Culture Questions I Am Often Asked . . .

questoins

I am often asked by senior executives various questions concerning corporate culture. This past week was no exception when I spoke to a group of risk professionals and regulators from the Australian banking and financial services sector.  The conference title was Culture and Conduct in Financial Services and held in Sydney and sponsored by Criterion Conferences.

Even though the Australian banking sector is beginning to see cases of excessive risk, greed and even fraud, due to a strong and engaged regulatory sector and a national culture of “doing the right thing”, they have not been plagued with the excessive fraud and greed evident in the US and UK banking sector. So Far!  But everyone is concerned, and the risk professionals in the room this week are taking culture and risk conduct very seriously.

As the only non-banker and financial services professional at the conference, my keynote address focused on helping the group gain insight into the deeper aspects of corporate culture and importantly, the key principles that drive and sustain culture, and the most effective levers for reshaping culture.

At the end of my talk there was some time for Q&A and these are they kinds of questions that came up.

Does it really take 5+ years to change culture?  Yes, if you do it piecemeal and don’t really understand what drives your culture and how culture “works” inside your organization.  With a good understanding of the principles and drivers of culture, plus courageous and determined leadership at the top, real change in “how things are done around here” can take a year or less.

I know this statement goes against the traditional wisdom found in most books about culture and from most of the big consulting firms, but there is plenty of evidence, in some very large companies, that real sustainable culture change can be accomplished quite quickly.  I didn’t say easily, but time is not the enemy in culture change, lack of understanding about how culture works is!  Read the case study of the dramatic culture shift at the NUMMI auto plant joint venture between GM and Toyota and you will see one of the key principles of culture in action: systems and work practices are the strongest drivers of employee behaviour and culture .  The same principle, as well as the importance of leaders “really leading” the new culture is shown in the dramatic turnaround of Continental Airlines between 1994-1995.

Over my 35 years of studying corporate culture and consulting with senior executive teams, I now have a pretty long list of speedy culture change examples.

Is there one corporate culture inside a company?   My response to this very important question is: almost never!  Unless you are one of those companies which makes culture a strategic business priority (like Zappos.com, Johnson&Johnson and Netflix) and manage it as closely as you manage the P&L, more often than not, your organization is a collection of strong subcultures.  In fact, all companies of any size quickly break up into strong subcultures as a result of a key culture principle: culture works on human logic, not business logic.

Because we are a highly social species, employees want to fit in and be accepted as part of the group, team, etc.  And in all companies there are teams that work together and depend on each other for recognition and support as well as getting the work done. And each of these subcultures has at least one “highly influential leader” that others trust and respect, and it may not be the formal boss. Employees take their clue on how to behave, what to believe about the company and management, and how things get done from the informal leader, which is further reinforced by peer pressure.

If you really want to understand your corporate culture and how it influences business work and performance, then you need to find the various subcultures and learn about their beliefs and practices. Hopefully they will be aligned with your overall vision, strategy, ethics and values, but don’t be surprised if they are not.  After all, most companies spend very little time and effort on cultural indoctrination and culture alignment.

subcultures

And be aware of culture surveys that give you a company culture picture or scores.  There is no such thing as an overall corporate culture.

In my next few blogs I will respond to more of the “typical” questions relating to corporate culture. But for now, take some time to think on these 5 key Principles of Corporate Culture.

5-principles

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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