John Con­nolly

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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”.

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