Sunday, March 27, 2011

Tackling Your Organizational Culture

I had an appointment with the Head of HR & Learning of a prominent listed company recently.  Upon announcing myself at the reception, I was told that ‘somebody’ will come down to escort me to the meeting room.  I waited.  Soon a presentable young lady showed up to take me to the meeting room.
Just as we were approaching the elevator bank, my escort pulled back and suggested we allow “him” – indicating a suited individual who was waiting for the elevator – to go first.  I obliged of course, but it piqued my curiosity. 
“Who is he?” I asked. 
“He’s our CEO”. 
“And why are we not waiting with him?”
“It’s not proper, right?  I always avoid going in the same elevator with top management”
 This was a young, up and coming technology company.  The CEO may have been 40 or so.  (Did he know what his staff was “doing to him”?)

Got me wondering.  What if my company was the same?  Would I even know?  What have I put in place – systems, processes, structures – to ensure this will not happen to me?

The fact is, I had never given this issue serious thought.  Just assumed we had the right culture!  So what can a CEO do to ensure the culture he wants to establish is seeded, nurtured and thrives in his organization? 
Luckily we have some help from the Gurus of Management!

Ram Charan

One of the best I have come across on influencing organizational culture, comes from Ram Charan, best selling author and consultant for the top F-100 companies and ex-faculty of Harvard Business School.  In his landmark 2001 article, Ram gives us some powerful insights:
  1. It all begins with dialogue
  2. The right social operating mechanisms (rhythmic meetings on strategy, performance review, talent, etc)
  3. Follow-through and Feedback 
  4. Rewards and Sanctions
When you read about systems and processes like these and compare them to a typical Asian situation, you will readily find the typical blind spots.  In my view, for

Asian companies, these are dialogue, feedback and sanctions.
  • Dialogue
For some historic reason, Asia has a problem with open dialogue.  One could trace it to the culture of respecting elders.  But, to my mind, the more important problem

is the definition of elders.  Elder, in Asia, is defined as anyone in a position of authority; it could be the father, the priest or the king.  These people got into their positions the hard way and then do everything possible to keep it that way.

I would additionally argue that North Asia (India, Pakistan…) have been able to wash this away a bit better than the rest of Asia (Maybe, we should thank the British authoritarianism for this).  Proof of my ‘theory’ lies in the controlled economies of China and Singapore and to a lesser extent, even Malaysia.  Political leadership either abhors open dialogue or struggles to ‘open’ dialogue in selective areas.  This naturally carries into business management.  Having an opinion different from that of the Boss is equivalent to raising a rebellion.  Bosses are not told the bad news.  Rather the masses will somehow manage the issue, even if it means pleading with the customer, or other external organization.  Ram offers four ‘must haves’ for a culture that encourages open dialogue: openness (i.e., the outcome is not pre-determined), candor, informality, and closure (you don’t go home without reaching a decision).
I have spoken earlier about feedback.  Here, I will only add a quote from Ram: “By failing to provide honest feedback, Leaders cheat their people by depriving them of the information they need to improve.”  I will also go out on a limb and say that most managers do a poor job of providing feedback because they lack the courage to see the employee in the eye and give negative feedback.  This, in turn, is because they have not been trained in providing non-threatening, constructive feedback.
  • Sanctions
Most companies lack both rewards and sanctions.  But things are getting better and many companies are introducing rewards systems.  Unfortunately, sanctions are still unheard of.  Many argue that lack of reward is a sanction in itself.  I would not agree.  To my mind, there have to be three classes, separated by the majority, who would be ‘average’.  X% above average, a large chink of average in the middle, and Y% below average. 
Why should we continue to tolerate the Y?  By doing this we equate them with average and are doing a major disservice to the average.  Of course, there is lot more to culture than what we've covered here.  Do expect more in forthcoming posts