Splitting Hairs Over Culture

Tuesday, May 15, 2007

Two articles I read recently have gotten me thinking more about this idea of a “strong” culture and whether such a moniker is as desirable as it sounds.

David Cho’s May 7 article in the Washington Post on New Century Financial’s culture (“Firm’s Culture Led to Approval of Bad Loans”) and a white paper (“Demystifying Corporate Culture”) on HermanMiller’s website either refer or allude to strong cultures.

Here are the opening paragraphs from Mr. Cho’s article:

Maggie Hardiman cringed as she heard the salesmen knocking sides of desks with a baseball bat as they walked through her office. Bang! Bang! “’You cut my [expletive] deal!’” she recalls one man yelling at her. “’You can’t do that.’” Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said. But “you didn’t want to turn away a loan because all hell would break loose,” she recounted in interviews. When she did, her bosses often overruled her and found another appraiser to sign off on it.

In the HermanMiller paper, one of its opening paragraphs reads as follows:

The idea that an organization could be intentional about building a culture and that the culture can, in turn, affect an organization’s performance, has been around since 1939, but it didn’t fully enter the business consciousness until the late ‘70s. Since then, a strong corporate culture has become a holy grail of sorts for companies looking for an edge in today’s environment of constant change and increasingly stiff competition.

So what makes for a strong culture? I think an argument can be made that New Century Financial had (the company has declared bankruptcy) a strong culture. There seemed no doubt about what it expected of its employees, what was necessary to succeed in its marketplace, and the values it emphasized: approve as many loans, however questionable the credit history of the applicants, as fast as possible. Yet I doubt if most people would hold New Century Financial as a culture worth emulating.

All of this reminds me that I have been uncomfortable for some time with the concept of a strong culture as the desired state because it is open to interpretation and it implies a certain set of values that isn’t always reflective of health or strength. For example, is a culture strong because there are clear expectations and mission and are consistent in reinforcing certain behaviors? If so, New Century Financial meets these criteria, however dysfunctional and demeaning some people experienced it. Or is a culture strong simply because it has endured? Then a hide-and-cover culture like Ford Motor can end up relying more on living on its past glories than facing its current and future challenges. And to what degree does a charismatic leader boost this endurance through his or her sheer will and when they are no longer on the scene, the culture struggles to survive? In addition, it doesn’t take much for conventional wisdom to think of a culture as “strong” one day and “rigid” the next when it fails to adapt to its external environment.

Therefore, I think we need to further evolve our perception and understanding of what makes for a desirable culture and I think the adjective “strong” falls short and is outdated. I would replace it with “sustainable,” which I recognize is somewhat of a buzz word. But what is probably not a passing fad is that organizations in the future will experience rapid and unpredictable change. The ability to adapt and find new ways of accomplishing its mission or the flexibility to re-think its purpose convey to me a strength that is uncommon but critical if we are to preserve the best of what collective effort in an organized entity can accrue to its members, our economy, and our society.