A Company’s Culture Shapes Performance
“‘The last place I worked,” a young bank loan officer remarked the other day, “nobody ever noticed you until you did something wrong. “Consequently, we spent most of our time trying to avoid making a mistake.”
In contrast, he added, “where I work now, the top people have a positive outlook. They make the time to call people when they’ve done something well and congratulate them. So instead of worrying about mistakes, we make an effort to do big things.”
It seems like a fine difference, yet corporations are now spending millions trying to discover what kind of culture they have and, in many cases, trying to change it. General Electric Co. talks about a new climate of “constructive conflict.” Bank of America has a program called “Visions, Values, and Strategies.” Atlantic Richfield Co. recently engaged outside experts to assist in a “continuing self-examination.”
What’s behind all this in most cases is a change in the business environment. Heightened competition, slower growth and changes in government regulation all create culture shock.
The problem, however, is that a corporate culture isn’t something purchased off the shelf. It develops over the years, based in large part on patterns established by people at the top. There are authoritarian-type firms, where the orders flow downward and self-criticism is stifled. There are companies that create unnecessary unrest among middle managers by fostering too much head-to-head competition. There are others that can’t seem to do anything except by committee.
Since top managers are often part of the problem, they don’t recognize the culture they’ve helped create. “One of the features of corporate culture is that the beliefs and habits of the company’s leaders can anesthetize them against problems that from the outside are painfully apparent,” Arthur D. Little consultant Homer J. Hagedorn wrote in a recent issue of Across the Board, magazine of the Conference Board, a New York-based business research organization.
So in come the outside consultants to analyze the situation, and the immediate reaction around the coffee urn and water cooler is, “Who are these guys and what do they know about our business?” That’s only the beginning of the resistance.
Robert Metzger, an Irvine-based consultant, has tackled culture problems at a number of major banks and other financial institutions. Mainly, the institutions “would like to change the attitudes and functions of the people in the branches to make them less passive-reactive and more aggressive and sales-oriented,” he says. “But the No. 1 problem is that these aren’t sales people. They probably joined the bank so they didn’t have to go into sales. It’s like trying to make a limp piece of rope stand up.”
He contends that few of the financial institutions have really faced up to the fact that they need new people. And even if they have them, they’re mired in pre-1980s policies and procedures. “Top management doesn’t understand the enormous change required.”
Top management also sometimes gets heavy-handed and looks for an instant fix. At one Los Angeles financial institution, branch managers were told they were expected to work until seven or eight at night and cut the mid-week meeting time by holding meetings on Saturdays.
One typical goal of culture change is to reintroduce some entrepreneurial spirit in a big bureaucracy. GE’s effort is designed to convince its managers that instead of the “one strike and you’re out” kind of climate that existed previously, the company now wants to promote some risk-taking.
Not all cultural problems are quite so cosmic, but they have considerable impact on performance, nonetheless. Sometimes it’s a question of top managers treating everyone below them as subordinates rather than as co-workers. This culture manifests itself in complaints like the one from a fast-rising young bank manager who says one boss makes her job unnecessarily tough “by repeatedly sending me on little errands he should run himself.”
Or it shows up in criticism given far more readily than praise.
