What makes a good culture
If you believe politicians, regulators and commentators, all the problems of the business world and the rest of the universe can be solved by fixing culture.
As Peter Drucker never said: “Culture eats strategy for breakfast.”
As Australian management guru Stan Glaser did say: “Definitions of culture abound.”
“The one conclusion that can be drawn from all these attempts to give a ‘scientific’ meaning to the concept is that a single definition is impossible,” Glaser says. “‘The way we do things around here’ makes a great deal of sense. It becomes possible to point to a behaviour and say: ‘That’s not the IBM way — but this is’ and be understood with relative precision.”
The problem with that approach can be the list. Companies love to make lists of the way they would like to do things. If you believed the Enron list of values (integrity, communications, respect and excellence) then you would now be seriously out of pocket or out of a job or both.
In the 1920s, the life expectancy of a company was 67 years. Today the average is 10-15 years. In his classic Corporate
Lifecycles, Ichak Adizes wrote that companies go through their prime to their fall to bureaucracy to death (or monopoly or government life-support, which is the same thing: they’re dead but they don’t know it). The fall stage, as with Enron, is deceptive. Companies are usually cash-rich and have strong financial reports.
So apart from walking and chewing gum, driving growth and productivity at the same time, how can culture keep your company in its prime?
Five dirty little secrets about culture: • You can’t treat all your people (or customers) the same. To build a highperforming business your staff need to be treated according to their performance and track record. Since you can’t please everyone, focus on pleasing the most talented. • Carlos Brito, CEO of Anheuser-Busch InBev uses the “don’t be gentle; it’s a rental” to describe the difference between employees who feel they have real ownership of the business to employees who feel they work for a company. The difference is between “the company will fix this problem” and “we will solve this problem”. Where there is ownership there is accountability. • Informality works. An organisation where people feel they can speak up in a clear, open, honest and respectful way means the red flags and the good ideas are recognised early. • A sense of purpose is critical. Inside and outside, people have to know what you’re here for and what you stand for. • Beware the platitudes. We only hire the best people. Safety is our top priority. The truth is most companies, with the exception of firms such as Macquarie Bank, don’t hire the best people. If they did, executives wouldn’t leave it to HR people to recruit.
Most senior management love the status quo. As Carlos Brito says “focusing on the status quo is the best way to build a lowperforming culture”.