Culture stories from the trenches
by Miki SaxonI find culture within the corporate world is fascinating. The following three wildly divergent stories illustrate the importance and impact of culture.
The doings of private equity firms are a major news staple today.
What do you do when you’re one of the biggest, baddest firms, “tagged in the popular imagination with warmongering, treason, and acting as cold-eyed architects of government conspiracies,” and you want to radically change not just public perception, but the actual business of the firm?
If your name’s Carlyle you start by momentous changes at the very top. “The founders asked members of the bin Laden family to take back their money. They sat down with George H.W. Bush and John Major and discussed, improbable though it might seem, how the two were no longer wanted as senior advisers because they hurt the firm’s image. Out went former Reagan Defense Secretary Frank C. Carlucci as chairman. In came highly regarded former chairman and CEO of IBM (IBM ), Louis V. Gerstner Jr., along with former Securities & Exchange Commission Chairman Arthur Levitt, former General Electric (GE ) Vice-Chairman David Calhoun, and former Time Inc. (TWX ) Editor-in-Chief Norman Pearlstine, among others, to underscore Carlyle’s commitment to portfolio diversification and upright corporate citizenship.” You then go on to do things that “might come to redefine the very nature of private equity.”
But the second part could never have happened without that total change in culture.
Labor and buy-out firms are typically anathema, but they don’t have to be if you let go of greed and share the spoils. Hard to believe?
It worked for Onex at Spirit AeroSystems where they created a productivity culture based on real rewards for the risks taken.
There were some layoffs at the start, “But the new owners helped ease the pain by giving the remaining workers $246 million in cash and stock options. The money was a reward for helping the company…cut costs and pull off a successful initial public offering. “I can’t tell you what a thrill it is to give our organized workforce nearly $250 million,” says Seth M. Mersky, an Onex managing director.”
The turnaround and successful IPO couldn’t have happened without the cultural shift.
And finally, a high profile, not-so-happy example of the impact of culture.
Julie Roehm’s explosive departure from Wal-Mart last December made business headlines and will probably continue in the news.
It was considered an odd match from the start, “…a cautionary tale of what happens when a self-described change agent goes to work for a company that needs to reinvent itself but can’t.”
In discussing what lessons she has learned, Roehm says, “The importance of culture. It can’t be underestimated.”
Culture is a living, multifaceted animal and needs to be cared for on all levels if you want to keep its multiple parts uniform, or, at the very least, synergistic.
- The publicly stated culture of the company.
- The culture actively fostered by the CEO and top management.
- The covert culture that may exist because it is ignored or, worse, fantasized away.
- The cultural fit of managers, employees and candidates.
In short, take care to know and cherish your culture and it will take care of you.
