior executives are more focused on their functional responsibilities, budgets and numbers, than on the overall culture. Besides, rarely does corporate culture factor in their personal compensation or functional scorecard.

By now the room grows silent until someone pipes up; “Shouldn’t it be HR or Corporate Communications responsibility?”  After all, this is where it usually lies inside most companies. In many companies, HR and or Corporate Communication are tasked by the CEO to look after people and “the culture”. This does make sense since everyone believes culture is all about people, employee engagement and the communication of corporate values to all employees. Sounds good, but doesn’t really work very well.

First of all, HR has mostly devolved into an administrative function, focusing on employee records, training, pension and health plans, compensation and grievances. And Corporate Communications knows how to craft and spin big messages and use social media to promote the firm and its brand. While they can touch all employees, these two functions rarely understand the real business of the business nor do they understand the fact that corporate culture is a business issue more than it is a people issue.

And traditional HR and Comms approaches to culture rely heavily on workshops, lectures, training sessions, team building activities, top-down values communications, videos on the culture and road shows of executives with hundreds of Powerpoint slides. Interesting and important material, but totally ineffective at shaping or changing culture.

A New “Home” for Corporate Culture?

Risk is not knowing what you are doing.  ~Warren Buffett

Risk is not knowing what your culture is doing.

I have a rather radical suggestion about who should have responsibility for corporate culture. I believe the accountability for building and dealing with corporate culture should lie with the Head of Risk and within the Risk function. Of course all the others above play their part and everyone needs to be personally responsible for the culture, but let’s look at the value of having the Risk function “own” corporate culture.

riskWhat most people don’t understand is that corporate culture can be a significant business risk. Just ask the banks who have been fined billions of dollars for unethical behaviour resulting from a broken culture.  Just ask the people of the US Gulf states about the environmental and economic damage caused by a poor safety culture on the BP Deepwater Horizon oil drilling platform. Talk to the shareholders of Daimler/Chrysler a few years after the much touted “marriage of equals” merger whose share value dropped in half in just a few years due to culture clash.

Why put the care of corporate culture into the Risk function? Because this group is highly concerned with business outcomes as well as behaviours and activities.The Head of Risk has the critical role of discovering and preventing unnecessary and harmful risk activities, policies and decisions inside a company, while at the same time promoting and supporting good asset utilisation and good business practices. And a good risk function is also proactive in identifying and mitigating risk, wherever it lies inside a company.

And there is also a growing precedent for combining culture with risk. Santander UK, whose new CEO came from the risk function of another bank, has put culture and risk together under the leadership of a senior executive. Now culture becomes a real business issue!

Think about it!

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

 

 

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