Creating a Bad Culture pt 1

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People talk about how hard it is to change a corporation’s culture, but I have started to think that they are wrong, in part. I think it’s easy to change corporate culture if one wants to make it worse.

Let us imagine a newly appointed CEO, who is really intent on screwing up the culture. Where would he start?

  1. Complain about everything
    If I were that CEO, I would start by complaining to anyone who will listen about anything that I think needs to change. If I were skillful, I would make sure that no-one could see what I was doing.

    I would complain about things that can’t change, like things in the past, or taxes. I would make sure that I pointed the finger at other people, blaming them for anything that didn’t go right.

    I would conceal how much I enjoy complaining, and pretend that I really wanted things to change.

  2. Listen to Complainers
    I would also encourage others to complain to me. They would be able to commiserate as much as they want, and I would listen and add my two cents worth. I know they would be blaming others, and I would agree with them all.

    I would promote the people who are the really big complainers, and support them in passing on responsibility to others. I would have no problem as they justify their poor performance.

    After work, I’d support long sessions over drinks while we all spend some more time wishing that things are different.

  3. Break Promises
    I’d make public promises and simply never bring them up again if they are never met. It would be a case of selective amnesia.
  4. Communicates Infrequently and Irrelevantly
    I would rarely speak to groups of employees. I would also never encourage a Q&A and use a script wherever possible. I’d avoid speaking about the issues that people care about the most, unless I have really good news.
  5. Never Let Them See you Sweat
    I’d be sure to communicate confidence and capability at ALL times. No matter what uncertainties or doubts I may have, I’d never show them, and learn to hide my true feelings (the better to build trust in my leadership.)

To be continued…

Research: Creating a Culture

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In recent research conducted by Accenture, the following factors were given as the most important when it comes to the all-important task of building a corporate culture. These are given in rank order of importance.

  1. Behaviour modelled by management
  2. What leaders pay attention to, model and control
  3. Performance and promotion systems
  4. Criteria used for selection, retention and termination
  5. Leaders’ reactions to critical incidents and crises that threaten survival and test the values of the organization
  6. The organization’s formal and informal design and structure
  7. Systems, policies and procedures that determine how work is done
  8. Stories and legends about key people that are told throughout the organization
  9. Ceremonies (company celebrations, awards, rites of passage or advancement)
  10. Formal statements of philosophy, principles and values

There is a lot in this list that is very interesting, and the research is based on interviews with 65 companies.

I’d be willing to bet that all of those companies are based in developed countries, and that no more than one or two are run by people of colour. It leads me to think that the survey instruments they have devised are less than useful for Caribbean companies, and would need to be modified before use.

Read the complete report entitled “Creating a Corporate Culture that Drives Greater Financial Returns and High Performance”.

HR Trends #1a — Diversity

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(Also posted on the CaribHRForum discussion list)

Imagine the setting of a corporate meeting room, and a critical point in the meeting when a CEO turns to the VP HR, looks them dead in the eye and says:

CEO Question:
We need a diverse corporate culture. How do we go about building one?

VP HR: I’ll have a plan to discuss with you in a couple of days.

In the plan presented, the VP HR (who hopefully has been thinking about this for some time,) has laid out the following:

  1. Based on the strategy we are following, what are our 10-20 year goals?
    If we don’t have any, then diversity is a moot point because it’s a capability that cannot be built today, but only years in the future.
  2. In what way does it need to be diverse?
    Does it need to be more diverse than our society at large? If so, in what ways? Here are some examples: ethnicity, age, gender, education, sexual orientation, religious background, native language, class, etc.

    If we are looking to sell religious icons to people from different faiths, we had better hire people who understand those faiths.

    If we are looking to have a very creative workforce, we had better pay attention to those studies that say that tolerance and creativity go hand in hand. Our hiring must be flexible enough to attract people of all backgrounds.

    We will need to define the new target population that we want to have in our workforce, and compare it to what we have today.

  3. How do we get there?
    There are a few levers that we have to play with.
    • One is that we change the way that we hire. We can specifically tune our outreach efforts to bring in more people with different backgrounds. This is relatively easy to do.
    • The second lever to use is a change in the corporate culture. This is particularly hard to do.
    • There are several angles to take at the same time when creating a cultural intervention:
    • — authentic leadership by example
    • — performance management
    • — public events
    • — large group seminars
    • — personal coaching

We can design a culture that will help us to attract the right kinds of people, giving us whatever kind of diversity we want.

Forward-Thinking Cultures

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An interesting article in the Jul-Aug Harvard Business Review describes how countries that are more “forward-thinking” have achieved better results in measures such as GDP per capita and levels of innovativeness, happiness, confidence, and competitiveness.

In the article, “forward-thinking” is defined as the extent to which a culture encourages and rewards such behavior as delaying gratification, planning, and investing in the future.

While the study was confined to countries, I can imagine that it also applies to companies.

In the Framework approach to strategic planning, we use a method of scenario-generation that looks 20-30 years out into the future. This approach is described in the August issue of FirstCuts in more detail — Issue 14.0 which is available at the Framework Consulting website.

Essentially I think this article is backing the idea of taking a very long view of things, which we endorse.

The Advantage of Being in Jamaica

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One of the advantages I have of living in Jamaica is that it has helped me to see what is often accepted as a normal business practice in North America from a very different perspective.

One simple example is a question that we used to ask each other in the U.S. workplace — “Are you keeping busy?”

Now, from a Jamaican perspective, this question looks like a strange one. Why should someone’s goal be to keep busy? What is the purpose?

Will we all be happier when we are busy all the time?

Is the whole point of work… to find more stuff to work on?

Volunteering and Standards

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I once “worked” as a volunteer for an organization that had 200 employees and 3000 volunteers. What was remarkable was that this company was a for-profit company.

There are a few companies that I have volunteered for that I consider to provide the kind of experience that made the time well worth it, and many that I think could learn a thing or two.

There were three lessons that I learned from my volunteer experiences.

Savvy organizations realize that volunteers give of their time for every reason that employees do, only without the prospect of material compensation. They seek to learn and grow themselves, to make a real difference and to be acknowledged for their contribution.

Savvy employees know that they need to make it easy for their volunteers to gain the benefits they seek.

Many of the best practices used to manage employees still apply.

Best Practice #1 – Insist on Providing Value
Managers of volunteers know that they need to sit down at the beginning of a volunteer assignment and talk about what the volunteer would like to gain from the experience. They talk about their goals, and what they would like to learn while they are on the assignment.

Some go even further, and explicitly insist that a condition of their engagement as a volunteer is that they gain value that exceeds the cost to them in time, money and energy. In other words, the onus is on them to gain the benefit.

Here at Framework, this is a part of our own volunteer agreement.

Best Practice #2 — Make the Agreement Explicit
A written agreement works better than one that is spoken. It covers the necessary basics that relate to any contract employee, minus a section on remuneration. ’nuff said.

Best Practice #3 — Maintain High Standards
In the best organizations, volunteers are part and parcel of the high standards the organization aims to deliver to its customers or constituents.

The question I ask myself most of all when engaging volunteers and employees alike, is whether or not they have what it takes to raise the standard of work done in the company, or whether or not they will have to be managed carefully so that they don’t lower it. With volunteers, the key is to create that expectation from the very beginning, and to be very clear with them that they are part of delivering it.

If they are treated as if they can deliver great things, they are much more likely to do so.

On the other hand, if little or nothing is expected of them, then it is likely that they will live down to that expectation also.

The bottom line is that the volunteer to company relationship is not very different than an employee to employer relationship.

Caribbean Employees are Exceptionally Sensitive

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This is a problem I haven’t solved, but I think that by stating it clearly, it might help me to understand how to think about a solution.

Do Caribbean managers have only one of two choices?

Should they be nice (in which case employees run all over them) or should they be harsh (and thereby lose the trust and loyalty of those from whom they most need it)?

Is the set of choices available really as limited as this suggests?

Surviving an Acquisition

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In the news these past few weeks there have been some significant announcements related to acquisitions across the Caribbean region.

One major acquisition that was announced for the first time was that of Neal and Massy’s takeover of BS&T — Barbados’ biggest company.

Also in the news is the announcement that the principals of DB&G (which was acquired by Scotiabank) are leaving the company at the end of June.

Although the LIAT/Caribbean Star merger has not been in the news of late, the sale has still not been completed, although it has been scheduled to happen on June 15th.

The common factor between all three actions is that they were all announced as “mergers of equals.”

The result?

They are actually turning out to be acquisitions, and not mergers.

Lest anyone think that this is a strange occurrence, history is littered with examples of announced mergers that turned out to actually be acquisitions, including AOL-TimeWarner, Daimler-Chrysler, HewlettPackard/Compaq and Sports Authority/Gart.

The fact is that executives almost always start out using merger language in public, unless the takeover is hostile. In fact, they are undergoing acquisitions, especially with respect to the corporate cultures.

It is not too hard to tell who the cultural winner is — the executives of the company being acquired usually don’t last very long.

In a Framework article entitled “Merger of Equals? Equal Shmequal!” by Amie Devero, she argued that a merger is not possible, in cultural terms. (The article can be downloaded by sending email to fwc-equals@aweber.com.) Also, the recent April 2007 Harvard Business Review article entitled Human Due Diligence makes the point that companies often fail to recognize the “cultural acquirer” when undertaking these activities, to their detriment.

While these questions are certainly of issue to shareholders, it is the employees that bear the brunt of initial miscommunication.

They hear talk of “a merger of equals” “nothing will change,” “no layoffs, ” “business as usual” and “the same management will continue.” Given the public track record of mergers to date, they have every reason to be concerned.

Why?

When senior management insists that a merger of equals is underway it may be good for shareholders to hear and believe that the executives between the two companies are planning to harmoniously co-exist in some way. However, it is often a misleading statement for employees.

History shows that employees are much safer believing that a merger actually means that

  • each and every job function will be examined for possible overlaps, and that it is likely that at least some jobs will disappear
  • one company will be culturally dominant over the other
  • one set of executives will remain, while the other will depart
  • there will be major changes and new order will make itself known over time (after all, isn’t that the point of the exercise?)

This is not to say that these are bad outcomes — often they are the best things that can happen to the new, combined company. In the free market of management styles and approaches, let the best company and management team prevail.

However, the problem stems from the fact that most executives in both companies start out by mis-leading their people.

In the very way they announce the “merger” their own people can detect the lie.

It’s a little like a bad version of the Brady Bunch — each parent tell their children that a marriage is about to happen to join two families together, and… “by the way… in case you kids were wondering… nothing will change.”

Executives the world over leading acquisitions persist in painting an ultra-rosy picture of the future for their employees. Their inauthenticity is palpable.

It seems that often, they buy into their own “story,” an even in the colossal failures like AOL-TimeWarner and Daimler-Chrysler, they seem to be able to maintain a scary insistence that all is well, even when everyone in the real world knows that it is not.

What can executives do differently?

In a prior blog I wrote about what I called “High Tone Managers.” These managers focus on being relentlessly positive, to the point that their employees come to distrust everything they say because they are the ones saying it.

An executive leading an acquisition would do much better by being authentic and saying some version of the following, if true:

  • we are about to undergo a very difficult change
  • this is a friendly acquisition (if it is)
  • the odds are against us being successful
  • we think the risk is worth it
  • the culture that we intend to create will hopefully take the best of both companies
  • some jobs will be retrenched, but we are hoping that no people will be forced to leave the company
  • the reasons we are doing this is ….
  • it will take all of us working together to pull it off

The point here is that an acquisition is a shock, and that people will go through the changes they need to go through in order to adapt to it. It is not unlike the 5 phases of grief a survivor journeys through upon the death of a loved one, as defined by Elizabeth Kubler-Ross: Denial, Anger, Bargaining, Depression, Acceptance.

Employees need to be helped to go through these stages as quickly as possible, en masse. Their feelings at each point must be validated, acknowledged and given room to live, if even for an instant.

If executives do their job well, employees can be like soldiers rallying to a cause that is greater than themselves.

However, if the job is done poorly, as it usually is, the result is that employees feel like victims who need to protect themselves from something terrible, that their own parents are inflicting upon them for their own benefit.

In Caribbean companies, the employee mood doesn’t get much worse than this.