Corporate Culture as an IED

“The greatest producer of casualties on the battlefield in the 20th century was artillery, and my assessment is the IED is the artillery of the 21st century,”  ~Lt. Gen. Michael Barbero

An IED is an Improvised Explosive Device, or in simple terms, a bomb, sometimes detonated by remote control and other times with pressure from a vehicle or even a footfall.  They have become the weapon of choice for terrorists who are outgunned in a traditional fight but can kill and maim without engaging their enemy.  And they are inexpensive to build, but can cause great havoc to a traditional army.

I recently read a fascinating article with the title: The IED: The $30-Bombs That Cost The U.S. Billions.  Essentially, IEDs are cheap to make, can be done by almost anyone with just a little training, can be hidden from view to be almost invisible, and easily detonated with a cell phone or pressure sensor. A nearly invisible hazard that causes great damage.

Corporate Culture as an IED

After reading that article it dawned on me that corporate culture can be very much like an IED.  We all know that culture impacts business performance, either positively or negatively and a culture that is not in alignment with the strategy and goals of the company can actually derail otherwise excellent business initiatives.

Yet while most culture experts talk about values, the role of leadership shadows and try to measure the overall corporate culture, I believe they are missing a hugely important element of corporate culture.

Culture can be a significant business risk.

Just like an IED is a risk to people driving or walking along a road or shopping in a crowded marketplace, culture can be a risk to business performance and the well-being of employees at all levels.

Let me explain.  First of all, there is no such thing as an “overall corporate culture”.  Culture is not one unified thing, but instead a collection of subcultures, many of which have strong group beliefs about work, the business, management and their jobs.

Subcultures exist in all organizations and are a result of both peer pressure to fit in with the group (team, department, etc.) and the very real human need to belong to a group.  And the importance of belonging to a defined group is hard-wired into our DNA from our early ancestors.  Individuals couldn’t survive alone, so being accepted into a tribe meant survival.  And the way to be accepted was to blend in, not stand out. To accept the norms of behaviour peculiar to that tribe. And those tribal behaviours were then reinforced by peer pressure. So when a new employee enters the workplace for the first time, they have an innate need to fit in, to belong to a group, to be accepted.

And in every subculture there is an informal leader who either by force of personality or experience or wisdom is trusted and respected and tends to set the basic ground-rules and beliefs of the group. He or she may be the lead engineer with the most experience, the head nurse, the Master Sergeant, or the person who has been in the company the longest and has the most insight into how to survive in the job.  Rarely are the informal leaders on the radar screen of HR as a key influencer or high potential, yet they have as much or more power over how things get done as any senior executive, probably more.

And this is how culture can become an IED.  When a subculture is not aligned with the overall business values or strategy, it can easily block a new change initiative or business improvement attempt.  And there are times when the subculture becomes an even greater risk to the business.

Think about the subcultures of greed and fraud within investment banking that led to the global economic crisis of 2009.  Or more recently the subculture within Volkswagen of a group of engineers and managers falsifying emissions data and unleashing a PR and financial disaster for the company.  Or the 5-years of opening over a million fraudulent bank accounts by Wells Fargo for customers who didn’t exist in the effort to satisfy the subculture pressures of the sales and marketing department.  And a subculture can even be lethal, as we have seen in the explosion of the Deepwater Horizon Oil Rig in the Gulf of Mexico and the death of 11 workers, caused by a subculture of pressure to make schedule and reduce costs that led to excessively risky decisions.

Keep Your Eyes Peeled

The best defense against harmful IEDs in a war zone are the eyes of the soldiers, keeping a lookout for the telltale signs of roadside bombs.  I am encouraging senior managers to look for the subcultures that exist within their organizations, to identify the informal leaders, to work with them to align the subculture with the overall values and strategy of the company.

And The Biggest Risk?

But the biggest risk is not the subcultures themselves, but the fact that in most companies senior executives and leaders don’t know where the subculture are and how they are influencing, either positively or negatively, company performance and employee engagement!

 You get the culture you ignore, just as you get the culture you actively create.

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,

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

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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