“Culture” has been in the
business news again lately, from General Motors’ failure to recall its faulty
ignition switches to the replacement of an outsider for Target’s new CEO. Those of us who have worked for more than one
company, and/or have friends and acquaintances who work for different
companies, know how powerful corporate culture can be.
We all know that companies,
like all social groupings, tend to form cultures that influence the way its
employees think, feel and perceive what is going on. When I worked for Citibank many years ago, I
would compare notes with a colleague who worked for what was then called the
Chase Manhattan Bank on how different our respective company cultures
were. Citibank was then brash, and its
employees were expected to be aggressive, and even rude. Chase Manhattan was more polite, and
employees were expected to behave more gently.
As we know, cultural fit is important to corporate survival. Many companies assess cultural fit before
hiring managers, and many executives de-rail not because they lack technical
expertise but because they lack this cultural fit.
Executives in successful
companies, recognizing the importance of culture, try to shape their company’s
culture to be aligned with the company’s strategy. For example, Wal-Mart instills an almost
obsessive regard for expense management that is in keeping with its strategy to
be the low-cost provider and remain profitable through its “everyday low
pricing” business model.
As Lane et al. point out,
culture is important because it serves two functions. One, it helps efficiency. Everyone in the company is expected to know
that there is a way of doing things (companies even label these, such as “The
Wal-Mart Way” and “The Toyota Way”) and once employees learn this, the company
can operate more efficiently. What is
interesting is that many of these so-called norms are not necessarily written
down or documented. But once we learn
the cultural code, many things don’t have to be spelled out. We know that is the way things are done and
violating this cultural code can have consequences. I remember a company I was involved with
where decisions had to be made by consensus.
An executive hired from the outside felt that this was not good for a
company that was trying to be more agile and so he started to make decisions
without going through the usual channels.
There was so much resistance to his attempts that he only lasted a year
with the company.
The second function of culture,
according to Lane et al., is that is provides an important source of social
identity for its members. Culture serves
as a kind of psychological “glue”; the stronger the culture, the stickier the glue. Belonging to a group not only provides some
security; it also increases our identification and commitment with the group
(or company). Creating a strong culture
is especially important for global organizations with subsidiaries in dozens of
different countries. Expatriates from
these organizations who go overseas not only provide technical expertise but
also serve as cultural ambassadors. I
have seldom seen expatriates being sent overseas who have either just joined
their company or are not able to “represent” the company in a positive
way. Strong identification with the
company also reduces turnover, and enhances the feeling of pride an employee
has in working for the company.
Changing a culture as powerful
as GM’s will be an uphill battle but it can be done. There have been successful attempts at cultural
change in companies like GE, Ford, IBM, Nissan and many other companies. I have been involved with a few companies
where the culture changed successfully although in all cases, it took time – as
much as five years.
In brief, what does it
take? Corporate culture, in my opinion,
is shaped by three sets of forces, and so understanding these forces and using
them to help drive change is a good first step.
In my opinion, these three forces are self-reinforcing and
interdependent; implementing changes in one without taking into account the
others will not work. The first force is
leader behavior. Nothing speaks louder
to employees than how leaders behave (not what they say should be done). When Carlos Ghosn of Renault went to Japan to
head Nissan, he made it a point to walk around the plant floors and introduced
himself to shocked groups of employees.
When CEO John Reed championed Six Sigma at Citibank, he himself went
through the training and taught some of the training workshops to employees.
The second set of forces
involves the company’s processes and systems.
This is where the rubber hits the road, in the day-to-day activities
that shape employees’ behaviors. In my
experience, the most important of these include decision-making processes, how
conflicts are resolved, and how employees are recognized and rewarded. Changing these processes and systems will
begin to create changes in the culture.
The third involves the
company’s structure. Microsoft recently
restructured its organization to break down silos. Many companies such as Cisco, P&G and IBM
have moved to a more matrix-type structure.
Unfortunately, many companies start and stop with structure. For example, GM has recently announced that
it would have a head of Global Compliance.
If people still perceive that they will be punished for speaking up,
then having an executive accountable for compliance practice alone is not
likely to change the culture.
Given all this, here are three
takeaways on corporate culture for managers and leaers. First, unless you are near the top of the
company’s hierarchical food chain, it will be impossible for you to change
corporate culture. In fact, even
executives at higher levels sometimes find it difficult to change culture by
themselves. Think about living in
another country with different cultural values and norms than your own; you
have to adjust your behavior to the country’s cultural code. Similarly, you have to adapt your behavior so
it somehow fits in with the culture of the company you are working for. Of course, you can deviate a bit but too much
deviance and you will be rejected.
Second, by understanding the
company’s cultural code, you can use culture to your advantage especially when
trying to lead and influence. For
example, one of the companies I used to work for had a strong bias for being
data-driven. That is to say,
recommendations or decisions had to be based on arguments based on analyses and
good data. In this organization, arguing
by appealing to emotion would not get you very far. Knowing this, those who were effective in
this company made sure that they persuaded their key managers by always having
solid data to back up their arguments.
Third, you can create your own
“mini-culture” within the larger corporate culture, as long as this is not too
deviant. Countries have national
cultures, but they also have regional and even local cultures. The southern United States can feel quite
different than the eastern United States.
Let’s say that you are a manager of a customer service team in your
company. You have strong beliefs about
how customers should be treated that may not be as much of a priority to the
larger organization. Within your sphere
of influence, you can build a strong sense of customer service. How?
Start by getting your manager’s buy-in and support. Have a compelling vision that you can
communicate to him or her, as well as to your team. Then get your team involved and excited to
make sure that they share and internalize the vision – it becomes not just your
vision but everyone’s. Then walk the
talk. Recognize team members who
exemplify great customer service. Spend
time with customers yourself, and act on their suggestions and complaints. You need not be merely a victim or product
of the corporate culture.
Lane,
H. et al. (2009). International
Management Behavior (Sixth Edition).
United Kingdom: Wiley.
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