“The thing I have learned at IBM is that culture is everything.” –Louis V. Gerstner, Jr. former CEO IBM
Last week I was invited to be a speaker at a meeting of nearly 200 executives of SME businesses hosted by the Royal Bank of Scotland Technology and Media team for London and the FD Unlimited Group. The topic was “Build it, Scale it, Keep it” and with me on the panel were Sharon Vosmek- CEO of Astia, a global organization specializing in funding entrepreneurs; Alastair Mills– former CEO of SpiriTel, a fast growth telecoms company; and Ian McCaig, former CEO of lastminute, Europe’s largest online travel and leisure business. Hosting the evening was Ian Mason, Client Relationship Director, Technology Media and Telecoms for RBS. As you can see, a distinguished and experienced group who understand what it takes to build, grow and keep a start-up business.
What surprised me at first is why they would chose an expert in corporate culture to sit in with these obviously highly focused business builders. Banks in my experience, at least in the past, haven’t given corporate culture much credence and I was definitely the odd-man in the group. We each spoke for about 15 minutes and then as a panel fielded questions.
To my surprise, culture and the importance of leadership and values came up time and time again throughout the evening both in the questions to the panel and also in the informal discussions over drinks at the end. The message that culture matters in all three phases; Buillding, Growing and Keeping, is becoming widely accepted.
My presentation focused on the vastly different cultures of Johnson&Johnson and British Petroleum and how they each responded to deaths associated with their products and the resulting global media attention and legal actions. The case of the Tylenol poisonings in Chicago in 1982 when 7 people died when a lunatic put cyanide into the capsules of the then leading pain reliever is now a case study in positively dealing with crisis. Because of its corporate culture based on the J&J Credo (a nearly 100 year old statement of the company values which puts the customer first and the shareholder last) executives at J&J were open, transparent and fast moving to get all Tylenol off the market and to make certain future products were tamper proof.
Contrast that to the recent 2010 BP Deepwater Horizon oil rig explosion where 11 people died and 17 injured. BP is definitely not an open culture and with values more focused on cost control and the shareholder, BP’s response and obviscation of information has been vilified in the press and blogs the world over. It is estimated they face a decade of lawsuits as people recover from BP’s apparent negligence, not to mention having to set aside $20 Billion for cleanup and recovery. Along the way the CEO was sacked. At Johnson&Johnson the then CEO, James Burke became a business hero for his openness and decisive leadership of the Tylenol crisis.
Culture matters, big time ($$ billions). But it also matters everyday in every organization, big or small, established or start-up. Culture matters to every person who works there, who supplies goods and services, who buys the products. And the fascinating thing about culture is, you have a culture whether you like it or not and whether you actively manage it or not.
If you spend as much time on corporate culture as you do on the balance sheet, you will run a very successful organization.
Tight Lines . . .
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