Tag Archives: corporate culture

Four Keys to a Happy Work Environment

I’ve been thinking about work, and what makes working at a company enjoyable. What any person might like or dislike about work can vary widely, of course, but I’ve worked at a lot of different companies, and across those various companies I’ve found four main factors that determine how pleasant work at a company might be:

  1. The wind is at your back
  2. Things work smoothly
  3. Common commitment to a mission
  4. Strong management team

Wind at your back means that the market is moving your way and revenues are coming easily (as easily as they ever do). Like you’re Instagram and everybody wants your app. Or you’re Caterpillar during a construction boom, when people are clamoring for your tractors. When the wind is at your back, everything is easier. Your decisions all seem right, and if you happen to make a mistake, it just doesn’t matter that much. Your colleagues are in good moods, your bosses are happy with your work, and bonuses are in your future. When the wind is at your back, work almost seems like play.

Having your company work smoothly is an internal state, rather than one dependent on the market. Processes are in place and lines of communication are established. Objectives are set, each group is executing on those objectives, and everybody is in synch. When your organization is firing on all cylinders you feel productive, even if the wind isn’t at your back. Sure, maybe you could be growing faster, but you are getting things done, and that feels great.

Even if you aren’t all in synch, you can all be committed to the same mission. And this doesn’t need to be a feel-good, change the world sort of mission. Going back to Caterpillar, if everyone is committed to the mission of making great tractors and selling the heck out of them, then you are all on the same team, heading toward the same goal, and that is fun. You might be facing a headwind (housing crisis!) and your company may not be very organized, but at least you are all in it together, pulling in the same direction.

If you’ve got good management, everything is a little better. A good boss makes you feel appreciated, like your contributions actually matter. And if your contributions matter, you will work harder on those contributions, and feel better about that work. Good management can make work more rewarding, and more fun. Bad management, on the other hand, makes you dread coming to work each day.

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CEOs: Imagine You Are The Janitor

OK, I promise this will be the last entry on cultural change. At least for a while.
But I wanted to return to the topic that started this arc: changes in corporate culture. You might recall how I postulated that a company could change its culture only if that change started at the top. The CEO needs to live the culture that he wants the whole company to have.

But that raises a question: can a CEO, from his top of the heap position, even successfully think through cultural issues? Go back to my prior example, where there is a culture of being late to meetings because the CEO is always late to meetings. If the CEO is always late, but nobody is late to the CEO’s meetings (because he is the boss, after all), then maybe he doesn’t even realize that this culture exists, and that it wastes everyone’s time. His time isn’t being wasted, so perhaps he doesn’t even see the problem.

If this is true of the CEO, it is likely true of other high level executives, depending on the size of an organization. So how can these oblivious executives work to develop a functional corporate culture? Here I turn to the work of John Rawls, a titan of political philosophy.  Rawls tried to develop a political system that maintained the liberty of markets while countering the tendency of market economies to perpetuate economic disadvantages.

In his masterwork, A Theory of Justice, Rawls balanced these two competing strands through an invention he called the veil of ignorance. Rawls suggested that policy makers devise policies via a thought exercise in which they ignored their actual station in life and imagined how the policy would affect the least advantaged person in society. By operating behind a veil of ignorance as to how policies would affect them personally, they would develop policies that were fairer to everyone.

Maybe CEOs and other top executives should sometimes step behind a veil of ignorance. As a thought experiment, it’s not really that hard. Ask yourself “How would the average employee feel about this? What about the lowest ranking employee?” Only a CEO whose ego has been stoked to l’etat c’est moi proportions will not be able to imagine how his underlings might feel. In the case our always late CEO, surely he will recognize how people feel when he is always late to their meetings.  And if he is so Louis XIV that he is truly unable to imagine how others might feel, then that company’s culture is utterly doomed and everyone should just leave.

Is Corporate Culture The Same As Country Culture?

I recently posted about corporate cultures, and how the only way a corporation can change its culture is from the top. Based on some of the feedback I received I’ve decided to expand my scope and explore a larger cultural change: how the United States might change some parts of its culture. For example, one aspect of America’s current culture that seems problematic is that we want all kinds of services (Medicare, Social Security, strong defense, good roads, etc.) but we want the lowest taxes possible. Those two desires are incompatible; a culture that emphasizes taking without giving will prove challenging in the long run.

In my prior post, I discussed that a change in corporate culture requires a CEO who is willing to push that change. In the case of a country, who might play that role? You would naturally think the president, but we know that won’t work. Plenty of recent presidents have talked about changing the culture, but none have succeeded. Hell, none of them could change the culture of a few hundred people in Congress, let alone a whole country. And that’s not really surprising; a country is not a hierarchical structure the way a company is, so people have no reason to necessarily follow what the leader says.

The president could try to lead by example, or by using the bully pulpit, but I can only imagine the furor  that would erupt  if a president (or governor, or senator, or mayor) announced that “OK people, your constant desire to get lots while paying little is complete crap; going forward we are all going to be more realistic.” No, that wouldn’t work at all.

What if all our leaders teamed up? Suppose a whole slew of politicians – national and local, democrat and republican, male and female – got together to announce an initiative aimed at realism. This could be risky, since taking a stand isn’t really what politicians do; they hate being out on limbs by themselves. But that is why they would team up with members of the other party. After all, as I noted in my prior post, cultural change requires leaders to actually lead. Then they could get business leaders on board; everyone from Warren Buffett to Charles Koch. Throw in some celebrities – nothing happens in America without celebrities – and then maybe we’d have something.

It’s possible that this is nothing but a pipe dream. Can we really expect politicians to team up in order to lecture voters? Probably it will never happen. But maybe we should expect more from our leaders.

How to Change Corporate Culture

I was recently at an all-day retreat for an organization that is working on changing its culture. Like many fast-growing companies, this group is finding that what worked when it was smaller is no longer working. Ad hoc lines of communication break down as organizations grow. Old timers don’t trust newcomers, and the newcomers chafe under the mistrust. This is a common problem here in Silicon Valley, where growing companies are the norm.

Part of the challenge at this company, and at most companies in this position, is that founder who has gotten the company this far, often by being involved in every decision, is unable to let go even as she brings in experienced managers underneath her. Note that I am using female pronouns here, but this is definitely not a gendered issue.  If the corporate culture is one where nobody can act without founder approval, it will be challenging for the company to grow, no matter the gender of said founder.

More broadly speaking, this raises the question of corporate culture in general, and whether it can change without the people at the top also changing. Generally, corporate cultures reflect the personality of the founder; thus Oracle has a reputation as aggressively cut-throat, like Larry Ellison, while Microsoft long had the reputation as heartlessly numbers-driven, like Bill Gates.  James Baron, a professor at Yale, is one of the leaders in studying organizational change, and he notes that “founders impose cultural blueprints.” With older companies, a culture develops over time; IBM built a culture that was bureaucratic and risk-averse, and only an outsider like Lou Gerstner could change it.

Studies seem to indicate that corporate cultures will not easily change unless that change is driven from the top. This often means a founder ceding control to an outsider, but it can also mean a CEO committing to change and making that commitment public and real. Here are some factors which are essential to a CEO successfully changing a corporate culture:

  1. The CEO must announce the new values
  2. The CEO’s direct reports need to be on board with the changes
  3. A plan should be in place to drive these changes to all constituents
  4. There has to be a cost to violating the new norms; apostates must be punished.

The most important thing, however, is that the CEO needs to live the changes. Corporate culture comes from the top, and if the top doesn’t change the rest of the organization will see the announcement as empty words.

For example, what if a company has a culture of people showing up late for meetings, or not at all? Everyone at the company might agree that this is a cultural artifact they want to change. But most likely this culture exists because the founder is usually late for meetings, if she shows up at all. There are a number of reasons why a founder might act this way, but it doesn’t really matter why; what matters is that as long as she shows up late, everyone else will too. The only way for this culture to change is for the founder to embody the change.  That’s the thing about leadership; it requires you to lead.