Wednesday, June 12, 2013

"Culture eats strategy for breakfast"

I sat at my seat in a Hamburg Hall classroom last Friday morning not to attend a class, but to check out a series of lectures on "IT Culture Transformation."  I wasn't quite sure what to expect until I heard these words leave Francois Gossieaux's mouth during his presentation of Human 1.0.  I would spend the rest of my Friday and Saturday hearing how culture was truly the key to good strategy for a myriad of reasons.  This was not only an eye-opener about this particular industry, but also a shocking revelation as to how good some people (including yours truly) have it in this world.

Throughout the course of the weekend, we looked at various CEO and CIO strategies that failed.  They wanted to trim the fat and get more lean.  They sought industry dominance at the cost of human capital if it meant more dollars to the bottom line.  Instead of focusing on the people, they focused on their shareholders and profit/loss statements.  Granted, some companies can churn through staff and still be successful, but the ones that are the most successful and the ones you really want to work for (e.g. Google, Apple) are the ones that create a culture that people want to be around.  As Francois got deeper into his lecture, he showed how human nature always preferred to be homogeneous.  We didn't want people with different ideas and ideals, but ones whom were most like us.  We relate to them more easily, but somehow it also makes us more insular.

He gave an example of one of his tests for students and companies alike.  He would get a small group of them to form a circle, and another group on the outside to form a ring around them.  He would hand the inner group a piece of paper or a ball, and ask them to pass it around to the next person until it got all the way around.  The outer ring was not permitted to help or say anything to the inner ring.  Francois would set a time limit of say 15 seconds, and each time through, he would stress that the next iteration had to be one second faster.  The inner group would keep getting closer and closer together and at some point, fail.  The outer group would have other means of problem solving, such as everyone stacking their hands and having the item pass through each of their hands vertically instead of passing horizontally, but this thinking outside of the box was not available to the myopic inner ring.

When we create a culture that has its own inner ring and doesn't foster creativity, innovation, and new ideas, we falter as individuals and groups alike.  The key is for strategy to come from the top-down, and the culture must come from there as well.  Thankfully, we saw examples of good strategy and culture from our CIO Panel, which featured the likes of Anuj Dhanda (PNC Bank), Liam Durbin (Block Communications/Pittsburgh Post-Gazette), and Traci Vaughan (US Steel), and also from Chief Communications Officer Bob Evans (Oracle).  They obviously were in industries that were not quite alike, but found good ways of getting their employees to be part of the team and manage to keep their positive values globally.  Even if certain countries differed in culture, there were still core values of things like trust, honesty, and openness that were stressed by all three CIO's.  And as much as one can put together some lame marketing scheme style culture, the end product will show its true colors.

One other brief takeaway I'd like to add was by another CMU professor, Denise Rousseau.  Her lecture on Evidence Based Management had one thing that was echoed by all of my colleagues as a fantastic takeaway.  She showed how culture was like an Onion.  At the core, you had fundamental values.  Those were the hardest to change.  Each layer outside, such as the values, beliefs, and artifacts were the parts that could be changed with some effort.  But without changing those things, it's all just empty talk.  She emphasized how important it was to instill good core values and have a small set of tenets that everyone should abide by.  Again, it's important that the company also uses this truly instead of just using it as fancy marketing garbage.  If you stress safety, then you should strive to get your accident levels down to 0 (which Traci said they managed to do at US Steel).  If you emphasize honesty, you have to reprimand or terminate someone who is dishonest.  Well, you get the picture.

One of the big things my employer stresses is Professional Development.  They offer limitless opportunities for you to get educated on topics ranging from Customer Service to Project Management, and even how to use software like Visio and Dreamweaver.  What they've come to realize is that when you invest in your employees, the returns are substantial.  Sure, there are people who will take advantage of the opportunities and move on to other organizations.  But the standard they set of really caring about their employees and wanting to see them advance up the ladder is highly encouraging to our staff.  We're given the opportunity to take courses that we're interested in even if they are not related to the job we currently possess.  This shows my employer's dedication to advancing the careers of their employees.  Considering how many people are still here after more than 20 years is a testament to the good example of how my company retains employees and rewards us for wanting to learn to do more.

Culture is all about setting a good precedent for your company.  And in the readings this week, we saw how IHG was able to turn around their poor efforts into a profitable one.  In discussion, we saw how Southwest made their culture into a fun one with accountability to encourage their employees to perform at a high level.  So while strategy is important, it's the cogs and wheels that turn it (i.e. the people) that can define it as a success or a failure.  And without a good culture that starts from the top-down, success is rather unlikely.

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