Shawn Parr, whose company works with large corporations, such as Starbucks and MTV, on innovation wrote a meaty post called Culture Eats Strategy For Lunch.
It reminded me of something I wrote back in 2008, because the title is from a quote by Dick Clark, CEO of Merk and after rereading it I decided it’s worth reposting, so here it is.
Culture Trumps All
A post on Dave Brock’s blog led me to an article at IMD’s site called “An Unpopular Corporate Culture” and, as Dave said, it’s a must read for anyone who still thinks that corporate culture is some ephemeral concept with no real impact that consultants use to sell their services.
And a double-must for those who talk about culture’s importance, but don’t walk very well when it comes to creating a great corporate culture.
For those who prefer to put their faith in plans and strategy, hear the words of Dick Clark when he took over as CEO of Merck in 2005 and was asked about his strategy for restoring the pharmaceutical company to its former glory. “His strategy, he said, was to put strategy second and focus on changing the company’s insular, academic culture.” The fact is, culture eats strategy for lunch,” Clark explained. “You can have a good strategy in place, but if you don’t have the culture and the enabling systems that allow you to successfully implement it… the culture of the organization will defeat the strategy.””
If you’re looking for a best practice corporate culture silver bullet forget it—one size doesn’t fit all.
Rex Tillerson, CEO of ExxonMobil, describes that company’s top-down command and control culture of consistency and discipline as “the source of our competitive advantage,” and has made it a priority to reinforce it.
Meanwhile, Robert Iger and Steve Jobs, in their discussions about the acquisition of Pixar by Disney, have been concerned with avoiding an Exxon style command and control culture. Jobs says that, “Most of the time that Bob and I have spent talking about this hasn’t been about economics, it’s been about preserving the Pixar culture because we all know that’s the thing that’s going to determine the success here in the long run.””
It took Lou Gerstner a decade to remake IBM.
The key lesson Gerstner learned in his time with IBM, as he later reflected, was the importance of culture.”Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success—along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.”
The article is more than just additional proof for my favorite hobby horse.
The analysis of the role of employee complaints/negativity play in culture and the importance of what to keep when setting out to change a culture as opposed to what to jettison will give you new insight on your own company’s culture.
In case you still doubt the power and value of culture I hope that Dick Clark, Rex Tillerson, Robert Iger, Steve Jobs and Lou Gerstner combined with the articles in Fast Company and IMD have finally changed your mind.
I’ve read a lot about Sam Palmisano and previously written about him.
That said, I still found Wharton management professor Michael Useem’s interview with Palmisano covering his 40 years at IBM, including the last decade as CEO, interesting and informative.
It’s a long interview and, if you prefer, you can use the link to read it or download an audio version.
Most importantly, be sure to read the comments, most by IBMers, which, by and large, are anything but flattering.
Do you agree that his focus on the company screwed the employees or did he get it right?
How does a CEO balance the legacy needs of employees against the needs of the company to survive in a different world?
What would you have done differently to achieve the same success?
Many of this week’s posts will revolve around culture, so it seemed apropos to start the week with some interesting views on culture.
Louis V. Gerstner, former CEO IBM, says,“The thing I have learned at IBM is that culture is everything.”
Many experts are coming to that realization—decades after the average employee figured it out.
They didn’t use that term 30 years ago when I was a recruiter, but candidates talked about wanting to work where they “felt comfortable” and “fit in;” where they were listened to and were happy.
Edgar Schein, a professor at MIT Sloan School of Management, says, “The only thing of real importance that leaders do is to create and manage culture.” “If you do not manage culture, it manages you, and you may not even be aware of the extent to which this is happening.”
Robert Mintz said, “The crimes alleged at Enron were not the acts of a few greedy senior executives, but truly was an indictment of almost the entire corporate culture.”Of course, it was those same greedy execs who fostered that culture.
Jane Howard said, “We believe it’s our responsibility to create a unique corporate culture. If we do that well, we believe we’ll have enthusiastic employees. If we have enthusiastic employees, we’ll have loyal customers, and if we have loyal customers, we’ll have a sustainable business.”
Shades of Tony Hsieh, who built a culture so powerful that other execs pay him to learn how to implement something similar in their companies; “Our No. 1 priority is the company culture. Our whole belief is that if we get the culture right, then everything else, including the customer service, will fall into place.”
Zappos is a long way from fast food, which is often considered the bottom of the cultural heap, but many execs in that industry are hyper aware of culture’s effect. As David A. Brandon, CEO of Domino’s Pizza said, “You can’t overcome a bad culture by paying people a few bucks more,” something that management ought to remember.
Finally, research from Harvard Business School’s John Kotter & James Heskett found that culture has a major effect of the bottom line, “We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin.”
For a long time now I’ve believed that the L word in all its forms has been abused and corrupted and I’ve haven’t been shy about saying so. Further, I hate words that are defined using variations of themselves. When that happens there is nothing concrete against which to check the meaning of the word or its usage.
I’m also not a lover of people who rant and whine about what’s wrong, but offer no ideas to fix the problem/situation.
So it’s time to start working on solutions.
Perhaps a new acronym would jump-start changing the career slant of ‘leader’.
That way we can offer leadership skills to all, so that they can indeed lead whenever it’s appropriate to the situation—leaders in the instance—instead of anointing a chosen few.
How about POF (person-out-front) to refer to someone at the front of the organization.
Or perhaps it would be better to use upper and lower case for the person in front who may or may not be a Leader, but is a leader.
For example, Richard Fuld is a leader, whereas Lou Gerstner is a Leader.
Of course, that may be worse, since people in those roles already consider themselves ‘special’ and might start thinking of the likeness between god and God.
That’s as far as I’ve gotten, but I’m hoping that y’all, AKA, my brilliant readers, will add your ideas and suggestions.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Shawn Parr, whose company works with large corporations, such as Starbucks and MTV, on innovation wrote a meaty post called Culture Eats Strategy For Lunch.
Many of this week’s posts will revolve around culture, so it seemed apropos to start the week with some interesting views on culture.
For a long time now I’ve believed that the L word in all its forms has been abused and corrupted and I’ve haven’t been shy about 
