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Corporate culture is the game

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in Best-Practices Leadership,Leaders & Managers,Leadership Skills

Most leaders think strategy drives leadership.

“The fact is, culture eats strategy for lunch,” says Dick Clark, who took over the pharmaceutical firm Merck in 2005 and discovered an insular, ivory tower culture. “You can have a good strategy in place, but if you don’t have the culture and the enabling systems ... the culture of the organization will defeat the strategy.”

Looking at this phenomenon, business professor John Weeks discovered something counterintuitive. He spent a year studying a British retail bank and never heard one positive thing about it from managers or staff. The bank was inflexible, too bureaucratic, too rules-driven, not customer-focused, not entrepreneurial, too self-centered—and, too negative.

Plus, there was never an expectation that anything would change. It had been that way for 300 years. The gripes were like complaints about the weather, “incessant and with good humor.”

You might think the way to lick this would be isolating problems and fixing them. Wrong. The key, it turns out, is starting with what’s good about the organization.

Consider IBM. When Lou Gerstner took over in 1993, he found a howler of complaisance and complaint. He needed a decade to reverse it.

Gerstner says change has to start with good feelings, not bad. He put his finger on what employees thought was worth keeping.

Bottom line: IBM’s chief concluded that “culture isn’t just one aspect of the game—it is the game.”

— Adapted from “An Unpopular Corporate Culture,” John Weeks, IMD International, www.imd.ch.

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