Napoleon, for all his epochal shortcomings, had many valuable insights. One of them was that one should never mistake the mood of an army for its morale. It may be in a foul – even a wounded – mood, while its morale remains as ferociously martial as ever.
The distinction may be made of corporate mood and morale, as well. It is important not to confuse the sources of these. Corporate culture generates morale, other factors which impinge on that create mood. These other factors include the behavior and actions of senior management.
It is often said that the single most important influence on – even the source of – corporate culture is its leadership. Peter Drucker also once argued that senior management sets the “spirit” of the business. Many even ascribe this sort of thing to the singular individual leader at the top.
The actual situation is a bit more complex than that.
Corporate culture arises from the purpose for gathering individuals together into a collaborative group to pursue that purpose. That is the single most important factor behind the development of the group’s mores. Others include issues as diverse as the surrounding societal culture, the professions involved in the group, the industry, and the competitive environment.
As group cohesion develops and matures, corporate culture arises from the interaction of all members of the group. During this initial period, managers – especially entrepreneurial owners – can indeed be quite influential in this process, though hardly its only, or even decisive, source.
However, once the culture matures, its center of gravity settles down and becomes more stable, less subject to outside influence by external – or even internal – factors.
That is why “leaders” who imagine that they are imparting change on corporate culture are typically only provoking alterations to its mood. These may be defensive reactions to what are perceived as arbitrary and even wrong-headed moves by the boss. Or they may be powerful surges of energy and drive, if the boss has the wisdom – or the good fortune – to strike a chord that resonates with a productive fiber central to the corporate culture.
Corporations can thus have changes of mood, and it is most certainly true that these often arise from the actions or decisions of top management. They can even have unsettling mood swings, every bit as dysfunctional to the organization as such a phenomenon is in an individual.
But changing an established corporate culture is another matter altogether. It cannot be done by decree, nor through persuasion, however earnest. It certainly can’t be done by manipulation. It can happen over time, the equivalent in business of generations – but don’t be too sure of that, either.
But do rest assured that you, as a senior manager, will not be striding onto the stage and changing the fundamental character of your audience. You may tick them off, or encourage them – but they will remain fundamentally who they were before you rode in on your high horse, and will be after you ride off.
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Today’s tip: Yesterday we talked about excess management, its dangers, and what to do about it. With that in mind, please see this piece, from The Economist, about corporate headquarters.
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3 Comments
HI Jim, I have to disagree with you on this one. Although I agree that mood and morale both stem from culture and that mood changes are more frequent, culture does, in fact, change. Not easily, but change it does.
Often, a new CEO brings new MAP and that, in turn, changes what are considered acceptable actions; Lou Gerstner at IBM is a good example of that.
A CEO can enable a culture that allows for real innovation to percolate up from the ranks as Brad Anderson did at Best Buy where ROWE was the brainstorm of two women in HR.
External upheaval can also result in cataclysmic cultural change as happened at Bell Labs after divestiture.
These are true cultural changes and there are other valid examples. One short-term result of real cultural change is an increase in turnover as the people whose MAP isn’t synergistic with the new culture leave.
Hello Miki,
This is a strong critique. I do agree that culture can change, although it is, as you acknowledge, rare, slow, and difficult. What I am concerned about is the facile way “leaders” are told to step it up to being “agents of change.” Just more hype damaging both to the people of whom this sort of ability is expected and to the organizations they imagine they are expressing it on.
I suspect that external events, such as you refer to with Bell Labs, may be more fundamentally behind – directly or indirectly – actual corporate cultural evolution. The creation of market-like mechanisms within an organization can do this as well, but it is very risky.
This may call for more clarification – thanks for pushing back!
Jim, I agree that the idiocy of Wall Street expecting new CEOs to change the culture in a few weeks is totally stupid, but then so are most of Wall Street’s demands and expectations. Cultural change is a long-term function and we all know that Wall Street only does short-term.
Gerstner’s book, “Who Says Elephants Can’t Dance” (that he actually wrote himself) is probably the best explanation of how a CEO effects cultural change; it’s also a good read.
The creation and implementation of ROWE at Best Buy is the best example of cultural change without a cataclysmic driver; it wasn’t broke and didn’t need fixing, but the culture was significantly improved from the bottom up. But ONLY because Anderson had enabled a culture that allowed that. There aren’t a lot of CEOs whose egos are strong enough to invite/encourge/allow that kind of innovation.
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