Culture Matters – Big Time

“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 .  . .

John R Childress

E | john@johnrchildress.com      T | +44 207 584 3774      M | +44 7833 493 999

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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