In an October 25, 2011 article titled, “The Global Innovation 1000: Why Culture is Key,” published by Booz & Company, the authors (Barry Jaruzelski, John Loehr, and Richard Holman) write, “Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture – it trumps strategy and leadership. That isn’t to say that strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.”
From my observations and experience, a corporate culture is defined largely by five factors:
- Who you hire and retain and the way and extent to which you develop people
- What you measure
- What you recognize and reward
- How the leaders act
- How you allocate resources
Not surprisingly, the bigger the organization, the harder it is and the more time it takes to change a culture. Of course, if the leader of a unit has too many limitations on his/her ability to hire and fire, change the reward system, or allocate resources, significant culture change within that unit can be nearly impossible.
I think about this from time to time in relation to the culture of our society. To what extent do similar factors apply? Certainly, the way we educate and train (i.e. develop) people is hugely important. The kind of performance and behaviors we reward or punish also heavily influence a society’s culture.
How a society chooses to allocate resources also has a bearing on culture. For example, using resources to help people develop and productively utilize their talents will tend to create and reinforce a very different kind of culture than if we use resources largely in ways that reinforce dependencies.
How leaders act can also be a major factor. Unfortunately, we live in an era when respect for institutions of all kinds is at perhaps an all time low. While at times there are good reasons for lack of respect for an organization, other organizations in the same field that have not acted improperly are often tarnished by association. Consequently, even those leaders of institutions who demonstrate admirable behavior and performance often have few followers outside the institutions they lead.
If we use a basic definition of a leader as one who has followers, it seems that a lot of celebrities have far more followers than do most leaders of business, governmental, religious, or not-for-profit organizations. Often, those celebrities and , seemingly, all of their actions – especially the less admirable ones – are widely publicized by various media. We can at least be grateful for those celebrities who consistently demonstrate attributes that are worth emulating.
For those of us in positions of influence in an organization, it’s obviously important that we do all we can to cultivate a culture that optimizes the potential for success of the organization and its people. Part of that involves reminding ourselves that, whether we like it or not, others are watching what we do and how we act in various situations. All of us need to do our best to conduct ourselves in ways that are worth emulating and that will enhance rather than detract from, not only the kind of organization we want, but also the kind of society we want for our children and grandchildren.