What Drives Corporate Culture?

As you grow older, you learn a few things. One of them is to actually take the time you’ve allotted for vacation.  ~John Battelle

Summer time is vacation time. Yippee! A time to recharge the batteries, break a few non-healthy habits and reconnect with your family, friends and dreams. And it’s amazing how effective at “attitude adjustment” a holiday can be. In my experience one week is not quite enough; two full weeks and even three are required to get the job done. At the end of a good holiday we return refreshed and revitalized. And even if your holiday was physically taxing and your body is tired, we still return to work with a refreshed attitude and outlook.

So what is it about a holiday that is so refreshing?

One of the big reasons is that we “change our scenery”.  That is, we go someplace where many things are different from our normal environment. The air is different, routines are different, the food is different, clothes are different, our day-to-day activities are different.

And herein lies a key principle in understanding what creates and drives corporate culture!

The “work environment” has a greater impact on creating, driving and sustaining corporate culture than the academics and psychologists realise. These day-to-day external influences are what I call the “driving and sustaining” factors of corporate culture.

If we define corporate culture as

“the unique combination of behaviours, beliefs, assumptions and business processes (formal and informal) that over time have become the “habitual” approach management and employees use in solving business problems and interacting with each other, customers, clients and suppliers”,

it becomes easier to understand the powerful role the “internal work environment” has on shaping and sustaining corporate culture.

Here’s an example. For nearly 10 years from 1984 to 1994 Continental Airlines went steadily down hill in all airline performance indicators, finally winding up at the bottom in on-time arrivals, lost luggage and customer satisfaction. With two bankruptcies along the way. Employees hated the company so much that they would remove their logo badges when walking through the airport terminals or going to the grocery store. Anything to avoid being seen as a part of the “worst airline in the world”.

Why? The internal work environment was oppressive and negative, which was a result of a maniacal focus on cost control and spending by senior management. The manual telling check-in staff all the rules about charging for ticket changes and putting the company finances before customer service was 4 inches thick!  Every management meeting was focused on costs and how to control costs and reduce spending.

220px-GordonBethuneFromWorstToFirstBookThen Gordon Bethune took over as CEO and changed the work environment. He had a ceremonial burning of the rule book in the headquarters parking lot in Houston so that all employees could see that the new game was “trust employees to do the right thing for customers and the company”. With the onerous rules and policies changed, employee behaviour and attitudes changed! Other policy and work environment changes helped bring back pride and personal accountability.  A new policy of monthly cash bonuses for all employees when the company improved its on-time arrivals, lost luggage and customer satisfaction scores rejuvenated employee attitudes and performance.  Bethune even opened up the executive offices where once locked doors symbolised a barrier between employees and management.

Alan-MulallyWhen Alan Mulally and the senior team of Ford Motor Company engineered a stunning turnaround, they did it not with motivational training or culture workshops, but by revising old internal work policies that had been created by the finance function to control costs and reduce risk. In the old Ford culture finance ruled the business and cost control was seen as the way to success.

Mulally shifted the internal work policies to enhance the importance of design and the “voice of the customer” in producing cars that people “wanter to buy” instead of cars that were inexpensive to manufacture. The new policies of One Ford also helped to break down the internal competition that earlier existed between divisions and regions. He even went so far as to change the senior compensation policy to focus totally on company performance instead of department or division performance.

Learn What Really Drives Your Corporate Culture

Instead of listening to the “culture gurus” about behaviour and attitudes and the need to define a new set of culture behaviours and competencies, take a hard look at the internal work policies that are really driving employee behaviour. You will quickly learn which company policies are driving behaviours that are counter to the culture you need to deliver your business strategies.

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,  Business Books Website

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

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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One Response to What Drives Corporate Culture?

  1. Pingback: The Focus of Culture Change is not Culture | John R Childress . . . Rethinking

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