Question:
In a couple of your articles from earlier this year, you talked about corporate culture. Is corporate culture something managers can really influence? To me, culture is such a big issue I don’t know what any one manager can do about it. You seem to think differently. Can you explain why you feel corporate culture is so important? Why should managers try to change corporate culture?
Answer:
Yes, I have made mention of corporate culture in some of my recent SBT articles. If you’ve been reading my articles for some time, you know that I feel very strongly about the need for managers to focus on corporate culture. You know that I refer to corporate culture as the "other bottom line" of the organization. Obviously, the bottom line, the financial one, is a focal point. But, from my way of looking at things, the way to drive the bottom line is by taking care of the other bottom line. Let me elaborate.
Corporate culture has many definitions, but perhaps the best one is the simplest. It goes like this, "The way we do things around here." A host of variables combine to comprise corporate culture, ranging from issues of power and status, degree of formality, amount of structure, language considerations, physical environment (including aesthetics), values, symbols, rituals, dress code, etc.
For any organization, there are sub-cultures within the larger culture. You know this if you take the time to look at the various "ways of doing things" that emerge within various work areas or departments at your own company. You ask about the ability of any manager to affect corporate culture. Let me be very clear on this point: I firmly believe that managers have the opportunity to impact the culture of the area of the organization in which they operate. Let me go even farther and state that top managers have the potential to influence the corporate culture at-large because of the strategic positions they occupy. They have the power and the authority to make things happen throughout the organization. The saying, "the tone is set at the top" applies here. By espousing certain values, emphasizing certain actions and communicating certain messages, top managers have a lot to do with the kind of behavior that is deemed to be acceptable in the organization. Over time, their actions along these lines shape the kind of corporate culture that emerges.
An easy example of "tone at the top" is when a new coach is hired to take over a sports team. What typically happens? The talent on the team is evaluated, recent results that have been obtained are scrutinized, the methods and techniques that have been used are studied, etc. After undertaking this analysis, changes are inevitably made. A new system of offense might be installed. Discipline and organization might be heightened. In short, a new version of "the way we do things around here" is usually written.
Why is it that certain coaches (Pat Riley, Bill Parcells and Tony LaRussa come to mind quickly) seem to have winning teams wherever they go? You might say that a lot of it has to do with the talent with which they have to work. But, these are coaches at the professional level, and talent is plentiful throughout their leagues. No, talent alone cannot explain why these coaches win.
I believe these coaches are so successful because they take the time to instill an explicit culture of heightened expectations along the lines of, "We are winners here. We expect to win. We have a system that we adhere to that helps us win." In other words, by focusing on building a coherent corporate culture (i.e., the other bottom line), these coaches are confident that the wins and losses (i.e., the bottom line) will be taken care of.
I believe this formula holds true for the business world, as well. Research supports my position, by the way. Researchers, including Edgar Schein, Sloan Fellows professor of management emeritus at MIT and author of A Organizational Culture and Leadership, have documented that developing a unified corporate culture can improve internal operating effectiveness and influence external performance in the marketplace.
So, the prescription here is for managers, especially those at the top of the organizational hierarchy, to reflect on the values they espouse. What behavior is encouraged? What behavior is discouraged? What do we truly stand for? Who are the role models around here and why are they looked up to? On what basis do people move ahead at our company? How do we handle conflict and stress? Are we encouraging an appropriate work-life balance? Do we offer amnesty for candid comments? Is trust the basis for our relationships? Are we making it easy for our people to succeed? What barriers or obstacles need to be removed? What resources are our people lacking that preclude higher performance levels? And so on.
Ideally, in a perfect world, organizational values are supported and practiced by individuals. A strong degree of organizational commitment is observed in which employees identify strongly with the organization and its goals. Individual beliefs and practices are entirely consistent with organizational beliefs and practices. Recognition and reward systems reinforce those who perform consistently with the norms that have been established. Conversely, those who act in opposition to the organization’s espoused values are disciplined. In summary, I believe that managers can, indeed, influence corporate culture. They can do so by pointing others in the right direction. More importantly, they can do so by showing the way in how they conduct themselves in their daily practices.
