There Is Nothing Wrong With The Term ‘Company Culture’
I nearly choked to death this morning, while chomping away on my cereal.
The headline from Harvard Business Review read, Why “Company Culture” Is a Misleading Term. While wiping off the milk from my iPad, I began to read on.
“Organizational culture is assumed to be important to making sure that employees are happy and productivity is good. At the same time, the concept, meaning, and function of culture rarely garners much thought.”
WHAT? At this point, I stopped eating the cereal for fear of a Heimlich Maneuver in my immediate future, most likely performed by a scrawny but increasingly concerned 9 year-old.
The author of the piece — Dr. John Traphagan, professor in the Department of Religious Studies at the University of Texas at Austin — seems to have crossed his wires throughout the piece. I’m here to defend the term, “Company Culture”.
But first, a bit of a background to the author. John’s LinkedIn profile suggests he is “a cultural anthropologist with over 15 years of experience in research and teaching” where he has been “consulting with government agencies and industry and working with the media on issues related to Japanese culture and society.”
Is there no “company culture” present in Japan?
His biography page at The University of Texas at Austin poses further questions for me. Aside from the grammatical/spelling error, John states the following:
Dr. Traphagan’s research interests center on the relatinoship between culture and science. His past work has focused largely on medical concepts and religion in Japan. Currently, his primary research focuses on the application of anthropological ideas within the field of astrobiology.
Aside from me wondering what his recent research focus on astrobiology has to do with “company culture”, I’d like to argue that there is indeed a relationship between culture and science, much like there is one between culture and the company.
When Dr. Traphagan suggests “the concept, meaning, and function of culture rarely garners much thought” and that “most of us give very little thought to what that term means and how its use influences behavior and thought within organizations” he is flat wrong.
Three years ago, Greg Smith — a high-ranking employee at Goldman Sachs at the time — penned a rather influential (if not controversial, for some) editorial to The New York Times. In it, he opined:
“Culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years.”
He’s right. Greg eloquently depicted what true “company culture” ought to be about. Concepts such as teamwork, integrity, humility and finding the processes, behaviours and mechanisms inside the company to put your ‘customers first’ is indeed what true “company culture” is all about.
I surface the editorial from Greg because he went on later to describe how the culture had evaporated at Goldman Sachs, leading to his resignation. “I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief,” he continued. “Get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.”
It was a bit of a personal vendetta against his employer, but it was a bit of a wake-up call for senior leaders at Goldman Sachs, too. Whether or not executives had forgotten about their “company culture” at Goldman Sachs, ever since Greg’s whistle-blower letter of sorts, the company has regained (and augmented) their internal operating composure and are (again) thinking and acting on their company culture. It’s but one example, but Dr. Traphagan’s assertion that organizations aren’t giving much thought to “company culture” is balderdash.
Alan Mulally, former President and CEO of Ford, provides us with another example. Saddled by an economic crisis in 2009 just short of the 1929 depression, he worked extremely hard to turn around the company and avert complete financial ruin. One of several strategies he introduced was something called ONE FORD. Mulally knew not only were the stakes high for his company’s survival, he had an entire workforce (and industry) worried sick. This was not the time to invoke any sort of “superhero syndrome” … it was an opportunity to fix the “company culture” at Ford in order to ensure the company actually survived.
ONE FORD was the plan-on-a-page quest introduced to employees — and external stakeholders thereafter — that invoked teamwork, collaboration and cooperation. Introduced as a graphic to the entire organization, the left side contained three defining statements (ONE TEAM, ONE PLAN, ONE GOAL) that outlined “people working together” and an “exciting viable Ford for all”. The emphasis Mulally introduced in a time of crisis centred on the redefinition of “company culture”.
On the right side of the graphic, Mulally used the word Ford as an acronym further detailing how they would recover from the economic meltdown they were facing. The details included:
- Foster Functional and Technical Excellence
- Own Working Together
- Role Model Ford Values
- Deliver Results
This is the epitome of “company culture” and it helped turn the tables of bankruptcy at Ford, while improving morale and so on.
Perhaps the example at Ford and with Alan Mulally in particular demonstrates causality with research conducted by Stanford University’s Charles A. O’Reilly III and his peers. They surfaced evidence that “company culture” will often reflect the personality of its CEO. In turn, the CEO creates a significant impact on the performance of the company itself.
Do you think, therefore, that a CEO isn’t thinking about culture if his or her behaviour might affect the bottom line?
Dr. Traphagan further asserts that, “We need to stop using the term “culture” to talk about what’s going on in our organizations,” in part because, “Corporations and other organizations do not have cultures; they have philosophies and ideologies that form a process in which there is a constant discourse about the nature and expression of values, beliefs, practices, ideas, and goals.”
Is that so?
Deloitte suggests “employee engagement and culture issues exploded onto the scene, rising to become the no. 1 challenge companies face around the world” in research it released earlier in 2015. If that is the case, how is it that senior leaders are looking the other way when it comes to “company culture”, as Dr. Traphagan is blindly suggesting. How is it that corporations and other organizations “do not have cultures” if it has become the number one issue that needs to be addressed, according to CEO’s and senior leaders?
In 2007, levels of employee engagement at TELUS (Canada’s fastest-growing national telecommunications company, with $12 billion of annual revenue and 13.7 million customer connections) sat at 53%. I know what “company culture” is, and I know how important it is because I joined TELUS from SAP the following year, in 2008. That year began a quest by the company to make the shift from “good to great” by focusing on all facets of its “company culture” in order to indeed put its valued “customers first”.
Through the introduction of “company culture” pillars such as Bravo (a recognition program), We Give Where We Live (a community investment and philanthropy mission), TELUS Leadership Philosophy (an open behavioural leadership model for all 43,000+ employees in eight countries), Connected Learning (a formal, informal, social learning model), Habitat Social (a collaboration technology platform), and of course Customers First (a seismic shift in the way TELUS interacts, listens and conducts business with its customers) employee engagement rose to 85% and a multitude of business and customer metrics rose in concert.
Whether the organization is Goldman Sachs, Ford or TELUS, you can rest assured Dr. Traphagan that “company culture” is as important an issue as anything in the organization these days. Some firms are succeeding better than others. (as is evidence from the woeful state of employee engagement across the world)
But the term “company culture” should not be retired. You state that we, “need to develop a way of talking that captures the discursive nature of group behavior and to think in terms of all groups as processes that shape and are shaped by individuals.”
An organization need not forego “company culture”; it simply ought to work with its employees to craft common operating principles (behaviours, tools, processes, and so on) that connects the entire organization as one. Sub-cultures in varying geographies or countries is rather obvious. In fact, it should be encouraged.
But for organizations to succeed in the 21st century there needs to be a “company culture” such that the employees and its leaders are working together under a common language — a unified DNA — to do as Peter Drucker stated when on the topic of defining the purpose of business, which is, “To create a customer.”
Dropping the term “culture” from the lexicon of organizational and corporate consulting and research would be a horrible step to take.
It’s perhaps as short-sighted as me eating cereal again over my iPad while reading about such a concept.
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