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Jan 29, 2013

What culture would you establish? (Part 1)

Organization cultures are as different as the leaders who unwittingly create them

By Dave Crisp

Writing the last post about the impact of the CEO on an organization’s behavior got me thinking further about the kind of cultures CEOs establish. Clearly it reflects them, their habits, their approach to and views of the world.

However, a new CEO taking over an existing operation is working against the culture already in place from one or more predecessors. I say "working against" because it seems rare that a CEO takes over with a plan to simply extend the existing culture.

As unique as we all are, everyone typically wants to put her stamp on things. Doing so requires consistency over a long period. Not surprisingly, in a world where the average tenure of CEOs is 2.5 years, consistency over a long period is rare.

Equally unsurprising then is the fact many of the organization cultures we see succeeding were put in place by long term start-up owner-CEOs who aren’t displaced until they age out — Google and Facebook being current (albeit still early) high-tech examples following the path of Microsoft and Apple. Among turnaround leaders who have taken over existing cultures, the most obvious success is Jack Welch who was in place of more than 20 years and, in Canada, family business heads like Michael McCain of Maple Leaf Foods who has been on the job 15 years.

That’s perhaps the key to how cultures develop — one person wants to put her stamp on things and happens to be able to maintain a type of consistency for more than 10 years, reminiscent of the observation by Malcolm Gladwell (in his book Outliers) and others who say it takes 10 years of consistent practice for individuals to become "talented."

One can see from the examples above that consistency succeeds more reliably than any one personality type. How different these leaders of large scale successes have been, yet how similar their length of tenure.

Just as there are many different types of people, there are different reasons for wanting to start or run companies. One interesting summary of the variety is this CBS report citing several studies and an experienced author and student of entrepreneurship. Many simply see it as a way of making money, some see a chance to create the product, service or work environment they’ve always dreamed of. Others clearly want — and this is a big one in North America — freedom to call the shots instead of being locked in a corporate structure not of their making or liking.

All these reasons, with the possible exception of intending simply to make money with whatever market or product is at hand, is a way of saying: "So I can have things my way."

That is hardly a good footing on which to expect a leader will be a CEO who sees high value in engaging people and spreading authority, along with responsibility and participation, among her co-workers. In fact, it’s basically the complete opposite of that, but it does occasionally happen.

Simply by chance there will be some who see the world as a participatory exercise in which everyone they work with should be encouraged to input ideas and take initiative, but those individuals will be the minority. The more natural style will be that now they are the boss, they believe they are free to — and are supposed to — order people around and command that things be done, often done a certain way.

After all, isn’t that in some sense the very meaning of ownership, being in charge and having the top responsibility? Whatever that "way" is, at least if it’s consistent, people who can tolerate it will accumulate, others will leave and those who stay will be productive in a stable environment.

I doubt very many people think of starting a business for the purpose of providing engaging jobs to others, of working hard to ensure everyone they hire is first and foremost engaged, enjoying the work and able to contribute their own ideas. In fact it sounds almost ludicrous to put it that way.

The main purpose has to be first and foremost to make money and provide a secure living... to the owner. Given this going-in focus, is it any wonder that organizations rarely settle into cultural habits that engage and support workers, where people are thrilled to work and are highly productive instead of worried about how long they can stand it before they have to look elsewhere? (Or start their own business that they can run their way?)

Yet it is exactly the engagement and participation of workers at every level that is most influential in ultimately helping an operation succeed. With all the million things an entrepreneur has to think about and contend with when establishing a business, it’s unlikely this participatory culture will be an early priority. Raising money, refining products and services, hiring, getting offices and equipment set up and developing sales will distract the first CEO from spending much time thinking about how employees should be treated if the business is to thrive.

Past experiences and personality style of the CEO will more likely dictate how she behaves in the midst of the stress of getting everything up and running. With luck, perhaps, she will start the business with a small group of people she likes and respects — and hence tend to listen to. But often entrepreneurs see themselves as one-person-bands. Given that we all have personality quirks, and a busy startup period doesn’t provide much time to analyze what those are and whether they need to be modified, it’s likely the culture-dominating leadership style with be whatever it is when the CEO launches, not consciously the ideal style for engagement and satisfaction for staff.

You can see where this is going. It’s a wonder we have any companies at all where the culture has evolved to a positive, supportive one. We definitely need to study how organizations with effective cultures got this way. Did they luck out with a good CEO to begin with? If not, how did they change to get there? We need to understand these factors before we can reliably build or change a culture into the one we know is most reliably successful.

Dave Crisp is a Toronto-based writer and thought leader for Strategic Capability Network with a wealth of experience, including 14 years leading HR at Hudson Bay Co. where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit
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