Corporate X-Ray

Time for a Blogging Sabbatical

2008-12-01T14:39:00.002-05:00

Monday, December 1, 2008

It's time to take an extended break. Thanks for reading when you could. Take care.

Brian Tolle

Oprah's Culture Club

2008-11-03T12:13:00.002-05:00

Monday, November 3, 2008

Here's another source of inspiration for building your company's culture. Leigh Buchanan of Inc. magazine gives us an inside look at Aegis Living's annual meeting and how Oprah inspired its CEO, Dwayne Clark, to use her model to develop a more caring and supportive culture at the 34 assisted living facilities Aegis manages.

I can appreciate how this type of investment could have huge pay-offs when it comes to employee relations in this type of industry -- historically low margins translating into low interest in developing managers or employees. I just hope Aegis combines the inspiration with skill building to give its managers a well-rounded tool kit for managing and motivating its employees. $50,000 is a lot of money for inspiration that may not have a long shelf life.

Big Culture, Big Pay-off

2008-10-08T16:42:00.001-05:00

Wednesday, October 8, 2008

Just got back from the E2 Detroit event at Wayne State University and was most impressed with the Opening Keynote Presentation by Lisa Stern, founder and President of Big Communications, Inc., talking about building the right culture for the success of one’s company. It was very refreshing to hear from a business owner who “gets it” when it comes to the importance of the right culture to drive business performance. Some highlights from her talk:

• When the company grew to about 25 employees (it’s now just over 100 employees), she and the rest of the leadership team realized they needed to take a step back and think through what made the Big Communications work environment so special so they looked at the qualities of their top performers to identify the values that seemed to make them stand out.
• Those values were good communicator, trustworthy, detailed, collaborative, positive, creative, solution oriented, kind, and champions of change.
• They realized that these were the values they wanted to emphasize as the Big Communications culture.
• Over the years, Lisa, who personally interviews every candidate, has improved her behavioral-based interviewing process to be able to solicit information from candidates to inform her and other BC hiring managers on how well the candidate embodies and has demonstrated these values in prior work.
• In June 2008 magazine publisher Meredith acquired Big Communications and Lisa believes that BC’s culture made it highly attractive to buyers.
• When they evaluated potential suitors they were adamant about making sure there was a cultural match – similar values.
• They had three criteria the buyer had to meet: collaboration, control, and culture. They had to agree to a collaborative approach to joining together and that they gave Lisa and her team control over the BC culture.

So now it’s a $20m business and Lisa attributes that to their values. “Values make you invaluable,” as she pointed out. Nice return on all that touchy-feely stuff.

Steal This Idea

2008-09-11T15:46:00.001-05:00

Thursday, September 11, 2008

Every so often I need to take a break from the world of corporate culture and today is the day. So here’s an idea that came to mind as I was sitting in Ann Arbor Spark’s workshop on guerrilla marketing…

If any of you have connections within Northwest Airlines (soon to be Delta), tell them they should do the following:

Create a version of Google AdWords that appears on the Northwest Airlines web site that links ads to particular travel demographics. For example, as a small business owner trying to get the attention of business leaders who need to either develop the right leaders or the right culture to grow their technology or scientific business, I would gladly pay Northwest Google-comparable fees to have my ad pop up when a traveler books a flight between Detroit and any of the following cities:

• San Francisco
• San Jose
• Seattle
• Portland, OR
• Los Angeles
• NYC
• Boston
• Minneapolis
• Chicago
• Raleigh/Durham
• Austin

I’d be open to paying a premium if the traveler is either traveling first class or is a Platinum or Gold frequent flier. And I think Northwest could make some money off of this.

How about it Delta-west?

Woody’s Debt to Culture

2008-09-05T10:26:00.004-05:00

Friday, September 5, 2008

Check out the article by the president of Pixar and Disney Animation Studios, Ed Catmull, in the September issue of the Harvard Business Review (“How Pixar Fosters Collective Creativity”). Some quotes that caught my eye and some quick commentary…

We must constantly challenge all of our assumptions and search for the flaws that could destroy our culture.

Makes me think about how fragile a strong culture can be.

Good directors not only possess strong analytical skills themselves but also can harness the analytical power and life experiences of their staff members. They are superb listeners and strive to understand the thinking behind every suggestion. They appreciate all contributions, regardless of where or from whom they originate, and use the best ones.

I’m still looking for the word “ego.”

For 20 years, I pursued a dream of making the first computer-animated film. To be honest, after that goal was realized – when we finished Toy Story – I was a bit lost. But then I realized the most exciting thing I had ever done was to help create the unique environment that allowed that film to be made. My new goal became, with John (John Lasseter, Pixar’s chief creative officer) to build a studio that had the depth, robustness, and will to keep searching for the hard truths that preserve the confluence of forces necessary to create magic.

And that my friends, is legacy leadership.

Now if I had a chance to talk with Ed (let me see if he is in my Linked In network) I would want to hear his thoughts on whether you can document and transfer the kind of talent he describes as so critical to Pixar’s consistent success. Given his experience with having to replace the initial Toy Story 2 creative leadership team, what does it take to turn a B Team into an A Team? I would be curious to hear his thoughts on why did the seasoned team see what needed to be changed and not the novice team and how that vision could be transferred to less experienced creative folks. If Ed and John are going to succeed in building a sustainable organization that can consistently deliver magic, that’s the big challenge they’re going to need to overcome.

Margaret Mead meets Tom Peters

2008-08-21T08:31:00.002-05:00

Thursday, August 21, 2008

I don’t think I’ve written yet about the field of anthropology and its role in understanding corporate culture so Scott Berkun’s interview with Grant McCracken in the Harvard Business Review Online this week caught my eye. Their discussion focused more on the connection between marketing and anthropology and less on corporate culture. I would have liked to have read more about McCracken’s take on “how to win by studying corporate culture.” Let me use his story about the Harvard Business School intern at Coca-Cola to make my point.

I can see why the link between anthropology and marketing would have jazzed this guy – it’s the secret code to grabbing greater market share. I suspect, however, he missed the significance of understanding corporate culture. As "massively talented and unstoppable" as he and most executives are, they can hit a huge brick wall if they ignore or dismiss their corporate culture. I’ve written in previous blogs about the great "case study" that is Deborah Sontag's feature article ("Who Brought Bernadine Healy Down?") in the December 23, 2001 issue of the New York Times Magazine on the battle between a strong CEO (Bernadine Healy) and a strong corporate culture (American Red Cross). My experience is that it takes a wise (and not just talented) leader to appreciate the intangible pull of a corporate culture on why humans do what they do in an organization. Add to this the myth that leaders are capable of independent thought and action – something as soft as culture can’t sway them – and leaders can end up wearing some serious blinders.

So my take is that a leader wins by studying their own corporate culture – taking a more participant-observer role in his or her own organization – paying attention to why people do certain things in some situations and not in others. Being an informal ethnographer. J. McIver Weatherford’s “Tribes on the Hill: the U.S. Congress rituals and realities” is a great book that can open your eyes about “seeing” organizational culture through the lens of anthropology. He published it back in 1981 and it may only be available through used bookstores but I remember reading it back then and thinking it very eye opening.

Visualizing a Culture of Innovation

2008-08-12T09:04:00.004-05:00

Tuesday, August 12, 2008

One of the most difficult things about corporate culture is its invisibility. That's why Betty Plevney's visual depiction of a company's perspective on innovation is eye-catching. I came across this on the VizThink website.

Betty is a graphic facilitator and here's how she described this client situation:

A consumer products company is deepening its understanding of the innovation process. This chart depicts an early one-hour discussion on their own fears and hopes, the process of innovation and change and managing risk and failure.

I think this is a great example of how using visuals brings in a different language into the discussion of how an organization is going to build both a process and culture of innovation. Betty can be reached at betty@plevney.com.

Freedom Fries and Telecom: Au revoir Madame Russo et Monsieur Tchuruk

2008-08-05T17:21:00.003-05:00

Tuesday, August 5, 2008

This week Alcatel-Lucent announced that its CEO, Patricia Russo and Chairman, Serge Tchuruk are moving on.

As the Wall Street Journal reports, the relationship between the two engineers of the 2006 merger had deteriorated to the point that both acknowledged to the Board they could no longer work with the other. Something about him sticking his nose where it didn’t belong and she being incompetent. Another reminder you never outgrow high school. So they both get canned. And the Journal reports that the new CEO will need to “ease cultural tensions after two years of tumult.” Talk about a culture clash – Paris and New Jersey. It boggles the mind.

As a side note, I came across this editorial in NJBiz. I don’t think Ms. Russo’s publicist is real thrilled with the association. This just wasn’t your week, Pat.

Best Ways to Earn Your Employees' Love -- The Results Are In!

2008-07-29T15:53:00.004-05:00

Tuesday, July 29, 2008

A few weeks back I invited folks to rank order 21 ways to earn employees' love for the company and the results are in. Here is how the perks rank (remember, people had to rank order the 21 items so the lower the average score the better). Also, I've included the original descriptions of these perks that appeared on the blog posted by the CEO of SurePayroll, Michael Alter -- the blog that got this whole thing started.

You'll see that you can't buy love on the cheap.

#1 is...Give Them Managers Who Know How to Manage People (average ranking: 2.3) All the perks in the world can’t overcome working for someone who is a jerk. Choose and retain people for management because they can bring out the best in everyone they work with.

#2...Positive Words and Opportunity to Succeed (average ranking: 2.6) Studies show that workers who receive regular praise and are given an opportunity to do what they do best every day are more loyal and more productive workers. As if we needed a study to realize that!

#3...Office Ambiance (average ranking: 5.5) Dingy walls and cramped quarters don't do much for employee love. On the other hand, employees love to work in an office that is stylishly designed with ample room and great furniture.

#4...Ownership (average ranking 6.0) Give employees a piece of the equity pie and everybody's interests are suddenly aligned.

#5...Learn, Baby, Learn (average ranking 6.7) For many people, it's not just what they earn, it's what they learn. Invest in employee training and you'll soon have a more loyal, not to mention more skilled, workforce.

#6...Friends (average ranking 7.5) People who don't have friends at work are more likely to quit. Those who have friends are more engaged at work. So do something that encourages friendships…start an office book club, for example.

#7...Free Parking and Transportation Reimbursement (average ranking: 8.2) Instead of raising salaries, offer to pay for parking or train passes instead. It's a small gesture but employees will appreciate it. And it's tax deductible.

#8...Casual Dress Codes (average ranking: 8.5) If I had a dollar for every employee that's quit a job because the dress code was too formal, I'd be a rich man indeed. At SurePayroll, we are very carefree when it comes to dress codes and our employees appreciate that very much.

#9...Surprise Holidays (average ranking: 8.5) Everybody loves a day off, especially if it's not on the holiday schedule. Want to put smiles on the employees' faces? Announce a day off out of the blue.

#10...Free Food and Drinks (average ranking 11.0) Having free sodas in the fridge and free snacks on the break room counter are tried and true techniques. Keep the snacks healthy and you'll win a few extra points for being concerned about employee wellness.

#11...Proximity to Public Transportation (average ranking: 11.2) Location, location, location! Most folks will trade salary for a shorter, easier commute. If you have a convenient location, you can count on a broader selection of employees.

#12...The Latte Machine (average ranking: 11.7) Throw out the cheap coffee maker and invest in a high-end coffee heaven maker.

#13...Bring in the Masseuse (average ranking: 12.5) Last but not least, when the going gets tough, the tough get a massage. Make your office stress-free by bring in a masseuse once a month — or during your busier, more stressful times.

#14...Great Parties (average ranking: 13.3) Companies that party together stay together. Take time out to celebrate and do it in style.

#15...Dinner for Two (average ranking: 15.1) Don't forget to pamper spouses and partners too. Treat employees to a night out with their loved ones and you'll earn twice the love.

#16...Flu Shots for Everyone (average ranking: 15.9) I wasn't so sure about this one, but after two years of providing flu shots, I’m sure our winters are more productive with happier, healthier employees.

#17...Call In the Ice Cream Truck (average ranking: 15.9) When the ice cream truck pulls up in front of your business and gives your employees free ice cream, you’re sure to earn a few employee loyalty points.

#18...Tickets to the Big Game (average ranking: 16.0) Surprise your employees with an outing to the local ballgame.

#19...The Game Lounge (average ranking: 17.3) Foosball, billiards, air hockey, your favorite game console, or even something as low tech as Checkers or Monopoly -- let the games begin!

#20...Beer (average ranking: 17.5) One reader wrote me that he has a keg tapped in his office every Friday afternoon and that employees love it. I'll drink to that!

#21...Movie Afternoons (average ranking: 18) All work and no play makes for a dull workforce. Fire up the conference room projector every Thursday at 2:00 PM and show a movie. Don't forget the popcorn!

Roche’s Bet on Genentech’s Culture

2008-07-22T17:11:00.002-05:00

Tuesday, July 22, 2008

In case you haven’t heard, Swiss pharmaceutical company Roche announced yesterday that it wants to buy the remaining 44% share of Bay Area biotech company Genentech it doesn’t already own. (In the interest of full disclosure, Genentech is one of my clients.) It’s not surprising that Roche wants all of Genentech’s capabilities when it comes to the business of science – Genentech has been hugely successful with its suite of oncology therapies.

And if you follow some of the pharma blogs, many inside and outside Genentech are predicting a brain drain of scientific talent once mean old Roche (and all its minions in Nutley, New Jersey) get their hands on Genentech’s cherished entrepreneurial, “science is king” culture. All of this may be very true and Roche’s press release announcing its intent mentioned more than once keeping Genentech’s culture intact. But one way to assess the possible effect of a brain drain on Genentech’s ability to continue to perform as it has so far is to look at this situation through the lens of Clayton Christensen’s Resources-Processes-Values (RPV) framework and how the source of an organization’s capability migrates over time.

Let’s start with Christensen’s definitions of resources, processes, and values, in his own words.

Resources include people, equipment, technology, product designs, brands, information, cash, and relationships with suppliers, distributors, and customers. Resources are usually people or things – they can be hired and fired, bought and sold, depreciated or built.

Organizations create value as employees transform inputs of resources – the work of people, equipment, technology, product designs, brands, information, energy, and cash – into products and services of greater worth. The patterns of interaction, coordination, communication, and decision making through which they accomplish these transformations are processes.

An organization’s values are the standards by which employees make prioritization decisions – those by which they judge whether an order is attractive or unattractive, whether a particular customer is more important or less important than another, whether an idea for a new product is attractive or marginal, and so on.

Christensen points out that:

In the start-up stages of a business, much of what gets done is attributable to its resources – particularly its people. The addition or departure of a few key people can have a profound influence on its success. Over time, however, the organization’s capabilities shift toward its processes and values. As people work together successfully to address recurrent tasks, processes become defined. And as the business model takes shape and it becomes clear which types of business need to be accorded highest priority, values coalesce.

Success is easier to sustain when the locus of the capability to innovate successfully migrates from resources to processes and values. It actually begins to matter less which people get assigned to which project teams. In large, successful management consulting firms, for example, hundreds of new MBA’s join the firm every year, and almost as many leave. But they are able to crank out high-quality work year after year because their capabilities are rooted in their processes and values rather than in their resources.

So the big question is whether Genentech has evolved (what would a story about a California company be without at least one use of the word “evolve?”) to the point that its “locus” of organizational capability has migrated from resources to processes and values? If so, we need to remember that processes and values don’t reside in any one person or group of people. It is as though they exist in an alternate universe, to the point that even if in some fantastical circumstance, every single employee were to leave Genentech, there would still be a virtual repository of processes and values that other smart, scientific people could plug into and get comparable results.

So where does culture fit into the RPV framework? Dr. Christensen, if you please.

As successful companies mature, employees gradually come to assume that the priorities they have learned to accept, and the ways of doing things and methods of making decisions that they have employed so successfully, are the right way to work. Once members of the organization begin to adopt ways of working and criteria for making decisions by assumption, rather than by conscious decision, then those processes and values come to constitute the organization’s culture.

So Roche’s real bet when it comes to Genentech’s culture is that is has evolved past a person-dependent capability and resides much more in the company’s processes and values, whether or not they are followed by assumption or consciously. If so, Roche could withstand the loss of an Arthur Levinson (Genentech CEO) or Richard Scheller (Genentech Chief Scientific Officer) and still maintain the organizational performance of Genentech, as long as it doesn’t screw around with its processes and values. But that’s a big “if.” Roche’s leadership team has a big decision to make -- where business and philosophy intersect. Should Roche become more like Genentech or Genentech more like Roche? Quite the wager.

Culture Break: Snagfilms Experiment

2008-07-17T08:44:00.003-05:00

Here's a break from the world of organizational culture. Check out this new site (www.snagfilms.com) for posting documentaries. And why this paricular video? Well, as a baseball fan, I know it never hurts to learn how to hit a curve ball. Check it out.

Leadership Coaching: Perk #21, Part 2

2008-07-16T13:56:00.001-05:00

Wednesday, July 16, 2008

This being a respectable business blog and all, I’m a bit hesitant to include a letter from Dear Abby (I have an editorial policy never to use the word “closure” in my blog) but a Corporate X-Ray reader was kind enough to point out a letter that appeared in Monday’s Dear Abby column this week. In the spirit of serendipity, here it is.

Dear Abby: I read an article in our local paper a while ago that said good employees who leave a company usually do so because of their boss.

With that in mind, I would like to bring closure to my recent resignation with the following open letter to my former boss:

“Thanks for asking me to stay on, but I respectfully decline. I will be self-employed from now on. However, if in the future I ever feel the need to be publicly humiliated, blind-sided, ostracized and called a spy, be distrusted and disciplined by superiors for no good reason, fight for wages that are rightfully mine, stabbed in the back by fellow employees, used as a pawn in executive rivalries, or (especially) chewed out when you’re having a bad day, I’ll get back to you!”

- Moving on in New Mexico

Hasn’t He Ever Heard of Dilbert?

2008-07-14T16:48:00.003-05:00

Tuesday, July 15, 2008

I’m surfing the web the other day and I come across this blog entry on the Inc. magazine site – 20 perks that will earn your employees’ love. The blogger, Michael Alter, is obviously no slouch – CEO of an $11 million company that the National Association for Business Resources named as one of Chicago’s 101 Best and Brightest Companies to Work For, not to mention McKinsey and Harvard MBA credentials.

So after reading his list, I was struck by one “perk” that was missing that my experience tells me is a huge factor in whether an employee “loves working for you.” That perk is a manager who isn’t a jerk, who doesn’t make their employees’ jobs more difficult, who actually looks out for the best interests of their employees, who isn’t working out childhood issues on company time. Is that too much to ask? Now I recognize that perk #18 down the list -- Positive Words and Opportunity to Succeed – is part of being a good manager but I think Mr. Alter should consider adding a twenty-first perk to make it explicit, and while we’re at it, put it at the top of the list. So here’s my suggestion, Mr. Alter.

Give Them Managers Who Know How to Manage People. All the perks in the world can’t overcome working for someone who is a jerk. Choose and retain people for management because they can bring out the best in everyone they work with.

Besides, your general counsel might be willing to switch this one with the beer perk. Something about having the keg in the manager’s office every Friday afternoon gives me pause.

Hey Corporate X-Ray reader, let me know how you would rank these 21 perks.

Leadership Coaching: Growth Leaders…Know Thy Style

2008-07-07T11:11:00.002-05:00

Monday, July 7, 2008

The Wall Street Journal has a great article this morning (“In Search of Growth Leaders”) about research done by Sean Carr, Dr. Jeanne Liedtka, Robert Rosen, and Dr. Robert Wiltbank on the characteristics of middle managers that have achieved significant organic growth for their companies. I couldn’t help seeing the DiSC behavioral styles in their behavioral descriptions of these growth leaders. What I have seen in my work is that our individual behavioral proclivities have a strong influence on our management approach and actions. So since this research indicates that growth leaders “thrive on accepting challenges, taking action and getting immediate results,” (sounds like the driver-influence style combination to me) here’s some possibilities for our steadiness-conscientiousness style colleagues to consider for personal growth opportunities to drive corporate growth strategies.

Change to Broaden Your Expertise

My steadiness-style compadres often avoid taking on new work experiences out of fear of falling short of expectations and letting their organization or team down. But look at it this way -- by taking these chances and learning new skills in real time, this positions you and your team to contribute significantly to your company’s success by achieving organic growth and at the same time address the unmet needs of your customers, making them very, very happy. Think about it.

Expand Your Definition of “Data”

The research indicated “success was based more often on thoughtful exploration of customers’ needs than on dry market data.” For my conscientiousness style folks out there, stretch your definition of acceptable data to include conversations with clients about unmet needs. Doesn’t sound very scientific but even Margaret Mead did field research.

Lower Your Risk

Neither the steadiness nor conscientiousness styles have a high natural tolerance for risk. So take your natural analytical, collaborative mindset and work with your suppliers and customers to develop ideas (as the research revealed). Also, remind yourself that a degree of testing is part of the analytical process so find ways to experiment in the marketplace to understand what works and what doesn’t work.

You, Too, Are a Pragmatic Idealist

As the article points out,

In assembling teams, growth leaders learned to combine two seemingly opposing forces: holding people ruthlessly accountable for results, and engaging their passion to build something great together.

So as a conscientiousness-style person, you don’t have the ruthlessness of a driver-style person -- big deal. You still know how to hold people accountable, maybe not always for results but definitely for quality. So just move results higher up the priority list. And as a steadiness-style person, you may not have the overflowing passion of an influence-style person, but you know how to work with others, all in the name of accomplishing something great – TOGETHER. Remember, your ego won’t get in the way.

Hope this helps. Now get out there and grow!

Clayton’s Crystal Ball on Chrysler

2008-06-24T16:37:00.001-05:00

Tuesday, June 24, 2008

As far as I know, Clayton Christensen (innovation guru) has not publicly commented on Chrysler’s predicament (fifth place in US sales, sales down 25% in May, only 2 of 21 models listed among Consumer Reports’ recommended models – full disclosure, I own one of those models, the Chrysler 300 and I love it) but his research into the impact of disruptive technology in various industries can give us somewhat of a crystal ball look into Chrysler’s future – and its not pretty.

Chrysler’s migration up the sustaining technology curve in search of greater and greater margins and profits mirrors the actions of many other big players in different industries. It’s no surprise that Chrysler, along with GM and Ford, all fell in love with pick-ups and SUV’s for the primary reason of the bigger margins they commanded than smaller cars, leaving that market to smaller, start-up car manufacturers looking to gain a foothold in the US auto market. So while the Big Three went after these higher margin vehicle sales (wouldn’t you if your internal cost of capital forced you to look for more and more profitable vehicles?), the foreign car manufacturers focused on the smaller car market, honing their cost structure to be profitable in such a tight market.

Christensen’s research revealed that these disruptors started by offering an adequate product or service that met most of the needs of an underserved consumer population. Once the disruptor start-ups established themselves at the down market, they started working up the sustaining innovation curve, getting closer and closer to matching the established companies’ product offerings, all the while honing their cost structure to remain profitable in whatever market they were in. The established companies would end up competing by adding even more functionality to their up-market offerings in order to entice a shrinking, highly demanding customer.

So here is where Chrysler finds itself in the midst of a $4.00+/gallon US market – its big model debut this fall is the overhauled Dodge Ram pick-up with satellite TV, a carlike ride and a bin in the cargo box for hauling 10 cases of beer. I don’t know about you, but I can’t think of anyone who is looking to pay $40,000 to get 15 mpg in city driving. But it’s hard to get off that track of chasing greater and greater margins when you’re on it. So if I were to guess Dr. Christensen’s prediction for Chrysler, it would be the corporate equivalent of hospice.

All of which makes last week’s Wall Street Journa l article (“Nardelli Tries to Shift Chrysler’s Culture”) that much more revealing. In it Mr. Nardelli blames Chrysler’s woes on its “Old Detroit mind-set” and he himself is leading the charge on building a customer-driven corporate culture. It’s hard not to see this as re-arranging the chairs on the deck of the Titanic because all signs point to the Principles of Disruptive Innovation (see Introduction in Christensen’s “The Innovator’s Dilemma”) winning again.

My Chrysler 300 is looking more and more like a Packard every day.

Somebody Get This Guy Some X-Ray Glasses

2008-06-19T14:46:00.001-05:00

Thursday, June 19, 2008

Scott Olson of Ann Arbor SPARK recently recommended to me Keith McFarland’s book “The Breakthrough Company.” Using a similar research methodology as Jim Collins’ “Good to Great,” McFarland wanted to find the answers to the following questions:

Why do most companies start small and stay that way?
What is special about the handful of companies that successfully “break through” the entrepreneurial stage of development?
What can a leader do to ensure that his company maximizes its chances for breakthrough?

Overall, I found the results of his research interesting and the time to read the book worthwhile (probably the biggest test of utility these days). Where I have some significant disagreements is with his chapter entitled “Building Company Character.” Being a self-professed culture guy, I was eager to hear what he had to say. Unfortunately, I think his insights don’t add up. Here’s why. This is his defining statement regarding the difference between corporate culture and character.

Some may wonder why we use the term “character” instead of “corporate culture” – it seems to us that the idea of a corporate culture brings with it too much baggage. Borrowing the term from the field of anthropology, many business observers have given the impression that culture is something largely beyond the control of individuals in an organization. Culture is viewed as something out there, to be studied and rectified by consultants. The idea of organizational character is different. Since character measures how we are as a group of individuals act, we are reminded that each of us has an individual responsibility for determining our company’s character. This point was driven home to us when, during our fieldwork, one executive told us, “There is no such thing as corporate culture, there is only how we treat each other.”

Putting aside the minor slam on consultants, here’s my beef. Just because culture is hard to get your arms around doesn’t mean it’s not relevant -- probably more so. Another thing, I don’t know who Mr. McFarland is talking with, but plenty of work has been done to measure the characteristics of corporate culture and link it to bottom-line results. For me, culture is all about behavior, specifically, patterns of behavior that are expressed in the absence of explicit expectations or that contradict explicit expectations or values. So it’s not just about how people act, it’s also about the way people behave that contradicts what the company espouses as its values or character, as well as what they say or don’t say depending on particular circumstances.

And then McFarland seems to contradict himself. Twelve pages later he is describing a case study featuring Shamrock Foods of Phoenix, Arizona:

A quick survey in early 2007 of the top thirty-five people in the firm identified one of the problems: People in the firm weren’t saying what they really thought. Perhaps owing partly to history (Shamrock is a 100-year old firm still owned by the founding family), people at Shamrock are nice, sometimes too nice. And in the interest of niceness, sometimes people avoided confrontation. It turned out the team didn’t agree as much as thought about what the firm’s key strategic imperatives should be, which caused a lack of focus.

Hello, that is culture! What was causing people not to speak up? Instead of brushing off this behavior as a family-owned business phenomenon (might be a big reason, might not be), McFarland needs some x-ray glasses to see through the actions to the underlying behavior and even further to the reasons behind these behaviors. This is the messy digging up process of an organizational anthropologist, Mr. McFarland. You might want to hang out with us for a while.

Intel’s Atom: Disruptive Innovation in Action

2008-06-10T10:28:00.003-05:00

Tuesday, June 10, 2008

If you’re familiar with Clayton Christensen’s research into sustaining and disruptive innovations and the forces that can make established companies turn a blind eye to going “down market” to take advantage of a disruptive innovation, then the news coming out of Intel last week was all the more revealing. Don Clark’s article in the June 3 Wall Street Journal (“Intel Looks to Power Bottom of Market: Atom Chips Will Serve In Notebooks, Desktops Priced as Low as $200) appears to be a highly unusual case of an established company finding a way to go against the grain and produce a lower margin product to be able to compete in a tighter margin but potentially high growth market. In this case it is the low price laptop and desktop markets. This is apparently a classic case of companies taking advantage of “performance oversupply” and offering a solution that has trade-offs more appealing to an underserved market. In “The Innovator’s Dilemma,” Christensen uses Intuit as a case study in how to exploit such an opportunity.

By watching for small hints of where the product might be difficult or confusing to use, the developers direct their energies toward a progressively simpler, more convenient product that provides adequate, rather than superior, functionality.

Clearly the computer manufacturers of Nettops and Netbooks, (Acer Inc. and Asustek Computer Inc.) recognize that the trajectory of focusing on the most demanding customers (computer geeks who demand more and more functionality) can distract a manufacturer from a market where adequate functionality would actually end up exceeding their expectations. As for Intel, I can only imagine the battles that ensued in its resource allocation process to justify going down-market where margins are low and markets relatively unknown. If Christensen’s research provides a crystal ball, the Atom chip will go through a series of sustaining innovations over time and eventually supplant the higher priced (and margin) chips as the chip-of-choice for established manufacturers.

An Unnatural Culture

2008-05-28T13:16:00.002-05:00

Wednesday, May 28, 2008

One of my clients recently adopted Clayton Christensen’s model of organizational innovation and so I thought it best to get myself up to speed on his ideas. The Innovator’s Dilemma, published in 1997, is his original work and so I started there. It was there that I came across his principles of disruptive technologies and thought about their relevance to an organization’s culture. First, here is some background on Christensen’s work.

His original research focused on trying to understand the apparently paradoxical phenomenon of “well-managed companies that have their competitive antennae up, listen astutely to their customers, invest aggressively in new technologies, and yet still lose market dominance.” What he learned was:

Good management was the most powerful reason they failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in new technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.

Christensen observed that when good companies failed, it was often because their managers either ignored particular principles or chose to fight them. He calls these rules the principles of disruptive innovation. He distinguishes between sustaining technologies (new technologies that foster improved product performance) and disruptive technologies (new technologies that under-perform established products in mainstream markets but have other features that a few fringe (and generally new) customers value, such as cheaper, simpler, smaller, and more convenient to use.) He builds on an age-old notion that “we exercise power most effectively when we understand the physical and psychological laws that define the way the world works and then position or align ourselves in harmony with those laws.” So here are his five principles of disruptive technologies:

Principle #1: Companies Depend on Customers and Investors for Resources
Principle #2: Small Markets Don’t Solve the Growth Needs of Large Companies
Principle #3: Markets that Don’t Exist Can’t Be Analyzed
Principle #4: An Organization’s Capabilities Define Its Disabilities
Principle #5: Technology Supply May Not Equal Market Demand

It was when these principles were combined with his observation that “every company in every industry works under certain forces – laws of organizational nature – that act powerfully to define what that company can and cannot do,” that the idea organizational cultures could be thought of as “natural” or “unnatural” popped into my head. So how can a culture be “unnatural” when it comes to these principles? Let’s take one at a time.

Principle #1: An unnatural culture would be one where the spoken or unspoken attitude is “we know what’s best for our customers” or in a similar vein “our customers need to be satisfied with what we make available to them.” Variations on this theme all point to a skewed view of dependency; it is not customers who depend on the organization but the exact opposite. But too many organizations have held this belief right up to the grave.

Principle #2: Mental models of the value of growth, time, sizes of markets, and organizational structures have the potential to distort an organization’s perception and assessment of where and how to invest in new, smaller markets for future growth. An unnatural culture would be one that puts on its own blinders as to what is possible as well as desirable.

Principle #3: A culture characterized as analytical, rational, methodical and focused on the tangible, concrete and predictable will struggle with giving itself the freedom and permission to explore rather than plan, to experiment rather than execute. An unnatural culture is one that fights these impulses as an organism fights an infection.

Principle #4: Christensen points out that an organization’s capabilities reside in two places – in its processes (“the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value”) and in its values (the criteria that managers and employees in the organization use when making prioritization decisions.”) An unnatural culture is one where its processes and values can’t change in response to the dynamics of the external world. In these cases, the organization declines through rigidity as any organism would with clogged arteries.

Principle #5: Hubris can dominate an organizational culture that holds up the tenet “build it and they will come” as the guiding truth. It is the chance to offer “the possible” rather than “the desired” that energizes such organizations. They load on features that usually add more complexity and fewer benefits to the end user. Driven by the “cool factor,” such unnatural cultures end up being detached from the very people they depend on -- their customers -- and end up worshipping at the feet of technology and progress.

Microsoft and Yahoo: Can You Merge Philosophies?

2008-02-20T15:42:00.001-05:00

Wednesday, February 20, 2008

On so many levels, Microsoft’s potential purchase of Yahoo is mind-boggling. The price tag alone, $44 billion, makes one’s head spin, not to mention the logic of how two also-rans to Google could combine to become number one. But what really got my attention was an article in the New York Times this past Monday by John Markoff and Matt Richtel (“Of All the Hurdles to a Merger, View on Technology Is the Highest”). In the article, Messrs. Markoff and Richtel point out that Microsoft and Yahoo have very different philosophies when it comes to software technology and have built their respective Internet data centers on very different platforms. As the authors point out, “while Microsoft has built its Web services largely using its proprietary tools like the .Net programming system, Yahoo has a well-known open-source culture.” For the non-techies in the audience, this is a wide gulf in philosophy that carries with it a fair amount of value judgments. Both companies have built their corporate identities on their software philosophies and I suspect have heaped their fair share of scorn on the other during their respective happy hours.

Add to this comments from an interview with Bill Gates on Wednesday of this week, as reported by Ina Fried on her blog, Beyond Binary. Mr. Gates points to Yahoo’s engineering talent as the big prize of the $44 billion purchase to help Microsoft build tools for advertisers, mobile, and video products as well as improve its core search algorithm. "The amount of computer science it is taking to do that is phenomenal," he said. "As you get more scale of engineering you can just pursue that agenda more rapidly. Yes, the advertisers and the number of end users is good, but we'd put the people and the engineering as the key thing." So its all those bright engineers that Microsoft really covets. It sounds like the Yahoo servers are headed to the recycling bin.

Just with those two things in mind, think of the cultural hurdles still to come. For instance, you are a Yahoo engineer who works there because it has, and values, open-source software. Here comes your own version of Darth Vader in the form of Microsoft to take over your world. So you start looking around for more hospitable surroundings, some place more in line with your technical values. But that is the last thing Microsoft wants to see happen. It wants you to stay. “But you’ll need to think like us,” comes the message. “And welcome to our inner sanctum of proprietary software. Together we will destroy Google.”

This is going to be some twisted marriage.

Culture’s Drag on Big Pharma

2008-01-17T09:35:00.000-05:00

Thursday, January 17, 2008

Last night I attended a program sponsored by BioArbor, our local biotech industry group. The speaker was Dr. Gus Watanabe, former head of Eli Lilly’s R&D, and the talk was advertised as “The Future of Big Pharma R&D: Moving from FIPCO to FIPNET.” I’m always up for learning new acronyms. He started off by painting the same grim picture of Big Pharma’s R&D performance over the past ten years. Bottom line -- not very good. It seems like everyone’s pipeline is pretty thin and the days of the blockbuster drug is over. And then he shared some comparable data regarding some biotechs that he is involved with and showed a dramatic difference in the length of drug discovery between the smaller biotechs and the larger pharma companies.

So he asked, why is biotech so much more efficient that Big Pharma? The reason for him is primarily cultural. He pointed out that in biotech there is less bureaucracy, quicker decision-making, and less distraction. In Big Pharma, very talented scientists can spend a lot of their time on committees and consultations with other business units that may not be directly related to drug discovery. He pointed out that in most Big Pharma companies, scientists spend about 1/3 to 1/2 their time doing drug discovery work, whereas in biotech companies, they can spend most of their time in the lab.

He sees no reason why the trend to outsourcing drug discovery work to biotechs won’t continue and will probably accelerate. He expects this outsourcing to spread to other Big Pharma functions, leaving sales and marketing, large drug studies, and regulatory (among others) as their core business units.

So to let you in on the acronym of the day, Dr. Watanabe sees Big Pharma moving from a model of “Fully Integrated Pharmaceutical Company” (FIPCO) to a “Fully Integrated Pharmaceutical Network” (FIPNET). Just think about all the implications from an organization development perspective.

Integrating Cultures: 2008 M&A Forecast

2007-12-19T10:26:00.000-05:00

Some of you in the Merger & Acquisitions world might be interested in this video from the Wall Street Journal featuring Chris Williams of Harris Williams Co. and his forecast for M&A activity in 2008.

Wall Street Journal 2008 M&A Outlook

In case I don't get to my next blog on Goldman Sachs during this holiday season, best wishes to you and yours for a prosperous 2008.

Leadership Coaching: Helping Them Visualize

2007-11-20T17:21:00.000-05:00

Tuesday, November 20, 2007

Three recent client situations reminded me that most of us find it very difficult to visualize something intangible like teamwork or a feedback-rich culture or a new business model. It’s difficult to verbally answer the question, “what would you hear people say or see them do that would indicate to you this organization values feedback?” when you don’t have a picture of that possible state in your mind.

So here are two products I’ve come across to help leaders visualize what they are trying to create in their organizations. I recently used the VisualsSpeak product with a team recently designated a “leadership team” as a way to help them describe who they are individually and what they bring to the team. VisualsSpeak co-founder Christine Martell was very helpful in getting me up to speed on how best to structure the exercise and facilitate the discussion. The 200 photos were visually engaging and stimulated some great insights from the individual leaders about their role and contribution to the team. The team indicated that the exercise was very helpful in communicating another dimension of each member’s personality and goals, all of which is going to help them continue to build trust with each other. I think this tool is very adaptable and would work great in any situation where a leadership team is trying to make a possible future as concrete as possible.

By the way, Christine is one of the facilitators who will be at the inaugural VizThink Conference scheduled for late January in San Francisco. I’m going to it to learn more about how I can use the visual world to make leadership and organization development come alive. And because you are fortunate to be a reader of this blog, here is a discount code (ACBT1 – that’s a number one at the end of the code) to use to get $100 off your registration price (it pays to know the right people.)

The second product is a video production company called Silver and Goldie that specialize in the production technique called “machinima.” As they describe it, machinima (a word combining "machine animation" and "cinema") is the art of making real movies in virtual worlds that exist as 3D computer-generated imagery (CGI). They have built a studio in Second Life (a virtual world that has gotten a fair amount of press over the past year or so) and create videos without a lot of the limitations the real world imposes and for a cost that is often much more cost-effective as well. Even if you’re not into the virtual world, I find Second Life fascinating because it is giving us a glimpse of what a 3-D Internet is going to look like. Here’s a sample of a video they did for Intel.

What’s great about this technology and product is that it can help leaders communicate a visual picture of what a future state of the company or its culture will look and sound like. So instead of individual employees needing to fill the usual “picture” vacuum (often a source of some very outrageous but creative rumors), they can instead react to a visualization of what the new business model or culture will look and sound like. And a key to motivating people to move forward into the future is to give them a clear picture of what it will look like. Technology now allows you to visually create the future for a very reasonable price. Very cool.

M&A Due Diligence: Company Culture from the Inside Looking Out

2007-11-12T12:38:00.000-05:00

Friday, November 9, 2007

I read with interest David Harding and Ted Rouse’s guest column in the October 2 issue of the Wall Street Journal entitled “Human Due Diligence.” In it, they discuss the importance of paying attention to what they call human due diligence during the merger and acquisition (M&A) process. Under “human due diligence,” they group understanding the culture of the organization, the roles that individuals play, and the capabilities and attitudes of its people. In this article, most of their discussion focuses on the importance of identifying key employees to be retained during the due diligence process. I agree completely. The new organization will need the right talent and an integrated, consistent leadership voice to make the merger successful. But when it comes to how to factor in the two cultures into a new organization, leaders need to identify something more substantive than “decision making styles” to better understand the role of culture in making or breaking the merger.

Therefore, I would add as a critical element of the due diligence process an assessment of how well each company is doing in executing key management practices that have been proven to be linked to bottom line results. One company may be stronger in some practices than the other. When working with companies who are looking to merge or acquire the other, I would want to know how the two companies measure up individually in executing these management practices. This assessment will tell me where the gaps might be that the leaders will need to address before, during, and after the merger. Otherwise we may be looking at what we call “culture” and find out only later that it was more window dressing than substantive business concerns.

If you have read some of my earlier columns, you know I’m a fan of the Denison Culture Survey for these reasons. This instrument can give both companies a clear picture of how well each of them is doing in four critical areas that reflect both an external and internal focus:

• Adaptability
• Mission
• Consistency
• Involvement

I would be more concerned about a merger that indicates that neither organization has a particularly strong ability to adapt to market changes and customer needs (Adaptability) than how similar are the dress codes or benefits packages. Not to say that the merger should be abandoned but instead such an assessment will present the post-merger challenges and risks more clearly and concretely to the decision makers. In my mind, this makes for a more robust due diligence, focused on the key management practices that will ultimately determine the success of the merger and, more importantly, bottom line business results.

Otherwise, the two companies run the risk of falling into the trap of assuming the acquiring company or larger company’s culture will be the culture of the new company. This could end up perpetuating, or even exacerbating, the deficient management practices in the new company. Better to find out where each company stands during the due diligence process by asking up front the people who see the company’s culture from the inside looking out. No matter how challenging an M&A can be to the executives in charge, it’s that much more complicated in the trenches. All the more reason to concentrate on assessing and understanding the culture from a grass roots perspective. Otherwise, leaders retained will squander their talent by assuming culture means one thing when it really means another.

The Proof is in the Fluffernutter

2007-10-22T14:19:00.000-05:00

Friday, October 19, 2007

I’m not a foodie but I live with one so it wasn’t a surprise when we ended up at one of Portland, Maine’s best restaurants, Five Fifty-Five, during a recent vacation. What qualifies this story for this column is that I believe my positive experience had as much to do with the restaurant’s culture as it did with its food. When done right, a business can take on a personality, one that stems from its culture – values, aspirations, and shared expectations. And just like any other appealing personality in a relationship, it can draw you in. How does this happen?

First, the business has to be congruent. In other words, all parts of the operation have to fit together, seamlessly. In Five Fifty-Five’s case, the parts are service, atmosphere, menu, price, and attitude. I have been to plenty of restaurants that have the service down pat but the menu is uninspired. Or a fantastic menu but the actual meal doesn’t match expectations. Or how about those restaurants that have a fancy decor and are obviously projecting the attitude of “we are upscale” and one day you see some tacky sign in its window advertising two-for-one specials. Or lackluster wait staff surrounded by beauty and elegance. It takes a lot of forethought and effort to make sure all the pieces fit together.

But getting all the operational parts to fit together is not enough to create a personality. The business also needs to know “who they are.” Some of this comes from matching the parts well but I believe an experience of personality comes from thoughtful, purposeful design on the part of the business owners. And this personality isn’t necessarily an extension of the owner’s personality. Rather, once you combine operational congruency with a concrete vision -- that is when a personality can emerge that can draw you in. My sense from Five Fifty-Five is that if the owners walked away tomorrow, the staff would carry on the culture because it is that palpable and satisfying to them.

I think the biggest business payoff is that a consistent personality throughout the experience builds trust along the way, implicitly and imperceptibly. In the case of Five Fifty-Five, the consistency of each contact point we had, whether with a staff person or the actual product, was so powerful that we ordered more and enjoyed more than we would ordinarily. By the time we got to the dessert menu, there was no doubt we were going to order the homemade marshmallow fluffernutter because we had complete trust in what they would serve us. And we were not disappointed. It reminded me that a great dining experience has a symphonic quality to it.

So think about this if you’re having trouble attracting and keeping customers. How congruent is your company’s personality? How fragmented? Does it turn customers off or draw them in further? Who are you?

Poisoning a Culture

2007-10-12T07:00:00.001-05:00

Friday, October 12, 2007

I wanted to follow up on my blog from last week about the sexual harassment guilty verdict against the New York Knicks, including its head coach Isiah Thomas and its owner, James Dolan. Even though the conventional wisdom says that Mr. Dolan is in no jeopardy of losing his position (his father would have to fire him), nor is the parent company, Cablevision, likely to lose customers over this, no one should fool themselves into thinking “no blood, no foul.” Leaders who create and perpetuate a culture of intimidation, secrecy, and retaliation ultimately poison their own organizations. This happens because rather than attracting and retaining talent that can drive organizational performance, such a culture attracts and retains people who often are motivated more by self-interests than the interests of the organization. Sometimes it’s a matter of survival, in others a matter of ego. But when it happens with the people in positions of responsibility, the contamination spreads fast and wide.

What kind of talent is going to be attracted to such a work environment, especially when talent is in such short supply in most industries? Who would want to put up with such behavior? One profile is the talented person who takes a big salary with the intent of sticking it out for a year or two and leaving with their resume and bank account upgraded. Then there is the lesser talented person who gets hired because real stars have no interest in such shenanigans. And even more deadly is the person who actually agrees with such leadership practices. Add in those already in the company who feel their only option is to stick it out and so they withdraw as a means of survival. Let this dynamic go unchecked and the poisonous culture becomes more and more embedded in the organization’s fabric and mindset. Then see how ugly this is when new leaders attempt to administer a strong antidote.

I must confess two separate examples that came my way this past week made this story all the more extreme to me. One was the article on leadership in the October 1 issue of Fortune magazine that my colleague Rob Pasick passed on to me. Fortune teamed up with Hewitt and RBL Group to “conduct new research into the ways companies around the world are developing leaders and which are doing it best.” They identified nine best practices that these companies shared when it comes to developing leaders. I checked, “encourages a hostile work environment” wasn’t one of them.

Then on Wednesday I had the distinct pleasure of hearing Joe Dumars, NBA Hall of Famer and now general manager of the Detroit Pistons, speak on leadership at the Detroit Regional Chamber’s Small Business Conference. (Personal plug...I followed Mr. Dumars with a break-out session on how to develop your company's leadership pipeline. Videos of all the presentations are supposed to be eventually posted on the Chamber's website.)Mr. Dumars exudes integrity. (The NBA named its sportsmanship trophy after him.) His three keys to effective leadership? Have the conviction of knowing who you are; set the tone by letting your passion come through; and be the most unselfish person in the room. The irony that his back court team-mate for many years was Isiah Thomas was not lost on many in the crowd. Compare and contrast. That’s a lesson every leader should learn.

Live, from New York, A Cautionary Tale

2007-10-05T09:00:00.000-05:00

Friday, October 5, 2007

For this week’s entry, I go to the world of professional sports to remind us that leadership, culture, and the law can intersect with significant consequences. This past week, the jury in the Isiah Thomas sexual harassment case reached its verdict. It found Mr. Thomas, head coach of the New York Knicks NBA basketball team, guilty of sexually harassing the Knicks’ former senior vice president of marketing, Anucha Browne Sanders. It also found the New York Knicks corporation guilty of subjecting Ms. Browne Sanders to a hostile work environment, and specifically its President, James Dolan, guilty of retaliation. Mr. Thomas’ monetary fine – zero, the Knicks’ fine -- $8.6 million, Mr. Dolan’s fine -- $3 million.

This is a painful reminder that the law, through Title VII of the Civil Rights Act of 1964, holds leaders accountable for their culture, at least in the sense of not creating a hostile work environment. Given all the business books that flood the market touting the management and leadership practices that create successful companies, one would think this type of leadership philosophy would be unheard of in such a public organization as an NBA franchise, and one as storied as the New York Knicks. And as Selena Roberts of the New York Times points out in her article (“The Garden Needed a Warning Label”) this week, there is another sexual harassment case working its way through the legal system involving the New York Rangers, the NHL team, also under Mr. Dolan’s leadership.

From an organizational culture perspective, this is most disturbing to me because it is one thing to have incompetent leaders mishandling an organization and putting it and its employees at risk. It’s another thing to consciously manage your people in such a way that intimidation, secrets, and humiliation define the company’s culture. Given the testimony and verdict, it’s hard not to detect a degree of malevolence in Mr. Dolan’s leadership practices that goes against every management philosophy and ethics of human relations.

But why did it take a public trial and jury to hold Mr. Dolan accountable for his leadership practices? In some ways, this was a disaster waiting to happen. Charles Dolan, father of James Dolan, was the founder of HBO and is best known as the owner of Cablevision Systems Corporation, a large cable television operator in the New York City area, which also owns Madison Square Garden, Radio City Music Hall, the New York Knicks and New York Rangers. Wikipedia lists his estimated worth at 2.3 billon dollars. Though a public company, the Dolan family has essentially run Cablevision as a private company for most of its existence and should actually go private later this month. In 1999, Mr. Dolan gave his son responsibility for the Madison Square properties listed above. Given the strain between the two men that has been reported over the past few years, it wouldn’t be surprising to find out that the father deferred to the son when it came to decisions so as not to come across as a meddler. Add to this that both the Knicks and Rangers are basically franchises, albeit unusual ones, where the respective commissioners of both leagues, David Stern and Gary Bettman, also tend to defer to the team owners, and you end up with little oversight and even less accountability.

So the cautionary tale is that these dynamics that undermine accountability can easily cause those in positions of responsibility to turn a blind eye to such management and leadership practices, which eventually catch up to an organization, its leader, and its stakeholders. Though some in the New York press are saying that the verdict will not hurt Dolan’s career, I can’t help but think of the impact this will have on attracting and retaining talented people in these organizations. But talk about being naïve. I don’t think this is on Mr. Dolan’s mind. It just doesn’t fit in with this Greek tragedy.

Role Model: Mac McCallister

2007-09-28T14:45:00.000-05:00

Friday, September 28, 2007

I’m finally getting around to an article (“To Understand Sheiks in Iraq, Marines Ask ‘Mac’) written by Greg Jaffe in the Wall Street Journal that appeared in its September 10 issue. It is about a former Marine Corps officer, William “Mac” McCallister, who has created a role for himself as the Marine Corps’ expert on tribal culture in Anbar Province and as an advocate for incorporating these insights into the military strategy for stabilizing Anbar Province and the country overall.

Mac comes across as a great role model for “leaders” of any stripe who are looking to achieve challenging results within an unfamiliar or complicated organizational culture. For example, his curiosity about the origins and dynamics of tribal culture, as compared to early American administrators who downplayed their importance, seems to have played a key role in his success to date. But curiosity without humility usually shortchanges the learning process. This doesn’t appear to have been the case with Mac. It appears he recognized his ignorance in the beginning, which fueled his desire to fully understand the situation, no matter what uncomfortable path he ended up following. Contrast that with the “I know what I know and full steam ahead” mindset of the initial American strategy or of business leaders who either ignore or downplay the power of an organization’s culture.

I was also glad to read that people recognized how valuable context is when dealing with a fragmented and foreign situation. As Marine Brigadier General John Allen (deputy commander of U.S. forces in western Iraq) says in the article, “virtually everything Mac said added context to things we had been learning ourselves.” Context pulls everything together and gives it meaning. Without context, actions and words can come across as random events that prevent participants from drawing meaning and patterns, dooming them to a predominately reactive strategy.

Something else that caught my “OD” eye was the quote from Montgomery McFate, a cultural anthropologist with a doctorate from Yale whom the Army hired last year to help draft its new strategy for battling insurgents. Dr. McFate, who the article says has helped mentor Mac, has this to say about her charge. “Mac does exactly what good anthropologists do: He enmeshes himself in foreign societies, and attempts to see the world from their point of view while retaining his own objectivity.” Given how the article describes Mac, it would appear Dr. McFate is on target. But what I would add to her assessment of Mac’s skills is that of a change agent. Mac seems to be going beyond just an advisory role. I suspect because of his Marine Corps background and sense of duty, he is determined to influence and change the U.S. military strategy in Iraq. And I think he has a good shot at success for the reasons described above and for one more reason – he is able and willing to work within a framework rather than ignoring or trying to change the framework. In other words, as he learned more about the tribal culture, his conclusion wasn’t the culture was wrong or outdated or in need of change, rather -- it is what it is. Because of this, he wisely shifted his effort to changing the military strategy. And because he is working within an institution he is very familiar with and which views him with a fair amount of credibility, there is a greater likelihood they will listen and take in what he has to say.

If you’re interested in seeing an unclassified version of Mac’s PowerPoint presentation that he gave to Marine Corps brass this year on the tribal culture and implications for the military strategy, click on the this link.

http://www.smallwarsjournal.com/blog/2007/07/coin-in-a-tribal-society-1/

I particularly found his comparison with the Marine Corps culture to be very interesting. Even without his speaking points, you can get the gist of his argument and insights.

The Granddaddy of Them All

2007-09-07T11:12:00.000-05:00

Friday, September 7, 2007

As I was thinking about Adizes’ life cycle stages recently, the Adolescence stage particularly intrigued me. This is the stage when the organization needs to transition from the Founder running the business to hiring professional managers to do so. This is when a lot of drama can occur. It doesn’t always go as smoothly as, let’s say, the Google experience when founders Larry Page and Sergey Brin recruited Eric Schmidt from Novell to run Google. It also seems regrettable that the transition can go so badly that circumstances conspire to separate the founder from the very company he or she created (witness Steve Jobs in his first go-around with Apple). I understand that some founders are serial entrepreneurs and are quite happy to move on to the next challenge. But what about those founders who clearly aren’t cut out to be CEO’s of the companies they start but still want to play a significant role in the company’s development and success? They represent the most tangible link to the early days of the company when its values and mission were fresh and energized. Must the new regime push him or her to the sidelines? Is there a role for them?

I think there is and I think we need to look to the role of grandparents in our families to give us some ideas of the role a Founder can have as his or her creation grows up. There are a variety of dimensions to the grandparent role. In some cases it serves as a bridge between parents and children. In other cases, it can reinforce and perpetuate the values and beliefs of the family. Given their position of once-removed from the primary responsibility of raising the children, grandparents can add an objectivity and “long view” to day-to-day activities that parents can’t.

How could this translate into a business setting? I see a need, particularly in companies at the Adolescence stage, to have someone of authority have the responsibility of making sure the organization develops both adaptability and resiliency to ensure its longevity. The common CEO and COO roles divide along areas of focus and somewhat along time – the CEO role primarily has an external focus with a medium term view while the COO role primarily takes an internal focus with an immediate term view. What is missing in these two roles is the long view. Who has primary responsibility to ensure the organization has an organizational infrastructure that will help it continue into the future regardless of market conditions or particular leaders? I think this can be an invaluable role for the Founder as the company matures. They can provide a degree of support, stability, and credibility to the organization that an outside, professional leader would be hard pressed to replicate. And this job need not be just a seat-warmer.

With a title like “Chief Culture and Sustainability Officer,” their primary responsibility would be to build and maintain an organizational culture that gives the organization core survival skills and strategic drive. To make this concrete, I would give him or her primary responsibility for developing the key organizational capabilities and management practices that the Denison Model (see my July 27 posting, “Next Time Call Me”) has identified as key to long-term, bottom-line, organizational vitality. Otherwise, this effort can fall through the cracks – too “big picture” for the COO, too operational for the CEO and too critical for the VP of Human Resources. With such a role, the founder could bring a perspective and context to executive deliberations that would otherwise be missing. And they could serve as the bridge between the past and the present and as the guide between the present and the future.

In the right situation, this role would give certain types of founders the greatest reward for the creativity and hard work it took him or her to get the company started and off the ground – the legacy of a company that lives on past them.

Gone Fishin'

2007-08-31T09:54:00.000-05:00

Friday, August 31, 2007

It's such a beautiful day here in southeastern Michigan, I've just got to play hooky. But be sure to check out my posting next Friday entitled "The Granddaddy of Them All." Also, my new and improved website is up and available for visiting at www.tollegroup.com.

Have a great holiday weekend.

Brian

Cue today's theme

The Power of Linking Tools

2007-08-27T13:10:00.000-05:00

Friday, August 24, 2007

I was having coffee with a colleague last week and the conversation turned to Dr. Ichak Adizes’ work on the life cycle stages of organizations. I checked out his website and as I read through the different stages, it struck me that this model and the Denison model are quite complementary. In particular, the Adizes model recognizes that the Prime stage “is the optimal position on the lifecyle, where the organization achieves a balance between control and flexibility.” I immediately thought of the Denison model and its Adaptability and Consistency culture traits.

I think this idea of balance is critical to understanding how the Denison model plays out in the real world and the challenges that come with it. I think of the model as actually a plate that one would hold as if a waiter. The trick is to balance it among the four culture traits (Involvement and Mission being the other two) to produce the greatest organizational performance level. What the Adizes model helps us to see is why this imbalance can occur over time. It also identifies which of the issues that lead to this imbalance are normal problems -- that is, those that could probably go down lower on the priority list because “they tend to resolve themselves during the natural course of growth and development.” More importantly, the model also identifies the abnormal problems associated with each of the lifecycle stages. It is these problems that require as much of an organization’s limited time and resources as feasible to address and resolve if the organization is to move to the next lifecycle stage.

An analysis of organizational performance can benefit from integrating the two models because they each bring a unique dimension to the task. The Adizes model brings more of a time dimension while the Denison model brings more of a depth dimension to the analysis. If we think of an organization as a large-scale organism, it’s as if the Adizes model calls upon our skills as a developmental psychologist over time and the Denison model as an internist at particular moments.

For example, an organization can conduct a Denison culture survey and learn that its organizational capability of coordination and integration is relatively low. The leadership team may be tempted to devote time and resources to address this. But if the organization is at the Infancy lifecyle stage, it may be wasting time and resources because the higher priority at this stage for continued survival is being action-oriented and opportunity-driven. But the very next stage of the lifecycle, Go-Go, requires the ability to start adding structure and control if the organization is to transition to the next lifecycle stage, Adolescence. Integrating the two models gives you a better picture as to the health and ability of the organization and where to focus time and resources to keep the organization developing.

Integrating the two models can also provide insights as to why an organization may score low on the Involvement capability in the Denison model. At the Go-Go lifecyle stage, the Founder’s ability to “do it all” is reaching its limits. The need to bring in professional managers as well as decentralize decision-making is becoming more and more important. How the Founder views this situation and approaches this transition will play a critical part in moving the organization along its development path. The Denison model can point out the degree of deficiency in this capability and the Adizes model can point out the importance of addressing it.

These are two great tools to have at your disposal to help organizations achieve their full potential.

Wishing on a Culture

2007-08-17T13:05:00.000-05:00

Friday, August 17, 2007

Two situations have unfolded over the past few weeks that either directly or indirectly concern organizational culture. In last week’s posting, I talked about AirTran’s attempt to buy out Midwest Airlines and the changes that would bring to Midwest’s vaulted service culture. As well, Robert Nardelli started his job as the new Chrysler CEO this past Monday and the business press has written much about the drastic changes he may bring to Chrysler to get it profitable once again.

What caught my attention in both of these stories is the idea that a culture is worth fighting for or protecting. I see this as wrapped up in an anthropological view of organizational culture. Anthropologists study cultures, observe behaviors and practices, and identify core beliefs and values that drive these behaviors. It seems to imply that the best cultures are those whose members are most satisfied or happy. In the organization development field, there is a school of thought that believes happy workers in a happy workplace equals company profits. What concerns me about this philosophy is that there is an acceptance that the company’s culture should be democratically-determined, that it can be defined by what we would like it to be or what we are comfortable with. Rather, my experience has taught me that it is the marketplace and its critical success factors that should define a company’s culture. What does the culture need to be in order for the company to compete in its marketplace? Happy workers and a happy workplace environment are not enough to drive profits.

I talked about the Denison model of organizational culture in an earlier posting ("Next Time Call Me," 7/27/07). I think it’s important to view organizational culture through this type of lens because it captures the importance of organizational balance between external and internal focus, and adaptability and stability. We can have a company that treats its employees well but has lost touch with its customers and the changing marketplace. This is not a recipe for success. So it’s not a question of who wins, the employees or the customers. It needs to be both.

In the case of AirTran and Midwest, the resistance of Midwest’s management to AirTran’s offer seemed somewhat tied to a fear of what AirTran would do to the Midwest culture. All of this seemed to open the door for other buyers to enter. Late last week, the private-investment firm TPG Capital said they would team up with Northwest Airlines and beat AirTran latest offer by 25 cents. (Northwest, I think, could care less about preserving Midwest’s culture. They are all about protecting their midwest turf.) Despite having three new board members supposedly sympathetic to the AirTran overture, on Monday of this week, Midwest said it had accepted the TPG offer. Not to be out done, AirTran came back late Tuesday and beat the TPG offer by another 25 cents, offering $16.25 per share. Just today Midwest reported that it will accept a cash offer from TPG at $17 per share.

So is this offer in the best interests of the company, given its many stakeholders? A majority of the Midwest shareholders were ready to sell but the Midwest management insisted that their go-it-alone strategy is superior to becoming a part of AirTran. Midwest customers would probably experience lower fares but with less room and kiss the cookies good-bye. Midwest management would have been out on the street.

But whatever view you take on the business wisdom of this deal, are we aware that in some situations, a desire to hold on to a certain way of doing things can cloud our judgment? Can we fall into the trap that a culture’s preservation can trump what’s good for the business?

Something’s Gotta Give

2007-08-10T16:13:00.000-05:00

Friday, August 10, 2007

Now that I have recovered from my family vacation, I can get to a short blurb I saw in the local paper while out of town. It was an Associated Press wire service news item on Airtran’s possible buyout of Midwest Airlines. It’s short enough that I include here the entire piece:

Exec: Keep Midwest culture, not name

The top executive of AirTran Holdings, Inc. said Wednesday the company would try to keep Midwest Airline’s culture – but not is name – after a proposed buyout. AirTran Chairman and Chief Executive Joe Leonard spoke to journalists in Milwaukee a day after Midwest Air Group Inc. announced a committee of its board would start talks with AirTran and other suitors. Airlines that try to straddle two brands after a merger inevitably weaken both brands and leave consumers confused, Leonard said.

From what I know about Midwest and AirTran (having never flown either airline), AirTran’s business model is low-fare while Midwest’s is high service. Here’s how they describe themselves on their respective websites:

Midwest Airlines:

The minute you walk onto one of our aircraft, you know Midwest is different. Wide leather seats, superior service, chocolate chip cookies baked onboard and competitive fares have helped us earn our reputation as "The best care in the air". Add our Midwest Connect regional service and there's something for both business and leisure travelers alike.

AirTran Airways:

AirTran Airways is a low-fare airline designed for business travelers, offering Business class, new planes with XM Satellite Radio and EasyFit Overhead Bins, assigned seats, and our accommodating frequent flier program A+ Rewards. AirTran Airways' mix of low fares and an affordable Business Class with excellent customer service and one of the world's youngest all-Boeing fleets has continued to strike a chord with the public. People said an airline couldn't be all these things. AirTran Airways’ continued success has proven them wrong.

From a business standpoint it makes a lot of sense for AirTran and Midwest to combine. They share similar aircraft and very little of their routes overlap. But how do their business models compare and cultures, given that Mr. Leonard seems to put somewhat of a premium on Midwest’s culture.

Here’s a concrete example of the similarities and differences between the two airlines. Both extensively use Boeing 717’s in their fleets. Midwest’s seat configuration is four across, all coach class, for a total of 88 seats on board. AirTran’s configuration is five across, except in business class which is four across; twelve business class seats, 105 coach class seats for a total of 117 seats on board. This is 30% more capacity than Midwest for the exact same airplane.

So I’m trying to understand Mr. Leonard’s comment that AirTran would try to keep Midwest’s culture after the buyout. Does he mean its definition of customer service? Because if he is referring to a culture of service, that would come with a price tag. Midwest serves freshly baked cookie while you sit in wide leather seats with only one neighbor next to you. This level of service doesn’t come cheap. But I suspect Mr. Leonard wants to keep the friendly, personal service offered by Midwest flight attendants without the added cost of freshly baked cookies and 30% fewer seats on board.

He was quoted in the Milwaukee Journal Sentinel as stating that AirTran would replace most of Midwest’s wide, two-by-two seats with narrower seats, boosting the amount of revenue generated by each flight. I would assume the cozy quarters would be in steerage, I mean coach class, and not business class. Sound business plan but lousy service or culture-booster. I can’t see how Mr. Leonard can keep the Midwest service culture by making it fit into a low-cost, medium service AirTran business model. Something's gotta give. Southwest has done it but they have a very particular definition of service and even they are re-thinking what they offer to stay competitive, such as assigned seating.

So be clear about what you mean by culture, Mr. Leonard, because it may just involve putting on an apron and doing some baking.

Next Time Call Me

2007-07-27T10:41:00.000-05:00

Friday, July 27, 2007

Timing is everything, they say. Back in April I came across an article in the Wall Street Journal about some of the issues facing Procter and Gamble (P&G) as it works to create the intended synergies between its Crest toothpaste and the Oral-B toothbrushes of recently acquired Gillette. In her article (“Merger Challenge: Unite Toothbrush, Toothpaste”), Ellen Byron describes some of the cultural differences that Gillette people experienced as the business was absorbed into P&G. In one example, language was a distinguishing characteristic of the two cultures:

P&G employees are known for loading their communications with acronyms like CIB (“consumer is boss”), FMOT (“first moment of truth,” or the moment when consumers notice a product in a store) and SMOT (the “second moment of truth,” when they use it). Outside board members use glossaries at meetings, and Ms. Stacy (head of Gillette’s sales to dental professionals and now for P&G) says she needs one, too. “I have it in my briefcase at all times,” she says, pointing to her attaché’s front pocket.

Apparently there were also differences in decision-making approaches:

Mr. Cleverly, (Gillette’s oral-care president and initial head of the merged oral care divisions) used to working under former Gillette CEO James Kilts, also faced adjustments. He balked at what he saw as laborious processes and slow decision making at P&G, say former Gillette employees familiar with the matter. “The cultural differences were real,” Mr. Cleverly says.

These differences may seem somewhat minor, but the problem is that they can start to distract employees from the really important efforts needed to make sure the company achieves the intended benefits of the acquisition. In this case, P&G is very keen on displacing Colgate from its top position in the oral care market and sees the combined Crest and Oral-B product offerings as the key piece to this strategy. It’s human nature for people from both companies to see differences more than similarities in the early months of integration. But if this emphasis on differences is left unaddressed, this mindset can start to take root and becomes increasingly difficult to change as time goes on.

So I wish P&G well in its business integration efforts in its oral care division. But should the process begin to slow down, Mr. Lafley (A.J. Lafley, CEO of P&G), here’s my recommendation on how to integrate the cultures to create a high performance culture that drives business results.

I don’t know of a better tool and process to use than the Denison Organizational Culture Survey. I recently got around to attending a Denison workshop to learn more about these instruments and I came away very impressed and excited by the ways companies, in a variety of situations, could benefit from Denison’s research and surveys. Of course I went into the workshop a bit skeptical – how could someone capture something as intangible as culture? Well, Dan Denison and his colleagues took a different approach over twenty years ago. Rather than trying to capture culture, they instead focused on identifying organizational factors that drive organizational performance, as measured by bottom-line results. Their research confirmed that the following four culture traits and twelve corresponding organizational capabilities have a direct impact on organizational performance:

Mission
• Strategic Direction and Intent
• Goals and Objectives
• Vision

Adaptability
• Creating Change
• Customer Focus
• Organizational Learning

Consistency
• Coordination and Integration
• Agreement
• Core Values

Involvement
• Capability Development
• Team Orientation
• Empowerment

I particularly like the comprehensive of this cultural model (it covers both an external and internal focus, as well as flexible and stable infrastructures) and that Denison has statistically proven that its correlates with bottom-line business performance.

So how could this have benefited P&G when they first started this integration effort with Gillette? It could have shown Mr. Lafley and his management team how the P&G and Gillette cultures stacked up against 10,000 other companies in terms of organizational strengths and deficiencies. Comparing the two companies in this way, we could then identify which company’s culture was stronger in certain organizational capabilities so we could pinpoint the specific areas where culture merging would have the greatest bottom-line pay off. It may not have prevented but it would have blunted the typical “we bought you so you have to be like us” integration mindset often seen in acquisitions.

There’s lots more to talk about here, but for now it’s exciting to know that just as toothpaste and tooth brushes can be made compatible for greater value so too can organizational cultures.

Weight in the Saddle

2007-07-19T12:21:00.000-05:00

Thursday, July 19, 2007

A couple of things in the business world came together for me in the past few weeks.

Back on July 8 I read Paul Brown’s New York Times review of a new book entitled "Finding Midas." The author, Russell Cleveland, is founder of RENN Capital Group, an investment management firm. Using Wall Street investment wisdom of “bet on the jockey, not the horse,” Mr. Cleveland describes the type of chief executive he looks for when making his investment decisions. It is the entrepreneurial C.E.O. that catches his attention, whether or not the person is the founder of the company. “Entrepreneurial management concentrates on seeking new opportunities, trying to fulfill the needs of others,” he writes. “Professional management is mostly about making assets more effective and efficient. Both types of management are important, but in our economy it is the entrepreneurs who create the economic growth and wealth for everyone else.”

Then on July 12, David Kesmodel and John Wilke’s article (“Whole Foods is Hot, Wild Oats a Dud – So Said ‘Rahodeb’”) appeared on the front page of the Wall Street Journal. In case you don’t know, the Federal Trade Commission (FTC) has filed a lawsuit, seeking to block Whole Foods’ takeover of one of its competitors, Wild Oats, on antitrust grounds. The C.E.O. of Whole Foods, John Mackey, has been quite vociferous in defending his company’s strategy and actions. It turns out that the FTC, in a document it made public late on July 10, included a quotation from the Yahoo Finance stock forums. The footnote reads, “As here, Mr. Mackey often posted to Internet sites pseudonymously, often using the name Rahodeb.” (Rahodeb is an anagram of Mackey’s wife’s name, Deborah.)

Given the speed of Internet journalism, by late evening on July 11, Mr. Mackey had posted seven responses to the question “Who is “rahodeb” and why does the FTC quote this person?” on Whole Foods’ website’s Frequently Asked Questions section. His first three answers were:

• I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms.
• I never intended any of those postings to be identified with me.
• The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn’t. Sometimes I simply played “devil’s advocate” for the sheer fun of arguing. Anyone who knows me realizes that I frequently do this in person, too.

Keep in mind that Mr. Mackey posted to Yahoo from 1999 to mid-2006 and only stopped posting because he lost a bet with another correspondent over Whole Food’s stock performance.

Next headline, July 14, in the Wall Street Journal, “SEC Opens Informal Inquiry of Whole Foods CEO Postings.”

Now I have no idea whether his actions violated any securities laws but as a leadership consultant, I find his use of “fun” and “unintentional” to justify his unorthodox actions as reproachable. The smart leader knows that one’s intentions are of no consequence – it is the impact of one’s actions that matter the most. I recognize it must be very difficult for him to separate his identity from the company’s identity, having co-founded it as a college dropout back in 1980. But as can be the case in situations like this one, the moment arrives when it is painfully and publicly clear that the company has grown up but its creator has not.

Then Whole Foods issues the following press releases on July 17:

• “Whole Foods Market’s Board of Directors Begins Independent Internal Investigation Associated with Online Financial Message Board Postings”
• “Whole Foods Market today released the following statement from Co-founder, Chairman and CEO, John Mackey: "I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me."

Sounds like someone got tired of the jockey doing acrobats while riding the $5.6 billion racehorse.

Postscript: Here is a Wall Street Journal video from Friday, July 20 on the Mackey story.

Driving Miss Manners

2007-07-10T12:30:00.000-05:00

Tuesday, July 10, 2007

Leave it to Toyota to come up with another variation on the hybrid theme. In yesterday’s Wall Street Journal, Amy Chozick gives us an inside look at the luxury car buying experience that Lexus is promoting in its Japan market to compete with BMW and Mercedes (“The Samurai Sell: Lexus Dealers Bow to Move Swank Cars”). Lexus has modeled its version of customer service after ancient Japanese hospitality traditions, including its samurai culture and tea ceremony. All its employees attend a three-day training course in the shadow of Mount Fuji to learn how to bow, serve tea, and smile in ways to make the Lexus car buying experience pleasurable and memorable. Needless to say, this is an unusual mix of business strategy, national culture and customer service.

As I thought about this story more, I began to see that this strategy is more than just a variation on customer service. Rather, what Lexus is trying to do is to create a culture of hospitality in the rough-and-tumble automotive industry. And there is a significant difference between customer service and hospitality. Being more transactional in nature, customer service is standard business practice, regardless of how well a company practices it. But hospitality implies ritual, location, and relationship, the sense of welcoming and care. Not exactly words you think of when “dealer showroom” comes to mind.

Clearly this hospitality strategy is in line with tenets of the experience economy. My posting from March 23 (“Jim Gilmore and the Geeks”) talked about some companies who have developed intentional experiences for their customers as a way to either distinguish themselves from their competitors or offer value-added features or both. I talked about the importance of authenticity if an experience is going to avoid the gimmick trap. With this hospitality approach, Lexus is coming close to blurring the lines between service and ritual. Since rituals usually involve an acknowledgment or honoring of some sort of significant life event or experience, Lexus may need to seriously look at how far they want to go down this path. To what degree does buying a Lexus in Japan signify an accomplishment or life passage? Would this only apply to first-time Lexus buyers, who have truly “moved up” in status and buying power that they can now afford a Lexus? We all grew up on the notion of cars as status symbols. How could Lexus use the ancient hospitality philosophy to take this reality to the next level? And why couldn’t Lexus apply this approach in the U.S.? Though the practices and ritual are not of American origin, the Japanese version of the hospitality tradition has the chance of striking a chord with a particular luxury car buyer – the acknowledgement that this purchase represents a major personal accomplishment. Combine this with a “ceremony” that is dignified, refined, and rooted in 700-year-old traditions and you can create one powerful and emotional connection.

Now I’m not advocating that the Big Three automakers copy Lexus’ hospitality strategy. But it wouldn’t hurt them to re-examine the entire buying experience through the eyes of the consumer. Otherwise, an old saying (ichigo ichie) from the Japanese tea ceremony may prove to be prophetic…

Treasure every encounter with another person, because it may never happen again.

Culture in the Clouds

2007-06-27T15:14:00.000-05:00

Wednesday, June 27, 2007

It was only a matter of time for this true confession moment to arrive. I am a commercial airline junkie. Despite never having worked for an airline or the likelihood that I ever will, I love reading about the airline industry. So you can imagine what a thrill it was when I won in a silent auction a few years back a session in the America West (now US Airways) flight simulator in Phoenix, Arizona. Yes, I flew an Airbus 320 (I need to work on my landings).

So Susan Carey’s interview with CEO Dave Barger in the June 21 issue of the Wall Street Journal (“Changing the Course of JetBlue”) naturally caught my attention. I was curious to hear what he had to say, having been recently promoted to CEO and being there during JetBlue’s operational meltdown in February.

His comment that caught my attention was his response to the question about the likelihood of airline consolidation.

WSJ: Will the long-predicted consolidation of the airline industry ever happen?

Barger: I truly believe it will. Take a look at the auto industry and the steel industry and these other maturing industries and one can’t help but be led to a conclusion that there will be consolidation. How many alliance carriers do you need to go from A to B? How many domestic brands do you need? But how do you merge cultures? That seems to be the lone question that never has been answered adequately. You can merge operating certificates and facilities and fleets and the infrastructure. But even if a merger makes sense, there isn’t enough creativity to say, “Listen, how are we going to make the cultural side of the equation work?”

Even for a culture aficionado like myself, Mr. Barger’s comments on the blending of cultures being a key business challenge jumped out. This thought stayed with me as more articles came out the past few days about Northwest Airlines rash of cancellations, apparently due to pilot availability. The pilots are blaming management for not hiring back enough pilots to cover the busy summer travel season and management saying it’s pilots not showing up for work. Since I live in the Detroit area, I am unfortunately beholden to Northwest for my travel needs. And it ain’t pretty. They recently came out of bankruptcy, having slashed $2.2 billion in annual operating costs, with 60% of the savings coming from reductions in employee wages, benefits, and work rule reductions. And it shows. I would venture to say that very few people on a Northwest plane want to be there.

Then I read Melanie Trottman’s article in today’s Wall Street Journal (“As Competition Rebounds, Southwest Faces Squeeze”) about some radical changes Southwest Airlines is contemplating as it decides how best to compete with the legacy airlines (such as Northwest) who have lower costs as a result of going through bankruptcy. Here’s the quote that stood out for me:

Southwest, which prides itself on being employee-friendly, is one of the only airlines that has not sought wage or benefit concessions from its workers. The airline characterizes its work force as ultraproductive and pleasant to passengers. If management seeks pay cuts, it risks alienating employees who Mr. Kelly (CEO) calls the airline’s “greatest weapon.” Mr. Kelly says he’d consider pay cuts a “management failure.”

Southwest knows that an employee-positive culture is an investment, a savings account you add to in both the good and bad times (Southwest didn’t lay off anyone after 9/11) so that when you need to go to the employees and ask for greater effort in service or cost reductions, they are more likely to make the necessary sacrifices to stretch the company dollar. Contrast that with Northwest’s approach. They busted one of their unions during bankruptcy. It solved a short-term problem and obviously helped to keep the airline aloft. But at what price? Long term they have a significant employee relation problem – pilots who will only do the minimum required. I don’t know about you, but when was the last time a commercial airplane flew without a pilot?

Which brings me back to Mr. Barger’s comment. Imagine trying to merge the cultures of Southwest and Northwest. I think I need some Dramamine.

Post-script: As I was writing this column, up pops an email from Crain’s Detroit Business with the headline, “Tell Us Your Northwest Problems.” Excuse me while I take this call.

What Comes After (in Business)

2007-06-19T12:07:00.000-05:00

Tuesday, June 19, 2007

Two recent articles got me thinking about the life cycle of companies and business in general. Neal Boudette’s article in yesterday’s Wall Street Journal (“Detroit Confronts Surplus of Showrooms”) and David Gross’ guest column in the June issue of Inc. (“The Truth About Investment Bubbles”) both allude to the fact that death is as much a part of the business world as the living world. Couple this with the fact that most religions believe that death is not the end of the line, that there is some type of re-birth that occurs, you can find yourself in a philosophical discussion that has real business ramifications.

In the case of the saturation of Big 3 dealerships left over from their heydays, Boudette points out in his article that it’s not so easy to pull the plug on a dealership. Given state laws that protect franchisees, some of these smaller dealerships can hold on for some time. Boudette describes one Lincoln-Mercury dealership in southern California (average sales of 20 to 25 cars a month) that turned down a buy-out offer from its Toyota competitor down the street. “But Mr. Mayberry, 58 years old, said no thanks. His father had bought the business in 1961, and he does enough business between new-car sales, used cars and service to make a profit and pay his salary and those of his two brothers and employees.” I’m sure from Ford’s perspective, it would be better if Mayberry Lincoln-Mercury closed up shop. And maybe it is time for it to die. But as long as it is making a profit, as long as it is still breathing, why bring it to a premature death? But the longer it is alive and diluting the local auto market, the greater the drain on Ford.

Gross talks about how major investments in infrastructure over the past 150 years has sometimes led to short term death but long term growth. The over-building of such things as telegraph lines, rail lines, and fiber-optic cable created the possibility that some players would not survive the shakeout. But those that did or those that built on this inexpensive infrastructure were able to create new businesses in a cost-effective manner. So just as we benefit from the fossils left behind of dinosaurs long gone, so do businesses build and succeed on the skeletons of over-built infrastructures. Nothing ever disappears completely.

Sometimes what needs to die in order for a re-birth is the death of a myth or self-perception. Some companies have such a storied history that when the present starts to pummel them, they cling to the past and its finely tuned myths. The company may not need to die but how its stakeholders view its past, present, and future may need to die off. We can only begin to let go of the past if we believe that something good and new will rise from the ashes. Something always comes after.

Laptop Dip

2007-06-05T18:35:00.000-05:00

Tuesday, June 5, 2007

Last week I attended an event featuring Seth Godin, the marketing guru and author of such books as Purple Cow, Permission Marketing, and Small is the New Big. (Apparently he is B-I-G on the West Coast.) He was in Ann Arbor as part of the book tour for his latest, The Dip: A Little Book that Teaches You When to Quit (and When to Stick). His argument is that successful people (and organizations) quit all the time. They succeed because they know when to either quit or push through what Godin refers to as “the Dip” – the point in the process where things get really tough and you start to question why you’re even in this. They also excel in recognizing and abandoning efforts that are headed for a dead-end -- “the Cul-de-Sac” in Godin-speak.

Which brings me to the news from late May that Dell will start selling two desktop PCs in Wal-Mart and Sam’s Club starting this Sunday. So Dell is going retail, into the heart of Hewlett-Packard territory. The two have battled it out for some time as to who will be the world’s largest PC company. As I understand the story, a few years back, Dell’s direct sales model (you order and customize your PC online and it is shipped to you directly) was kicking H-P’s retail model, primarily on price. H-P decides to play the Dell game and tries to compete on price, laying off employees to get the low cost structure that Dell can achieve through low inventories, since they make PCs only on demand. H-P starts to lose big. Out goes CEO Carly Fiorina and in comes new CEO, Mark Hurd. About this time the laptop revolution starts to kick in and more buyers gravitate to retail locations where they can check out the look and feel of the laptop. At the same time H-P gets its internal operations in order and yesterday the Wall Street Journal publishes an article entitled “How H-P Reclaimed Its PC Lead Over Dell.”

So here’s where “the Dip” comes into play with Dell. Mr. Godin points out that “the stupid thing to do is to start, give it your best shot, waste a lot of time and money, and quit right in the middle of the Dip.” Even though Dell says this is the first step in a broad, global retail push, it seems like a weak first step. Let’s face it, Wal-Mart and Dell? If you’re going retail, you got to go with Target. And it’s only two models of desktops. (I thought the laptop market is where the action is nowadays?) From an organizational culture standpoint, Dell needs to live-and-breath retail, something that doesn’t happen overnight. In the process, Dell will need to relax the “direct sales dogma” that has brought them much success. In an email to employees a few months ago, Michael Dell stated that “the Direct Model has been a revolution, but it is not a religion.” I suspect many within Dell found the statement to be heretical – the Direct Model has been their Holy Grail of competitive advantage for some time. Some say “you can’t serve two masters” and Godin the Oracle says “you really can’t try to do everything, especially if you intend to be the best in the world.” Seth, do you want to be the one to tell Michael Dell you can have a Dip on the way to a Cul-de-Sac?

Taking Transformations Private

2007-05-29T15:20:00.000-05:00

Tuesday, May 29, 2007

The news that a private equity firm, Cerberus Capital Management LP, is taking Chrysler off of DaimlerChrysler’s hands is intriguing me more and more, particularly after I read Orit Gadiesh and Hugh MacArthur’s article (“Growing the ‘Private’ Club”) in the May 25 issue of the Wall Street Journal. In it they explain why private equity “is becoming a benchmark of performance for CEOs and boards of directors.”

Despite the little I know about the private equity world, I still suspect that we organization development (OD) types could learn a thing or two from their investment and management models as we go about helping our companies and clients reach their potential.

Here’s my limited understanding of the private equity model. They go after public companies that they consider to be under-valued, take them private by buying all the outstanding shares (and taking on a significant amount of debt), clean up the business by focusing on the key business or businesses that will drive value, thereby transforming the company into one with a clear value and growth strategy. Then they take the company public again to reap the financial rewards of a sought-after stock in the public investment market. I would assume one of the reasons why there is so much money in the private equity world is that the model usually generates big returns on investment. As Gadiesh and MacArthur point out, “from 1969 to 2006, the top quartile U.S. private-equity funds had annual rates of return ranging from an average of 39% to well over 200% through good times and bad.” I don’t know about you, but that pretty much beats my CD.

Here’s what I think we can learn (or be reminded of) by the success of most private equity transformations:

1. Focus on value – I can’t imagine how a management team could deliver such legitimate returns without a laser sharp focus on what is the value proposition for this business and proceed to cut, trim, re-deploy and invest resources in such a combination as to maximize value.
2. Discipline – Plenty of public companies have assets on the books that have little to do with its core business. Too many companies fall for business opportunities that have little to do with their espoused value proposition. Others get tangled in the “build it and they will come” mentality. My guess is that these private equity management teams have the discipline to avoid temptation and fantasy.
3. Transform to the market, not utopia – if we’re not careful as OD professionals, we can lose sight of what’s really important and spend too much time and money on employee satisfaction surveys and 360 feedback and other types of “temperature checks”. Our main focus with our clients should be “what changes need to occur to ensure we can execute our business model that is designed to deliver value to our shareholders and customers.”

Keep an eye on these folks. If they pull off a Chrysler miracle, it’s a whole new ballgame.

Sprechen Sie "Engineer?"

2007-05-22T11:35:00.000-05:00

Tuesday, May 22, 2007

The Wall Street Journal ran an interesting article ("SAP's Plan to Globalize Hits Cultural Barriers") back on May 11 by Phred Dvorak and Leila Abboud about the efforts going on at SAP (the German software engineering company) to globalize its technical workforce.

A number of things caught my attention as I read the story.

In my March 9 posting, I talked about how one can describe and understand corporate cultures through the lens of behavioral styles. In the SAP Story, the clash between Shia Agassi (we'll assume he represents the Driver culture - started four companies by age 24) and the German programmers (we'll assume they represent the Analytical culture -- took a year or more to hone programs) is a classic struggle between speed and quality, which are not natural allies. But the important thing to consider is that if either side "wins," SAP loses. Here's why.

If the Driver side wins, a SAP product will get into the market faster but may experience quality glitches that undermine its credibility and drive its customers to its competitors who have comparable products with better quality. If the Analytical side wins, the products will be technically sound but will most likely be late to market or outdated from an innovation or customer requirements standpoint. The trick for SAP, or any other technology company, whether they are in software or pharmaceuticals, is to find the right balance between responding to market pressures for faster release of products and ensuring quality. It can take a company and individual members a long time to realize that both, speed and quality, are needed in most markets today.

Adding to this dynamic is the fact that five German IBM engineers founded SAP. I don’t know about you, but when I hear the words “German, “IBM,” and “engineer” spoken in the same breath, words like “precision,” “methodology,” and “quality” take on a whole new dimension. I think it’s safe to say this history has embedded an engineering mentality deep within SAP’s DNA. What implications does this have for SAP’s business? Well, for one thing, engineers tend to view suspiciously any argument for speeding up a process. They understand making a process more efficient but they don’t “get” doing it faster because quality is bound to suffer. An engineering mindset also tends to want to build a complete and thorough version of whatever product they are working on, often because they are capable of including additional features and of course there is the “cool” factor to consider. This can lead to really cool products that the customer finds too complicated or irrelevant.

Another piece to this puzzle is what work SAP leaders assigned to which global center. Palo Alto handled the products’ look and feel (sounds glamorous and high visibility); India specialized in analytical tools (sounds like this could be cool); Walldorf (Germany) managed hard-core coding. The little I know about the assembly line culture of software development tells me that hard-core coding responsibilities aren’t glamorous or career-advancing roles, particularly when compared to project management roles. So on top of all this change, the German programmers got the grunt work (somebody tell me if I’m off base here). Keep in mind as well, these are programmers who take a great deal of pride in their national and personal reputation as engineers. As one German developer commented about the Hercules project, “it’s not ‘good, old German engineering.’”

So what’s my pithy advice to SAP?

1. Educate everyone in SAP on the external environment – rapid advances in technology demand innovation and adaptability if SAP is to compete effectively.
2. Focus on the customer and their needs. Just because you can build it doesn’t mean customers will spend money to get it.
3. Experiment with finding the right balance between speed and quality. Learn where speed will compromise quality and where it won’t. Understand as a Driver or Analytical style person that one’s predisposition to a particular way of doing things doesn’t make it right in every situation.

Most of all, viel glück!

Splitting Hairs Over Culture

2007-05-15T07:55:00.000-05:00

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.

What’s My Metaphor?

2007-05-08T10:10:00.000-05:00

Tuesday, May 8, 2007

I recently attended a colleague’s PhD dissertation defense in the field of organizational behavior. It occurred to me during his discussion that one’s take on the nature of organizational culture is influenced by the metaphor one uses to define and conceptualize something as intangible as culture.

As I listened to his presentation and the questions his academic committee members asked of him, the picture of an organization as a machine emerged. The talk had a certain mechanistic quality to it, along the lines of “this isolated intervention had this type of response.” Very “cause and effect.” The more I reflected on this metaphor, the more I thought about how viewing an organization in these terms would influence how you approach “fixing” an organization’s culture. Because if someone views an organization as a machine, that would imply that someone or something has built this culture, has constructed it. Something constructed has inter-connecting pieces so if an organization’s culture is in need of fixing, some pieces or their connections must be broken and in need of repair.

With this type of metaphor, the change agent takes on the role of social engineer – tinkering until the right interventions cause the desired effects. And because we know humans are not machines, we can subconsciously separate ourselves from the machinations of an organization’s culture. We end up having an externalized relationship with the culture and the nature of any relationship can be captured on a scale that has “what we do to it” on one end and “what it does to us” on the other. And once something is external to us, it is that much easier to blame, judge, or question the other.

But if one’s metaphor for an organization’s culture is an organism, then one looks at an organization’s culture through different lens. An organism implies an intricacy and inter-dependency that challenges the notion of isolating particular cause-and-effects. An organism is in intimate contact with its external and internal environments and its dynamic is more ebb-and-flow than action-reaction. It operates on many different levels – chemical, emotional, psychological, biological. With this metaphor, an undesirable state of affairs is less about something being broken and more about something being out of balance. Since we as individuals are organisms, the culture-as-organism metaphor would imply that an organization’s culture is an extension of us, a reflection or perhaps even a magnification of the collective individuals, warts and all.

In this case, the change agent’s role is one of physician, and specifically, general practitioner -- someone who takes a holistic approach to understanding and addressing the issues that have caused an imbalance in the “body corporate.” It involves listening to where the ailments are located and exploring until they surface the imbalances. A change agent who sees through this frame of reference would most likely be aware of the existence and significance of iatrogenic ailments -- those induced in a patient by a physician’s words or actions. Such a change agent would appreciate how any intervention by them would have repercussions in the organization, sometimes far beyond their sight or reach. There is no divide between the change agent and the culture – at most it is a step back to gain perspective.

I’ll leave you with some simple questions to ponder: machine or organism, engineer or physician, broken or imbalanced? How do you “see” an organization?

Mapping the Dynamics of Change: Is Time on Your Side?

2007-05-01T18:57:00.000-05:00

Tuesday, May 01, 2007

I am going to pick up on an earlier posting of mine about mapping out all the many dynamics of organizational change. This posting will look at how time orientation is part of the dynamics of change. As with the earlier posting, I welcome your additions to this list.

Past

- The myths and stories that surround the founding of the company.
- The degree to which these myths/stories compare to the real story of the company’s founding.
- Who are considered the heroes of the founding story.
- The degree to which the company’s founding is characterized as the result of one person’s effort vs. a team effort.
- The common understanding of why the company was successful in the past.
- The degree to which the past is considered the “good old days” or “the golden age.”
- How failure in the past is characterized.
- The degree to which failure in the past was attributed to external vs. internal circumstances.
- The degree to which the Board of Directors is seen as contributing to events in the past.
- The degree to which employees still hold a grudge over decisions made in the past.
- The degree to which middle managers still hold a grudge over decisions made in the past.
- The degree to which senior leadership still hold a grudge over decisions made in the past.
- The degree to which the unspoken opinion is “our best days are in the past.”
- The degree to which previous change was managed well.
- The degree to which employees believe “the past is prologue.”
- The degree to which middle managers believe “the past is prologue.”
- The degree to which senior leadership believe “the past is prologue.”
- What are considered “skeletons,” where are they “buried,” and who knows the answers to both?

Present

- The degree to which employees see themselves as victims of the changing external environment.
- The degree to which middle managers see themselves as victims of the changing external environment.
- The degree to which senior leadership see themselves as victims of the changing external environment.
- The degree to which employees acknowledge the current change.
- The degree to which middle managers acknowledge the current change.
- The degree to which senior leadership acknowledge the current change.

Future

- The timeframe in which employees expect the current change to slow down or go away.
- The timeframe in which employees want the current change to slow down or go away.
- The degree to which employees believe more change is in the foreseeable future.
- The timeframe in which middle managers expect the current change to slow down or go away.
- The timeframe in which middle managers want the current change to slow down or go away.
- The degree to which middle managers believe more change is in the foreseeable future.
- The timeframe in which senior leadership expect the current change to slow down or go away.
- The timeframe in which senior leadership want the current change to slow down or go away.
- The degree to which senior leadership believe more change is in the foreseeable future.

There are too many variables to think about. I need to take a break.

The Culture Matrix: Part 2

2007-04-27T13:50:00.000-05:00

Friday, April 27, 2007

My blog from this past Tuesday introduced you to Marc Chouinard and his Culture Matrix process. Marc shared with us the two main factors that often are overlooked in any change initiative:

Revealing and understanding the real “living” culture of the organization;
Revealing and understanding the forces that will support or hinder the change initiative, called Performance-Drivers and Performance-Drains.

He gave us the low down on the living culture on Tuesday. Ready to get smarter? Let's go...

Performance-Drivers and Performance-Drains are culture dynamics we can reveal when we access the real, living culture (RLC) of an organization. He defines the RLC of an organization as “the coming together of what people believe they need to be and do to be successful in the particular context of their organization—the coming together of the workforce’s conscious and unconscious behaviors drivers.”

Culture elements come in pairs of contrasts.
Let’s imagine that your organization goes through a traditional culture assessment that includes the following statement: “working hard increases my opportunities within the organization.” Let’s say for the purpose of this exercise that the predominant answer to this question by your organization’s workforce is “Strongly Agree.” This means that your organization has an “assessed” culture of “working hard.”

Now, what does the concept “working hard” mean? From the angle of the RLC of your organization, the best way to define a culture element is to define its contrast. So, what is your contrast to the concept “working hard?” You can answer this question by asking yourself: “If I am not working hard, what am I?” The answer is the contrast.

Now imagine that I am asking this same question to each employee of your organization. Employees may say that the contrast of “working hard” is “being lazy” or “working smart” or “having a balanced work/life,” or anything else for that matter. The reality is that the answers will cover a wide spectrum. It is in these answers that lay the Performance-Drivers and Performance-Drains of your organization. The contrast of a culture element defines a “force” that is either supporting or hindering your organizational objectives.

What the contrasts say about your employees
The contrasts to “working hard” say a lot about your workforce. They:

reveal how the owners of this pair of culture element contrasts perceive the world around them;
define the multiple sub-cultures of your organization (in this case in regards to the “working hard” culture element); and
define the targeted change strategies that change agents need to ensure sustainable change.

Let’s go a little deeper with these contrasts.

“Being lazy”—this contrast says that the employees forming this sub-culture are hard workers. They tend to do a lot and feel good when doing a lot. They may also be very inefficient, because their measure of success is the amount of work they are doing or the amount of time they spend at the office, rather than the results they are generating.

“Working smart”—these employees tend to be result-oriented. They value efficiency. One of their measures of success is the ability to produce results within a regular or reduced schedule. They tend to judge the “being lazy” contrast employees as being inefficient or disorganized. On the other hand, because they are not working long hours, they tend to be judged by their “being lazy” colleagues as being lazy, because they are not working long hours.

“Having a balanced work/life”—these employees value their personal time and their activities outside their work. They tend to work regular hours and perceive “long hours” workers as having no personal life and as being workaholics. Their “being lazy” colleagues or managers often perceive them as being lazy or lacking ambition.

Performance-Drivers and Performance-Drains
You can see that “working hard” can be a Performance-Drain for your organization. It can lead to:

The “being lazy” employees spending a lot of time at the office, without necessarily being productive.
The “working smart” employees being frustrated and disgruntled because they are not recognized and rewarded for the results they are generating because they are not spending long hours at the office.
The “having a balanced work/life” employees being de-motivated because they realize that their choice of lifestyle will prevent them from growing within the organization.

Conclusion
As you can see, it is the contrasts of “working hard” that define it. Each of the three contrast-based definitions carries very different and sometimes opposing meanings, values and perceptions. In this regard, each individual subconsciously gauges his or her level of “working hard” against their particular contrast and concludes to what degree their behavior will make them successful or not within their particular organization.

As Marc points out, if you don’t know these extremes, you can’t formulate a change plan that will work. This is because your workforce may agree “at the rational level” and diverge “at the subconscious level”—where behavioral drivers and motivators rule. That’s why we have organizations where everyone says the right thing and all are in agreement and still have zero alignment on what actions to take.

The Culture Matrix, through this multi-layered approach, dramatically increases the speed, the ownership and the sustainability of the change effort. It gives you access to the core of people’s subconscious drivers and motivators. As a change agent it allows you to target your communication and change efforts to the specific sub-cultures of your organization, using their own words. Very cool.

The Culture Matrix

2007-04-24T08:10:00.000-05:00

Tuesday, April 24, 2007

I finally got around to talking with a colleague-once-removed of mine, Marc Chouinard, about his process for effecting cultural and organizational change. I think his approach has a great deal of merit, precisely because it targets uncovering the subconscious “frames of reference” that drive individual actions, decisions, and interpretations during any change effort. I think this “in the trenches” approach is a critical component of any change strategy. So let me try to give you a summary of Marc’s process, The Culture-Matrix.

From Marc’s perspective, there are two main factors that, most of the time, leaders overlook in any change initiative, but that make all the difference in the success and sustainability of the change initiative. These factors are:

Revealing and understanding the real “living” culture of the organization;
Revealing and understanding the forces that will support or hinder the change initiative, called Performance-Drivers and Performance-Drains.

This blog will focus on the first point. I will cover the second point in a subsequent blog.

Revealing and Understanding the Living Culture of an organization

Let’s start by defining what the real “living” culture of an organization is. It is the coming together of what people believe they need to be and do to be successful in the particular context of their organization. In other words, it is the coming together of the workforce’s conscious and unconscious drivers of their behaviors.

One of Marc’s clients, in a moment of personal epiphany, does a great job describing the “living” versus “assessed” culture of an organization -- “there’s a big difference between having an opinion on something and being driven by something.”

“Having an opinion on something” refers to culture assessment questionnaires which ask a series of “opinions” to the members of an organization in order to define the culture of the organization. Marc’s client continues:

It’s okay to have an opinion about the presence or absence of a culture element, but it doesn’t tell you if this culture element dictates day-in and day-out your perceptions, decisions, behaviors, judgments and the ways you react to your environment. If you would have asked my employees if customer satisfaction is important for our organization, they would have answered a resounding YES! Yet, when you look at what motivates a great proportion of them on a daily basis, you find what is critical in their mind to be successful in their role in our organization is to solve problems.

As we all have experienced when talking to a customer support organization when experiencing problems with a product or service (computer, insurance plan, car problem, etc.), the solving of our problem is only one factor that influences our satisfaction as a customer. Other factors can be, based on our personal preference, the friendliness and helpfulness of the representative, being clearly explained the steps that will happen to solve the problem and identifying who are responsible for each step.

In the case of the organization of Marc’s client, the customer support personnel focus on “solving problems” because they believe that is what will make them successful within their organization. So their interpretation of what it means to “make the customer satisfied” (the assessed culture) is “solving the customer’s problem” (the real living culture of the organization). Having the assessed culture of your organization tells you nothing about the “living” culture or your organization.

It is important to know the living culture of an organization because it:

tells you what your employee and managers focus on to realize the objectives of your organization;
defines the code of conduct (both formal and informal) that your employees are following.

The Culture-Matrix reveals the living culture of your organization. It is a guided individual interview process that takes place in groups of ten employees where each individual works individually and privately. Contrary to culture assessment questionnaires, the Culture-Matrix does not suggest specific culture elements: it reveals the culture elements that are present and in the words of the employees. This process takes between two to three hours per group of ten employees.

No questionnaire, no personality instruments, just good, hard investigative work “in the trenches.” I don’t know about you but I like getting my hands dirty when it comes to cultural and organizational change.

Coming up next, Performance Drivers and Performance Drains.

Mapping the Dimensions of Organizational Change

2007-04-22T12:14:00.000-05:00

Friday, April 20, 2007

You can’t talk about organizational culture without eventually getting around to talking about organizational change. So in the spirit of recent Herculean mapping projects, such as the Human Genome Project and the mathematical structure known as E8, I am going to start by laying out all the different dimensions I know of when it comes to organizational change. I invite others to join in and add dimensions that I miss (the E8 project included 18 mathematicians using their super-computers to lay out a 453,060 x 453,060 matrix). To keep this effort somewhat manageable, I’m going to tackle one dimension or continuum per post. Let’s start with the role that the external environment plays in organizational change.

Dimension: External Environment

• the degree of force (speed, impact, rate, and breadth) of external changes.
• the degree to which the organization’s competitors are making changes in response to the outside forces.
• the degree to which the senior leadership attaches importance to a competitor’s actions.
• the degree to which the media are characterizing the external environment and the quality of the various organization’s responses to date.
• the degree to which the organization is physically located to the source of the change.
• the degree to which the Board of Directors (both individually and collectively) is:
• paying attention to these forces;
• using data, anecdotal evidence, or intuition to characterize the external environment;
• attaching importance to these forces;
• taking these outside forces seriously;
• concluding these outside forces require the internal organization to adapt;
• communicating its assessment of the external environment to senior leadership.
• the degree to which the shareholders (both individually and collectively) are:
• paying attention to these forces;
• using data, anecdotal evidence, or intuition to characterize the external environment;
• attaching importance to these forces;
• taking these outside forces seriously;
• concluding these outside forces require the internal organization to adapt;
• communicating its assessment of the external environment to senior leadership and the Board of Directors.
• the degree to which senior leadership (both individually and collectively) is:
• paying attention to these forces;
• using data, anecdotal evidence, or intuition to characterize the external environment;
• attaching importance to these forces;
• taking these outside forces seriously;
• concluding these outside forces require the internal organization to adapt;
• making plans to respond to these forces;
• concluding which parts of the organization need to change and how quickly.
• the degree to which middle management:
• buy into senior leadership’s assessment of the external forces;
• trust the analysis and judgment of senior leadership.
• the degree to which rank-and-file employees:
• understand the external forces and their potential impact on the organization’s future success;
• believe these forces will have the consequences that senior leadership has spelled out;
• trust senior leadership’s judgment and assessment of the external environment;

Future postings will cover a different dimension of change. Maybe together we’ll be able to pull off this Dynamics of Change Mapping Project after all.

Leading Change -- This Fall on ABC

2007-04-17T19:24:00.000-05:00

Tuesday, April 17, 2007

The April issue of FastCompany has an article on the change effort going on at the F.B.I. (“Mission Impossible?”) and I think it’s worth checking out. The bottom line is that in our post-9/11 world, we need the F.B.I. to be an organization that focuses on preventing terrorism and not just tracking down the perpetrators after the crime occurs. It has to move from a reactionary culture to an anticipatory culture. What makes this change particularly challenging is that it’s not just about “how” the F.B.I. goes about fulfilling its mission – it’s about its mission as well. In other words, the F.B.I. is going through both a business model change (from criminal investigations to counter-terrorism) and an operational change (from narrowly-focused investigations to a broad, coordinated strategic approach to countering terrorist acts). The article wasn’t too optimistic about the organization being capable of making such a change:

People who know the F.B.I. best – including many who’ve spent their careers there – would say that its culture, leadership philosophy, and links to the political arena make major change in “the bureau,” as it is also known, highly improbable. It is, they argue, just too entrenched, too bureaucratic, too rigid, too old, too slow to understand, and execute the scale and sweep of change that needs to happen.

This is sounding like one dumb dinosaur. Not good for them, not good for us.

This resistance to change, given all the implications to the bureau’s future and our country’s security, got me thinking. One thing I suspect is a factor in people resisting change is our natural, human tendency to treat the unknown or unfamiliar with skepticism or downright hostility. When we are not in control of a situation, when the external environment imposes change on us against our will, we naturally imagine the worse and spend considerable time and energy fixating on the negative in all its permutations. Our imaginations kick in and we come up with all sorts of dire implications to the change. We love horror films because our instinct toward self-preservation has wired our imagination to see the worse and respond accordingly. We can’t see any other possibility unless someone shows us a different story, a picture of what the new world would be like. Something that visualizes and describes “a day in the life of…”

But if people can use their imagination for the worse, then we can tap into that same imagination to image the future. Why not use the power of our imagination and show people an F.B.I. that is working and acting in the way it needs to as a counter-terrorism organization? And who best to show us this different F.B.I. than Hollywood? Yes, it’s time to bring back “The F.B.I.,” the TV series. (In case you weren’t around, “The F.B.I.” was a very popular TV series on ABC from 1965 to 1974.)

Too farfetched of an idea? Well, I direct my skeptical reader to Master Schein’s discussion of the importance of establishing “temporary parallel learning systems” as part of any transformational change effort. In his own words:

If, however, senior management recognizes that elements of the culture have become dysfunctional, then it must launch a transformational change program and create a management process that makes such deep change feasible. The actual change activities will vary according to the situation, but almost all such programs involve creating a temporary parallel learning system in which some new assumptions are learned and tested. It is too painful to give up a shared assumption in favor of an unknown substitute. If some part of the organization can learn an alternative way of thinking, and if the alternative can be shown to work, then there is less anxiety as the alternative is gradually introduced into the main part of the organization. The trial and error in the temporary parallel system creates some of the necessary psychological safety by providing role models for new ways of thinking and behaving. (The Corporate Culture Survival Guide, p. 130-131)

So why not have a TV series serve as a temporary parallel learning system? What better way to make the new way concrete and tangible? So Hollywood, show all of us what the new F.B.I. could and should look like. Stretch our imaginations. Show us it is possible. Take us inside the drama of counter-terrorism but also organizational change – a drama many of us know only too well. Show us the patriotism of those going against their self-interests for the good of our country. But keep it real and not the fantastic nature of 24 so people can buy into it. And make sure Harrison Ford gets the big role. No one plays tough and vulnerable quite like Mr. Ford. And my vote for the name of the series is Today’s F.B.I. Leading change, sixty minutes at a time. I think it’s long overdue.

Indirect Flight to Ford

2007-04-14T14:29:00.000-05:00

Friday, April 13, 2007

A couple of months ago I had a great conversation with a local colleague about the news of Ford Motor Company naming Alan Mulally as its CEO. In case you didn’t follow this story when it first came out, Alan Mulally was the head of Boeing’s commercial aircraft unit. Many credit him with spearheading the successful development of Boeing’s innovative new aircraft, the 787 Dreamliner.

My colleague has worked for both Ford and Boeing and had some very interesting insights into what may have gone into the selection of Mr. Mulally at Ford. Here are some things to keep in mind:

• Boeing and McDonnell Douglas merged in 1996, forming the current Boeing.
• The first CEO of the merged Boeing-McDonnell Douglas enterprise was from the Boeing side (Phil Condit). His replacement was the former McDonnell Douglas CEO, Harry Stonecipher.
• Condit resigned in December 2003 in response to the Pentagon-Boeing contract scandal.
• Stonecipher resigned in March 2005 as a result of violating the company’s code of business conduct stemming from a relationship the married, 68-year-old Stonecipher had with a female Boeing executive.
• Alan Mulally was passed over twice (2003 and 2005) for the Boeing CEO job.
• Jim McNerney, Jr., CEO of 3M, was named CEO of Boeing in June 2005 (had been a Boeing director since 2001, had not worked for either Boeing or McDonnell Douglas).

What my colleague shared with me is both the Boeing and McDonnell Douglas cultures had self-imposed nicknames and the two couldn’t have been more different. The Boeing guys called themselves “the boy scouts” and the McDonnell Douglas guys called themselves “the mercenaries.” (I guess from too many brutal negotiations with Pentagon procurement officers.) Isn’t this a great contrast in style and perception? Business Week alluded to this difference in 1998 in an article about the post-merger woes Boeing was experiencing at the time:

Part of the problem is the culture clash at the top, says Jon B. Kutler, president of Quarterdeck Investment Partners Inc., a Los Angeles aerospace investment bank. Stonecipher, who spent 26 years at General Electric Co., built a reputation there and at McDonnell Douglas as an aggressive, cost-oriented executive. Woodard and Condit, two career Boeing vets, come from a tradition that stresses more collaborative problem-solving.

It seems that Condit and Stonecipher embodied these cultural differences perfectly. Here is an excerpt from a New York Times article from December 2003 after the Boeing board fired Condit for the Pentagon contract scandal and installed Stonecipher as CEO.

Mr. Stonecipher is not likely to copy the tactics of Mr. Condit, who once hired a poet and summoned senior managers to his house, where he urged them to write down negative statements about the company, then burn them in a bonfire to banish the unhelpful vibrations.

I looked it up in case you’re interested -- “collaborative problem solving” and “symbolic burning of negative vibrations” don’t qualify for Boy Scout merit badges. Even so, such behaviors are not going to be taken seriously by a culture reflected in the following leadership style:

Stonecipher's jowly, grandfatherly looks belie a blunt-talking, demanding nature that can alienate those around him. The 67-year-old son of a coal miner has earned millions of dollars piloting aerospace companies through turbulent times. He slashes jobs in downturns, pulls the plug on weaker businesses and pushes out executives who fail to deliver financial results. His e-mails arrive in all capital letters.

He came to Boeing after its 1997 merger with McDonnell Douglas Corp., where he was CEO. He said the changes that followed the merger made him a "lightning rod" for employee discontent. "When people say I changed the culture of Boeing, that was the intent, so that it's run like a business rather than a great engineering firm," he said. "It is a great engineering firm, but people invest in a company because they want to make money."

That Boeing's future rests with Stonecipher angers some current and former Boeing workers. They blame the McDonnell Douglas legacy for the ethics scandals and question whether an unrelenting focus on results prompted some employees to feel they had to succeed at all costs. None of the managers implicated in the scandals was a longtime Boeing employee. They came to Boeing from McDonnell Douglas after the merger or were recruited by a former McDonnell Douglas employee. Mike Sears, the fired CFO, was a protégé of Stonecipher's at McDonnell Douglas. (source: Chicago Tribune, February 29, 2004)

Contrast this with a description of Alan Mulally in USA Today back in March of 2005 when the Boeing board was looking to replace Stonecipher.

Gregarious, polite and the married father of five, Mulally also has one other key qualification: a spotless personal life.

So why was Alan Mulally passed over twice for the Boeing CEO job? Speculation is that the mercenaries had their hands on the wheel in 2003 when Stonecipher got himself anointed and then by 2005, with numerous scandals rocking the company, the board gave up on the culture clash and went outside the company for its CEO. Was it, therefore, a culture clash that drove Mr. Mulally to Ford?

Columbo Lite

2007-04-10T21:26:00.000-05:00

Tuesday, April 10, 2007

I ran across a short piece in the April issue of HRMagazine this week. Of course the title, “Many CFO’s Don’t ‘Fit’ Company Culture” caught my eye. The article refers to a survey Right Management conducted with HR managers and executives at mid- to large organizations in all industries about how Chief Financial Officers (CFO’s) are faring in the Sarbanes-Oxley world.

The survey revealed that 23% of the respondents listed “CFO did not fit into culture of organization” as a reason for why the CFO left the company, exceeded only by the number one reason, “accepted another job offer.” This one bit of information gave me enough pause to unleash a bevy of questions. Here we go.

Does this demonstrate a respect for and safeguarding of company culture or have we discovered the new euphemism for “he/she got fired?” Were these CFO’s getting the right results and still didn’t fit in or weren’t they getting results? What’s more important to a culture, getting results or fitting in? Or is an inability to fit in merely a symptom of a culture that can’t handle diverse leadership styles? Who is to fault, the rigid CFO or the rigid culture?

Why so many mismatches? To what degree is this a failure of the selection process? Was “cultural fit” a factor in the selection criteria? If so, how did the hiring manager(s) go about teasing out the potential match/mismatch? It’s interesting to note that the survey respondents (HR managers and executives) are the same people who would have interviewed and selected the CFO candidate. Might their explanation of “cultural mismatch” say more about them dropping the ball than the CFO’s inability to fit in? Are we talking “cover-up?” (Don’t call Woodward just yet.)

Can the powers-that-be hold a culture in too high of esteem? Where is the tipping point between upholding the culture because it serves the business and the business serving the culture? Do we always know when we are slaves to our own culture?

Can an executive create a culture within his/her department that is different from the organization’s culture? Would this reflect a strength or weakness of the culture?

Who is the keeper of the culture? The executives? Human Resources? Who has the right to say, “This is the way we do things around here?” Who owns the culture to claim the right and responsibility to protect the culture’s standards and values? Does HR or the executives see the culture the same way as the rank-and-file? Who is more in touch with the reality on the ground?

To what degree was the culture really rejecting the rigor of the CFO’s financial standards and not his/her leadership style? CFO’s can make life difficult inside organizations that don’t adhere to rigorous financial standards. Were these CFO’s sacrificed because they played by the rules of others, such as the Securities and Exchange Commission?

Would Inspector Clouseau be proud of me?

A Culture of Scarcity

2007-04-05T13:26:00.000-05:00

Friday, April 6, 2007

One of the interesting insights I have gained from reading Thomas Friedman’s columns in The New York Times is his observation that oil-rich nations have a history of not investing in the development of their human talent. These countries tend to spend less on education as well as technology infrastructure, such as broadband Internet capacity. I agree that having lots of something that other countries desperately need can make you “fat and happy” and less likely to spend public money on things that don’t bring the same immediate, financial returns, such as education. Of course this state of bliss can only continue if the right mix of supply and demand continues. Lower the demand and increase the supply and countries like Nigeria, Iran, and Venezuela are in a different boat. In any case, these countries both benefit and suffer from a culture of plenty – summed up by “why bother trying to compete in the world when we have enough oil to take it easy?”

But the opposite is equally revealing – a culture of scarcity. In a recent article in The New York Times Magazine (I swear I read things other than The New York Times), Jon Gertner explains how Toyota conquered the car world. I found the following excerpt very revealing on the roles national culture, resource scarcity, and marketplace demands played in shaping Toyota’s corporate culture. I’ll let Jon explain it.

Toyota’s success has often been attributed to a Japanese quality of persistence and ingenuity. One of the first Western academics to look deep inside the company, Michael Cusumano, now a professor of management at M.I.T., debunked that notion when he compared Toyota and Nissan in the early 1980’s. “The founders and the managers created and refined Toyota company culture, which is far more powerful than Japanese culture,” he says. “It does build on many things that are Japanese – precision, quality, loyalty. But the Toyota culture dominates.” Cusumano adds that Toyota’s origins, in a rural prefecture, hours from the international influences of Tokyo, provided a beneficiary insularity. The company began growing just after World War II, nurtured by government regulations that effectively shut out big American automakers. Still, the devastated postwar economy in Japan necessitated extraordinary resourcefulness: because there was a lack of materials and parts suppliers, for example, Toyota had to create them from scratch. Since the early 1930’s, Toyota engineers have looked everywhere for inspiration while tearing apart American products to see how they work. Toyota’s systems and worldview derive from an economy of scarcity. In 1950, the company’s near-bankruptcy during a difficult year further defined its philosophy of frugality. Toyota soon began to focus obsessively on reducing muda – or waste – and building up a vast storehouse of cash for security.

So early on, circumstances and its leaders hardwired Toyota’s culture in a particular way. My take on Gertner’s reporting is that it is this very culture that gives Toyota a particular competitive advantage in today’s marketplace. Yes, Toyota has lots of money to throw at product development and quality but this cash reserve seems to come directly from a cultural characteristic of the company – frugality. Now contrast this with Microsoft. They have their own version of “having more money than God” and have spent lots trying to get into the Internet game. But Google is still the king of the search hill and Window’s Vista continues to require patches as well. Even with all this money, Microsoft can’t seem to be a heavy hitter in the places they need to compete (with the possible exception of Xbox. I’m no gamer, any out there that can educate me on Microsoft’s competitiveness in the gaming industry?). When was the last time Microsoft was seen as innovative? Have they slipped into a culture of plenty? Can Steve Ballmer turn Microsoft’s banquet into a Victory garden to re-ignite a culture of “hunger?”

Side bar: for some strange reason I googled Microsoft to find its website (here’s a guess, maybe its www.microsoft.com) and the first thing that popped up, as a Google sponsored link was “Microsoft Updates: Detect & Remove Malicious Software. Free Removal Tool from Microsoft.” Does the expression “canary in a coal mine” come to mind?

View from the Margin

2007-04-02T17:07:00.000-05:00

Tuesday, April 3, 2007

When we hear or use the word “marginalized,” we often think of negative connotations. We picture the dominant group pushing one or many, against their will, to the outside. This very act of exclusion carries with it a loss or diminution of the marginalized’s power to influence. All they can do is look in from afar and curse their outsider status.

But when it comes to interacting with unfamiliar cultures, being the outsider looking in can bring with this status clear advantages, but only if you can accept the positive quality of the marginalized stigma. Watching the film “The Namesake” this past weekend illustrated this for me.

It is a story about an Indian couple (Ashoke and Ashima Ganguli) who come to the United States for opportunities and end up starting their family in America and raising their two children (Gogol and Sonia), with all the tensions associated with a microcosm of Indian culture existing within a broader, dominant American culture. Gogol is intent on moving beyond his Indian roots and fully embracing the American culture, in one case Americanizing his given name and in another, seriously dating a non-Indian woman (Maxine). It is only the shock of a sudden family tragedy that draws him back to his Indian culture.

One scene in particular stands out in my memory. In it, the local Indian community gathers at the home of the Ganguli family to collectively grieve their loss. Maxine arrives and is knowledgeable enough of the Indian culture to observe certain rituals. But overall, by her words and actions towards Gogol, it is clear she wants no part of being the outsider and tries to persuade him to return, in so many words, to her world. But Maxine’s efforts to pull Gogol back out of his Indian culture just when he has returned to it through his grief is enough to distance them from each other and apparently leads to their break-up.

Thinking about this scene later, I thought about the incredible opportunity Maxine missed by not stepping or staying outside the group. To allow herself to be marginalized, she would have gained a perspective on Gogol and all his complexities that is nearly impossible to see when one is immersed in the cultural context. She, as an observant and curious outsider, would have gained the power of discernment and insight and possibly as well, wisdom uncommon to most people. But it takes courage and self-confidence to be an outsider, to be on the margin looking in.

Going back to my posting from Friday, Schein in The Corporate Culture Survival Guide also talks about this idea of being marginal. In his discussion of what it takes to bring about a transformative change in an organizational culture, he emphasizes the need to have a parallel group that focuses on learning an alternative way of thinking or doing that can be proven to be workable, that can be “sold” to the organization to foster the change. Here is Schein’s explanation for what I would call “the power of the outsider.”

The essence of the concept of a temporary parallel system is that some part of the organization must become marginal and expose itself to new ways of thinking so that it can be objective about the strengths and weaknesses of the existing cultural elements, and how these will aid or hinder the changes to be made.

Fully engaged insiders simply cannot see the culture in which they are embedded clearly enough to assess and evaluate its elements. On the other hand, having an entirely outside assessment of the culture is equally unlikely to be productive because the outsider does not know enough of the cultural nuances to be able to make an assessment. The solution is for the parallel system to include key insiders who then work with consultants to decipher the culture and plan the change program. (p. 131)

Even more significant is the implication this has for leaders of the organization. Schein continues:

It is also assumed that the organization cannot learn anything new if the leaders themselves do not. Leaders need to be made marginal, to have some new insights, and to participate in the parallel system to explore the new learning in a wider context. (p. 131)

Isn’t this wild, that leaders need to be made marginal, to place themselves on the outside looking in? But it’s not one or the other. A leader is highly effective when he or she can straddle the line between outsider and insider; enough distance to gain a perspective and enough immersion to understand the intricacies.

Where do you stand?

All Hail, Edgar Schein

2007-03-30T10:43:00.000-05:00

Friday, March 30, 2007

I’m sure you have read one of those books that made such an impression on you, that you underlined or highlighted every other line. For me, that book is Edgar Schein’s The Corporate Culture Survival Guide. Schein is a professor emeritus at the Sloan School of Management at the Massachusetts Institute of Technology and author of the definitive text on organizational culture, Organizational Culture and Leadership. Every so often I go back to these books to pull more insights from his wisdom and in the process gain an even greater appreciation and respect for his practical intellect.

So here are some excerpts from The Corporate Culture Survival Guide and the humble commentary of a most unworthy disciple.

The organization clings to whatever made it a success. The very culture that created the success makes it difficult for members of the organization to perceive changes in the environment that require new responses. Culture becomes a constraint on strategy. (p. 13)

This was startling to me when I first read it because of its simple truth. The only reason why a culture evolves the way it does is because its members come to believe that particular assumptions, behaviors, and norms contribute to its success and so they reinforce and repeat them over time. But when the external environment changes, too often the culture becomes the scapegoat. Leaders bemoan the dysfunctional nature of the culture and describe it as “broken” or “sclerotic.” I’ve heard leaders describe their organizations as “calcified.” But just when these leaders try to “save” the dying organization, they discover that the “patient” is very much alive and kicking and not interested in the cure. I return to the teacher’s wisdom:

Never start with the idea of changing culture. Always start with the issues the organization faces; only when those business issues are clear should you ask yourself whether the culture aids or hinders resolving the issues. Always think initially of the culture as your source of strength. It is the residue of your past successes. Even if some elements of the culture look dysfunctional, remember that they are probably only a few among a large set of others that continue to be strengths. (p. 189)

Thinking back on some of my earlier postings about the American Red Cross and Dr. Healy’s experience with its culture, I am particularly fond of this excerpt from the section on culture dynamics in mature organizations because of its Frankenstein-esque quality.

Whereas leadership created culture in the early stages, culture now creates leaders (his emphasis), in the sense that only those managers who fit the mold are promoted to top positions. In fact, one of the most dangerous aspects of culture at this stage is that it is an unconscious determinant of most of what goes on in the organization, including even the mission and strategy of the organization. (p. 143)

The potential impact of a culture on the organization’s business performance is even more frightening when you consider this insight.

We tend to think that we can separate strategy from culture, but we fail to notice that in most organizations strategic thinking is deeply colored by tacit assumptions about who they are and what their mission is. (p. 33)

This calls to mind the idea of organizational blindness. We outsiders look at organizations groping to find their way in a new competitive landscape or those seemingly caught off-guard, asleep at the wheel (why does K-Mart come to mind?) and we think, “Isn’t it obvious to them?” The reality may be that inside this type of organization and culture, the answer may be “no, it isn’t obvious.”

I’ll leave you with this excerpt that should help all of us to remember that culture is not to be messed with lightly. Show a certain amount of respect, if you please.

If you treat it (culture) as a superficial phenomenon, if you assume that you can manipulate it and change it at will, you are sure to fail. Furthermore, culture controls you more than you control culture. You want it that way, because it is culture that gives meaning and predictability to your daily life. As you learn what works, you develop beliefs and assumptions that eventually drop out of awareness and become tacit rules of how to do things, how to think about things, and how to feel. (p. 25)

All hail, Edgar Schein.

A Riff on Sustainable Cultures

2007-03-27T07:52:00.000-05:00

Tuesday, March 27, 2007

One of the expressions that we bantered about during the Michigan Leaders Read program last week was “let’s riff on that.” So in the spirit of expounding on something already “played,” I am going to pick up on a comment I made towards the end of my Friday posting: “are the Geeks a cult of personality or a culture of theater? For this posting, I’m going to take the focus up a few thousand feet because I’m curious about “how does one avoid a cult of personality and instead build a culture of sustainability?”

As I thought about this question over the past few days, it eventually dawned on me that such a discussion should acknowledge the work of Collins and Porras in “Built to Last.” I, however, have much more modest goals for this discussion than Messrs. Collins and Porras had for their work. They focused on what it takes to be a visionary company. I am more interested in thinking about what it takes to be a self-sustaining culture and my criteria are: does it survive the departure of its founder and any of its chief executives and is it recognizable to the imaginary time traveler? I’m interested in a more pedestrian version of “built to last.” How can you build a company that lasts 100 years and is somewhat recognizable?

First, you need the type of leaders who believe that it’s not just what the company achieves during his or her tenure but what it achieves after they are long gone. Legacy leadership, we’ll call it. Now some would say “it’s out of my control once I leave.” Not entirely true if you build the right culture.

And what is that right culture? Well, I don’t think it resembles a “cultlike culture” that Collins and Porras documented in “Built to Last.” By its very definition, “cult” (obsessive devotion or veneration for a person, principle, or ideal, especially when regarded as a fad) conveys a sense of rigidity and inflexibility. Not exactly recipes for longevity. Nor is it a culture that collapses like a house of cards. Side note: there is a great scene in the recent Academy Award-winning German film, “The Lives of Others” which illustrates this. In the scene, banished agents of the East German secret police, while doing grunt work in a dingy basement, hear about the fall of the Berlin Wall. One of them, a main character in the movie, just gets up and walks out and the others follow. A wall comes down and the culture of fear collapses like that. The gig is up.

So here is my educated guess as to what qualities, characteristics, and principles would sustain a culture (the proverbial, “it’s the way we do things around here”) over time and through turmoil:

• Creativity and innovation: the notion that new ideas are stimulating and fun
• Adaptability: Darwinism at its best
• Honest, humble self-assessment: both collectively and individually
• Customer intimacy: an obsession with “it’s all about them”
• Curiosity and questioning assumptions: the joy of “why”
• Openness to “death” and belief in “re-birth”

I suspect this last characteristic warrants further explanation. More often than not, when it comes to organizational life and death, it is less about a physical cessation and more about a perceptual existence. A culture that is not afraid of organizational death regularly asks the question “if we were to disappear today, who would care and why?” It makes no assumptions that the organization deserves perpetuity. It accepts the responsibility of justifying its continued existence by making itself relevant to others. And it does this because it knows or suspects that allowing a false self-perception to die opens the organization to a new degree of freedom of thought, perspective, and ideas. It places its trust in this freedom to spark some sort of re-birth within the organization.

So, Mr. or Ms. Leader, what would you need to say or do to imbed and foster these qualities in your organization? What do you want to leave behind? Why shouldn’t your organization exist for a hundred years?

Jim Gilmore and the Geeks

2007-03-23T07:24:00.000-05:00

Friday, March 23, 2007

I had the distinct honor this week of participating in the Michigan Leaders Read program here in Ann Arbor. Four local business leaders started this book club a couple of years ago as a way to help develop the caliber of leadership in Michigan. A committee selects four books each year to organize thought and discussion.

The first book of the year was “The Experience Economy” by Joe Pine and Jim Gilmore. We were fortunate to have Jim Gilmore join us to explain and discuss what an experience economy is and why business leaders should care.

Jim and Joe make the argument in their book that the drive to extract more economic value out of human activity has resulted in an evolution from an agrarian to an industrial to a service and now to a experience economy. In many market sectors, particularly those that are consumer-based, delivering acceptable customer service is not enough of a differentiator to justify premium pricing for the service. Being able to stage and deliver an experience for the consumer that blends theater, education, escapism, and estheticism is what Jim and Joe would call the “sweet spot” of an experience offering.

So one of the examples Jim talked about this week was the Geek Squad. In case you don’t know, the Geek Squad is a computer repair service that makes office calls, house calls, or in-store repair. Robert Stephens started Geek Squad in Minneapolis in 1994 and in 2002 Best Buy bought the company (with Robert as part of the package). There are now 700 Geek Squads in Best Buy stores across the country. Its shtick is nerdy computer repair people in short sleeve white shirts, black pants, black ties, agent badges a la “Dragnet,” deadpan humor, along with many, many extensions of this persona. Click here to read why Jim and Joe think the Geek Squad is a great example of a service provider wanting to play in an experience economy.

When I first read about the Geek Squad in their book, and listening to Jim this week, I couldn’t help but think this was just a gimmick. Yeah, pretty creative but still a gimmick. Even when Jim pointed out that Robert Stephens would passionately disagree that this economic theater was anything close to being a gimmick, the consumer inside me said, “OK, but why should I take you seriously?” I reflected on this conundrum over night (how does a business stay away from the gimmick trap?) and of course I turned to my favorite answer: it’s all in the culture. (Why else would this posting be on www.corporatexray.com?)

So what would be some features of the culture of an experience-based enterprise? Well, for one, since the experience economy is all about staging “economic theater,” you would need “actors” and not simply employees. And you need these actors to buy into the persona (both character and environment) that you have created to stage this experience. In the Geek Squad’s case, the persona is “comedy with a straight face.” If I, as a consumer, have any chance of crossing over that imaginary line of buying into the Geek Squad experience, the Geek Squad Agent, in that moment of truth with me, needs to stay in character and not let my view of our shared reality define the moment.

Their role models should be the stoic guards of Buckingham Palace. Not only because of their ability to “stay in character” but also because there is an element of truth in this persona: guarding the Queen of England is no laughing matter. Neither are fixing or installing complicated, temperamental home computers and networks.

So if our working definition of organizational culture is “it’s the way we do things around here,” the Geek Squad agents have to buy into the fact that “playing” this nerdy character somewhere connects with his or her personal values and is ultimately an act of self-expression and not merely corporate expectations. For this to happen, the culture would need to “pull” out of the employee the behaviors, language, and attitudes that feed and support the desired experience. This is a key ingredient if the culture has any chance of be self-sustaining over time. But the type of culture that will ultimately undermine this experience is one that “pushes” this persona on to the employee and ultimately undermines the employee’s buy-in and leads to scripting. Therefore, the Geek Squad culture needs to be an improvisational culture rather than an acting culture if it is to avoid being simply a gimmick.

The ultimate question in my opinion is “to what degree is this a self-sustaining culture?” A good indicator of this is to find out whether the new embellishments to the Agent persona come mostly from Robert Stephens (the founder) or from the actual geeks themselves. In other words, if Robert Stephens were to walk away, would this culture and persona continue or would it peter out over time? I’ll leave you with this. Are the Geeks a cult of personality or a culture of theater?

What say you?

American Red Cross: Part 2

2007-03-19T16:53:00.000-05:00

Tuesday, March 20, 2007

It’s time for Part Two of the American Red Cross case study. In my March 9 posting, I talked about how we can look at corporate culture through the lens of social or behavioral styles and described how the styles of Dr. Healy and the American Red Cross culture were polar opposites, the Driver-Steadiness tension. I wanted to spend a little more time talking about these two styles and the dynamic that can often surface from their interaction.

Let’s start with the Steadiness style as it relates to a culture. Given that the mission of the American Red Cross is to “provide relief to victims of disasters and help people prevent, prepare for, and respond to emergencies,” it’s reasonable to assume that the culture of the rank-and-file would be Steadiness. Think about it. Unpredictable, and often catastrophic, events, along with all the stress that comes with such responsibilities, define the whole operation. By virtue of its mission, preventing and responding to disasters and emergencies is the daily mindset of anyone involved in the Red Cross, particularly the closer the person is to the front-line.

Naturally, people who work in such daily circumstances would probably look to their work environment, whether consciously or sub-consciously, to be as predictable and stable as possible. Therefore, both individually and collectively, the Red Cross rank-and-file is likely to reject and resist anything that threatens to disrupt stability or add unnecessary distractions.

My experience with this type of organizational culture and the individuals that support it is that they are not necessarily opposed to change but they are very skeptical about the transition required to get from the current way to the new way of doing things. Their experience tells them that leaders don’t often have the patience or devote the necessary resources to ensure that everyone experiences an orderly, logical, and supportive transition. Too often, in their eyes, the change is abrupt, poorly justified, and under-financed.

So enters the Dr. Healy character into this drama. Hard charging, intelligent, impervious to excuses, more interested in the future than the past, thrives on challenges: the classic change agent. She comes in talking about the need to change, pointing out where there are problems (which only injects conflict into the work environment, in the minds of a Steadiness culture) and starts to set aggressive goals.

The Steadiness culture often pulls back at first, in some ways recoiling from the push of a Driver leader and in other ways, stepping back to take in the entire situation. It usually doesn’t take long for the Steadiness culture to conclude that they can wait out this leader and all the changes he or she is pushing down their collective throats. Their mindset is one of, “I can wait you out because I know I am here forever. Your track record is one of not staying long at an organization. You will get bored or get in trouble. You will be gone long before I am.”

And in most cases, they are right. The Driver leader does get bored when progress towards the new way slows down or others stymie his/her push. Regardless of how the Driver leader responds to the resistance, the Steadiness culture knows the leader’s days are numbered. There is a sense of impatience in the leader’s body language and actions. He or she starts to overreach, frustrated by the lack of progress and desperate to experience any sort of movement forward. The Steadiness culture digs in deeper, walking a delicate balance between resistance and perceived effort, waiting for others to step into the fray. Often it is the Board of Directors, concerned about the lack of progress, or complaints coming from the organization about the leader’s style, or questionable actions the leader took when overreaching. The Steadiness culture smells blood in the water. Be patient, lay low. Rumors begin to fly. And then the magical day arrives. The announcement. “President and CEO Dr. Bernadine Healy to Leave the American Red Cross.”

But wait, there’s even more. To be continued…

Culture and the Start-up

2007-03-15T08:28:00.000-05:00

Friday, March 16, 2007

I recently attended a meeting of the New Enterprise Forum here in Ann Arbor. They “link entrepreneurs to management expertise, potential joint venture partners, mentors, business services, capital, and other critical resources.” During the Q&A session, one entrepreneur asked about how to go about creating a culture for his small enterprise. That got me thinking about what start-ups need to know about something as nebulous as culture. So this goes out to all you up-starts as you start up your new venture.

You have plenty of things to contend with as you work to get your business up and running. So let me make a pitch for why consciously creating your company’s culture should be higher on your list of priorities.

First, let’s be clear on what culture is and why it’s important. The practical definition of culture is, “it’s the way we do things around here.” Therefore, behavior and decisions are tangible evidence of the intangible culture.

We often base behaviors and decisions on a set of beliefs and values we hold. Since we all carry around our own unique beliefs and values, the potential for a particular way of doing things is always present. You may be the only employee in your company right now, but you have already laid the groundwork for a culture to take shape, based on how you are currently conducting yourself and how you envision your business operating. A dynamic culture is one that supports your company’s business model and reflects your values as the creator of the business, without being in conflict with each other. Such a dynamic culture can serve as a competitive advantage.

So here are some reasons why being proactive on building a desired culture is a smart idea.

You can’t be everywhere, at the same time, keeping an eye on everything. The benefit to you, personally, of building a strong, intentional culture is that you can have greater confidence in your employees to do the right thing when you’re not around. Having a strong culture is invaluable as your company grows and takes on additional employees because it will be your tenured employees who will convey and reinforce the desired behaviors. Remember, culture is fundamentally “this is how we do things around here.”

Reputation is everything. As a start-up, the reputation you establish with your customers is critical. Reliability, responsiveness, and quality are all factors in what becomes your reputation. It can be a potential deathblow if employee #4 doesn’t buy into “how we do things around here” and demonstrates it at the worst possible moment with one of your more important customers. You could easily lose that customer.

You can be your own worse enemy. Just because you had this great idea and started this new venture doesn’t mean you have the personality or habits to make it succeed. Plenty of start-ups succeed in spite of the founder. You want to force yourself to answer in a conscious, intentional way this question: What are the values and beliefs I want my employees and myself to convey in our behavior and decisions?

If you don’t, someone else will. It is often unintentional, but circumstances can dictate what your culture becomes. It goes like this: you’re busy, absent, or distracted and one of your employees handles an important situation in an inappropriate manner. You don’t say anything or bring it up with the employee because you’re busy, unaware, or prefer to avoid conflict. Your non-response still sends a message, leaving your other employees to conclude, “it must be okay to do that.” Have this happen enough times and you will have a mess on your hands in no time. Now, if this sounds like I am insinuating that your employees are like children who take their cues from mommy-boss and daddy-boss, let me clarify something. I’m not insinuating -- I’m stating a fact. A parent and a boss share something in common: they hold the power. Your employees look to you to establish and enforce what is right and wrong, especially since the company is your creation. Use this to your advantage.

It’s all about congruency. As a start-up, you don’t want your company to convey one thing through your marketing materials and then have your employees act in a way that is counter to the image you are trying to project. If this happens, you will end up magnifying the incongruence because you have little or no track record or reputation to balance out a bad experience. Your customers will experience the incongruence and question whether you have your act together. This may be enough of a reason for them not to take a chance on you.

Building an intentional culture

Here is what you can do to make sure your company’s culture is intentional and designed to support your business plan and reflect the values and beliefs that led you to start the venture. When the time is right (usually about the time you’re ready to open your doors for business), spend some time thinking through a few specific customer scenarios. Your business plan will help to remind you who your targeted customers are, how you plan to identify them and make them aware of your product or service, and how they will most likely contact your business.

Using this information, write up two different case studies; one that describes the worse case scenario of the customer’s experience with your business and the other, the ideal scenario. Then share these scenarios with your employees (or even applicants) and discuss the importance of doing things the way as described in the ideal scenario. Share your perspective on the potential impact on the business if the worse case scenario occurred. Also, be willing and able to openly share your values and beliefs and how you feel they make this business endeavor unique. You can also use the ideal scenario to find out if your employees see any barriers to being able to respond in this manner. You don’t want to set certain expectations and unknowingly place barriers in the way. This can easily foster frustration and undermine your credibility.

Having detailed and relevant case studies also helps you clarify values that have room for interpretation, such as “customer focused.” A thorough case study will help illustrate exactly what it means to be customer focused in this particular company with your particular customers. Start-ups often don’t have the leeway to leave such things to individual interpretations.

Onward and upwards

As you go forward, be vigilant and prepared to address any behavior or decisions that you feel run counter to your desired culture. You need to be able to correct the behavior as soon as it appears so you can send a clear and credible message that you are serious about “how we do things around here.” It doesn’t take as long as you might think to get people on-board. And once that happens, your small start-up takes on a personality and character that makes it stand out in the marketplace. Not bad for something intangible.

What’s “endogenous” got to do with it?

2007-03-13T13:28:00.000-05:00

Tuesday, March 13, 2007

We had great weather here in southeastern Michigan over the weekend so I decided to drive into Detroit and see the other half of an exhibition that is at the Museum of Contemporary Art Detroit (MOCAD). It’s entitled “Shrinking Cities” and MOCAD and the Cranbrook Museum of Art in the Detroit suburbs (Bloomfield Hills) are co-sponsoring this exhibition locally. I’ll let the folks at MOCAD describe it for you:

Shrinking Cities, a project by Germany's Federal Cultural Foundation, the Kulturstiftung des Bundes, explores a form of urban development that has become a global phenomenon. Starting in 2002, local teams were commissioned in Detroit (USA), Manchester/Liverpool (Britain), Ivanovo (Russia), and Halle/Leipzig (Germany) to investigate and document processes of urban shrinking. In more than fifty exhibition contributions, artists, architects, filmmakers, journalists, culture experts, and sociologists reveal and illuminate the changing realities of these cities.

Here’s why I’m talking about this on a blog dedicated to corporate culture. It’s all about perceptions, human systems, and leadership.

When I toured the Cranbrook part of the exhibition a few weeks ago, the story of Detroit’s devastation overwhelmed me. It added to my familiar perceptions of Detroit (being a non-Michigan native) as being a city totally devastated, a wasteland, with little viable human activity. If pressed, I would probably conjure up images of its citizens on the brink of psychological paralysis because of the overwhelming devastation. Think of post-World War II Europe without the Marshall Plan. And the Cranbrook exhibit gave me examples of where civic leadership contributed to the devastation through corruption, complacency, or incompetence. I left the exhibit with the perception of Detroit as devastated beyond hope and any private or public intervention would only postpone, but not prevent, its inevitable death. Then I went to MOCAD.

One of the exhibits at the MOCAD is a documentary video produced by Interboro, a New York City-based research and design firm in collaboration with the Center for Urban Pedagogy. The video describes, among many things, the phenomenon in the city of Detroit called “blots.” A blot is the larger lot that results from a homeowner taking, borrowing, or buying one or more adjacent lots. Some residents have been able to piece together a number of contiguous lots because the City of Detroit has demolished a significant number of abandoned houses over the years. By acquiring adjacent lots, these residents have acquired an acreage size that is typically available only in suburban communities. Some have added gardens, gazebos, parking space, or just left the lots empty. The video authors use the homeowners’ grass roots efforts as an example of a positive, “endogenous” (produced from within) response to localized, urban blight and name it “The New Suburbanism.”

I’m not saying this documentary gave me hope, but it did alter my perception of this human system called Detroit. It gave me examples of where people are making efforts, albeit small and localized, to re-claim their immediate surroundings. And these folks have often taken initiative in the face of antagonistic or distracted civic leadership with their own agendas. Action to fill the vacuum of true leadership. And in numerous cases, these actions have been a creative response to improve their bleak circumstances. Innovation born of self-interest. Any application to other types of human systems, such as corporations?

What if we looked at organizations that are going through their own version of decline and possible extinction and the perception that outsiders have of the viability of the organization as a human system. Keeping with our Detroit theme, let’s take Ford Motor Company as an example. The perception is that it is on life-support. Bleeding billons of dollars. Closing facilities left and right. Selling off assets like Aston Martin to get its hands on some amount of cash. Leadership that has not kept the company competitive and responsive to rapid changes in the global market. A devastated workforce, emotionally paralyzed, waiting for the hatchet to swing their way. It’s easy to imagine the new CEO, Alan Mulally, and his management team totally focused on survival. Do whatever it takes to stop what some think is inevitable: Ford’s disappearance from the global marketplace.

So, Mr. Mulally, before you start blaming the Ford culture as one of the many culprits for Ford’s predicament, look deep into the organization for your version of blots. Listen. Ask questions. Send out your spies. You, yourself, poke and probe everywhere in the organization to find those pockets, albeit small and localized, of innovation borne of self-interest. As Lester Burnham said in “American Beauty,” “I’m just an ordinary guy with nothing to lose.” The Lester Burnham’s of Ford have something to show you.

Case Study: American Red Cross

2007-03-09T10:00:00.000-05:00

Friday, March 9, 2007

Any of you remember in the aftermath of the 9/11 attacks hearing about the head of the American Red Cross resigning? Given all that was going on during the fall of 2001, I know it slipped under my radar. That is, until I read a feature article by Deborah Sontag in the New York Times Magazine in its December 23, 2001 issue. The title: “Who Brought Bernadine Healy Down?” And let me tell you, I found it to be a captivating tale of “culture clash.” But the battle wasn’t between two cultures; it was between a leader and her organization’s culture. And guess who won?

You can go to the New York Times archives and purchase a copy of the article for $4.95. I highly recommend the article as a vivid case study of what can happen when a leader with a particular style and agenda goes up against an organizational culture with a very different approach and values. I often ask my coaching clients to read this, not necessarily because they share similar characteristics with Dr. Healy but because the article describes very clearly how and why a leader can end up digging their own hole.

I think you will find this story that much more compelling if you read it through the lens of behavioral styles. There are numerous models of human behavior/personality and their complementary instruments that have been around for a while, such as the Myers-Briggs Type Indicator, the Predictive Index, the Herrmann Brain Dominance Instrument, Wilson Social Styles, and the DiSC Personal Profile. Though I work with a number of these instruments in my practice, I find the Wilson/DiSC models to be more useful.

Here’s a quick overview of the four quadrant model of human behavior that are reflected in the Wilson Social Styles and DiSC Profile (I’ve mixed and matched the style titles to use what I consider to be the better descriptors):

Driver: characterized by a strong desire to move things forward. A person who has a strong preference for this style can come across as a steamroller if he or she is unaware of the impact their behavior has on others.

Influence: characterized by enthusiasm and a strong desire to work in a positive, energetic environment. A person who has a strong preference for this style often finds that others don’t take him or her seriously because they don’t convey to others a certain gravitas.

Steadiness: characterized by a strong desire to maintain a steady, predictable, conflict-free environment. People who have a strong preference for this style often avoid anything resembling conflict as well as changes that disrupt their familiar patterns.

Analytical: characterized by a strong desire for high standards, quality, and logical processes. A person who has a strong preference for this style can come across as demanding because he or she has very high professional standards for themselves and co-workers.

Keep in mind that the Driver-Steadiness and the Influence-Analytical combinations have significant differences between them and therefore have the greatest potential for misunderstanding and conflict. So now let’s look at this case study through the lens of behavioral styles.

I think we can make an educated guess that Dr. Healy’s preferred style is probably a combination of Driver and Analytical. Here are some excerpts from the article that point in that direction:

Healy, baldy showcasing her impatience toward Red Cross sanctities about tradition, had long displayed a saying attributed to Clara Barton above the mantle: “It irritates me to be told how things have always been done…I defy the tyranny of precedent.”

A blunt-talking New Yorker born and bred in working-class Queens, she was not known as a diplomat. Rather, she was known as a driven professional who ruffled feathers but made things happen.

Given the following descriptions of the Red Cross culture, I think it’s safe to say that its organizational culture reflects a Steadiness orientation:

The remaining 30 governors, who are selected by local Red Cross chapters through a competitive nomination process, really control the organization. They tend to be lifelong Red Crossers who have worked their way up from local to national prominence within the organization; they also tend to be protective of traditions – and of veteran employees with whom they have longstanding relationships.

In a confidential memo to the board in late October, Healy bitterly described how the organization’s internecine dynamic was summed up for her by another executive when she arrived in September 1999: “Red Crossers will give you the shirt off their back, but will as easily put a knife in your back.”

Can you see the battle being set up? Driver vs. Steadiness. It doesn’t get any better than this. Let’s stop here so you have a chance to read the article and let me know what you think. But I’ll come back to this story. There’s even more to this ultimate culture clash.

It's Launch Time - Where's the Champagne Bottle?

2007-03-05T08:46:00.000-05:00

Tuesday, March 6, 2007

Welcome to the inaugural posting of Corporate X-Ray and thanks for your interest in this topic. I thought I would start with why I came to start this discussion and what I hope to accomplish with it over time.

For some time now, the influence an organizational culture can have on its members has intrigued me. Through my personal experience with client organizations and my reading, I’ve glimpsed how culture can affect how one acts, or how someone perceives reality, and even more so, how decisions are made and the quality of those decisions. And yet, often these rules of conduct, perception, or thinking go unspoken, unrecognized, or unchallenged. It’s as if there is some mysterious, hidden mechanism that is operating just behind the public face or below the personal experience of an organization that is calling the shots much more so than the executive suite. All this becomes even more intriguing to me when these unspoken values differ from the organization’s publicly stated corporate values. What could be more captivating but to poke about something that is both intangible and powerful?

But when I would go looking for this type of investigation in the mainstream business press, such as the Wall Street Journal or Business Week, I often came back empty handed or unsatisfied, and understandably so. It’s tough to justify the amount of print space that these types of stories require. Just as much, few publications can devote the necessary time it takes for a journalist to do a sufficient job of not only uncovering and explaining the dynamics of an organization’s culture but more importantly how it ultimately influences business performance. This is a tall order for a one-shot deal like a feature article. And when it comes to business academic research, it’s not often that I have found it to take a layman’s perspective or have a practical application in mind. Therefore I’ve turned to blogging technology as a way to address the limitations of mainstream business media and academic research while at the same time opening up the discussion to a wider audience. By doing so, my hope is that this collaborative approach will uncover insights far richer than any one person could on their own, all to our mutual benefit.

So by the name Corporate X-Ray, I mean to convey the idea of looking beyond the obvious and concrete to see what lies below the surface and how it drives human action, and ultimately business performance. Or in other words, digging deeper into “that’s the way we do things around here.” Besides, I thought Corporate X-Ray was an improvement over Corporate Autopsy.

What I hope to bring to this discussion is both my natural curiosity as well as my experience in working with a variety of organizations and different industries. The simple fact that I know from my experience that not all organizations do or view things the same way gives me a different perspective than those within an organization. This is especially true if their frame of reference lies exclusively with one organization. I am in a position to “compare and contrast” organizational cultures to sharpen my vision as I peer in to what’s below the surface.

I suspect my blogs will run the gamut, from personal observations within organizations, to commentary on applicable articles in the media, to excerpts from business books and research, to reactions to your postings. My plan is to post every Tuesday and Friday.

So my hope is that a destination like Corporate X-Ray, through our conversation that builds over time, will provide all members of the business community with insights not readily accessible elsewhere. I invite you to share your own knowledge and experience on the topics I post so we can mutually develop a penetrating vision. That’s cool.