Why Corporate Culture Matters!

What exactly is corporate culture? The dictionary defines culture as “the totality of socially transmitted behavior patterns, arts, beliefs, institutions and all other products of human work and thought.”

Jason Young, maintains in his article “High Performance & Corporate Culture” that it is not a set of core values developed by a small group of people at an off-site leadership meeting. It is not always what a chief executive describes in an annual report or shareholder’s meeting. In fact, corporate culture is not always what the leadership team of an organization says or thinks it is. What an organization assumes, believes values, accepts, and promotes, produces and the way in which behavior occurs frames its corporate culture.

Why is culture so important? Strong corporate cultures outlast the influence of even the strongest leader. That’s the reason Apple will not only survive but also thrive in post Jobs era if it is able to maintain its culture that Jobs build during that last decade and half. The importance of corporate culture in success of an organization and longevity cannot be overstated. “An organization’s norms and values aren’t formed through speeches but through actions and team learning. Strong cultures have teeth. They are much more than slogans and empty promises. Some organizations choose to part ways with those who do not manage according to the values and behaviors that other employees embrace. The above is outlined by Harvard Business School professors Jim Heskett and W. Earl Sasser with co-author Joe Wheeler in their new book “The Ownership Quotient”.
Culture, the human terrain of an organization, has real bearing on organizational success and performance. It affects communication, co-operation and learning. It can help explain why changes will prompt some employees to quit even when compensation is not affected, why a talented leader may flounder in a cultural mismatch and why incentives and individual psychology alone don’t predict results. Defining and delivering on the promise your organization’s culture can deliver tremendous internal and market-facing benefits.

Nurturing corporate culture: According to Jason, “In some companies, culture develops by default. In others, culture develops in ways that are conscious, intentional, and tangible.” Noting, Southwest Airlines is one example of a company that has created a work environment where people can do their best work. In fact, in the words of its former CEO, “We are looking for a particular type of person, regardless of what job category it is. We are looking for attitudes that are positive and for people who can lend themselves to causes.”

Several organizations have built a unique corporate culture over the time to meet demands of changing global competitive market place to reap a unique advantage. I remember a mid-size Indian IT firm initiating a successful, multiyear internal campaign in late 90s to focus the centricity of customer among thousands of its employees to cultivate high quality delivery & deeper customer engagement. It was a well thought out strategy that was dictated to materialize firm’s ambition to differentiate its position among global customers & transition in to tier 1 IT vendor at global level.

This underscores the fact that, the buy in among the people of entire organization is very critical as it accelerate the motivational environment and allows people to do what they do best as they start seeing alignment between organizational values and individual behavior in broader context. The whole process needs active support from top leadership, constant communication to keep people focused on stated or desired culture.

Shyam Verma, PMP, ITIL-F,
Program & portfolio Management
LinkedIn: spverma. Twitter: Shammy1

Obama and the Oil

It seems that after lot of media bashing & paranoid people views on the street, Obama has struck a well balanced agreement with BP.Some of his critics would may still consider President’s meeting outcome with BP as missed opportunity to extract much more than what has been spelled in the agreement yesterday, it would go a long way in getting the message that he is in control of the situation. In his speech the previous day also underlined President’s laudable goal of creating a renewable energy-based economy. Here are some of the factors that may have got subdued in all the frenzy last few weeks;

Actual Magnitude of Spill: Some of this has to do with the size of the crisis and it’s long term impact on the local people. The disaster, involving a leaking deep water oil well, has devastated a vast area of the United States marine environment, killed sea life and has a serious impact on the local fishing industry. Efforts at containing the spill were at first inconsequential but lately some progress has been made since the fitting of a cap to stem the leak tough it is not completely stopped the leak and a permanent solution may still be months away. Obviously it had a toll on the stock valuation sensing the potentially huge financial commitment BP would have to shoulder in cleaning up the environment. Currently US senate is estimating roughly $20 billion would be required from BP to safeguard and protect the environment from the aftermath of the spill. A similar accident cost EXXON roughly $7 billion and fought several lawsuits to limit the extent of the liability.

Soft President: US President Barack Obama is under tremendous pressure to live up to high American expectations to act tough on the BP oil spill. It is not only the growing anger of the American electorate that is resulting in plummeting popularity for him but constant criticism from the media too. From the beginning he has had been portrayed too soft on the company for not acting fast enough to force BP take immediate steps. Now that the oil spill story unfolds itself & it is pretty much clear that the first estimate of environmental damage is actually manifold that previously thought. It is now clearly one of the biggest environmental tragedies caused directly by human activities that we know in the recorded history of across the world. Obama now is expected to put stringent rules for BP’s accountability to pay for the damages. Constant media attention has made sure that he is seen more involved and talking much tougher than few weeks back.

Bad PR: To top it off, BP’s million dollar PR campaign to show better picture of itself didn’t help Obama either. BP has taken heat for spending millions of dollars on television ads to tout their commitment to the clean-up efforts in an effort to re-store their bruised and battered public image. Obama is now putting pressure on BP to skip paying millions in its stock dividends to commit more funds for the clean up and saving wildlife.

Govt Failure: Department of Interior’s Minerals Management Service, the agency that was supposed to be regulating BP, failed miserably. At this agency, industry insiders were put in charge of industry oversight. “Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations,” Obama said

American double speak: However, the twist came when UK government made a statement in BP’s favor asking to let the company take its own decision in best interests of its stockholders. Now some industry analyst asking if there was an American company involved in a similar accident outside US, would there have been same hue & cry & same govt pressure to clean up and accountability? Consider Bhopal Gas Leak decades ago where Union Carbide went scot-free without paying required compensation, environment clean up or financial liability and court cases went on well over 25 years to book the company officials.

It would help all if US govt & Obama works to shape the future safety policies for such tragedies and enforces strict adherence rather trying to please every American constituent. As a leader, Obama should keep his focus on key issues not only globally but locally as well than let just this one issue cloud the broader vision.

Shyam Verma, PMP, ITIL

Program & portfolio mgnt professional

LinkedIn:spverma. Twitter: Shammy11