Comments

Val, thanks for linking this article from tompeters.com. It has so much to say about a lot of issues, leadership and talent, along with effectiveness of mergers and difficulty with blending cultures, and more. I'd recommend to everybody here: Read it well.

Posted by cathy at June 14, 2005 11:20 AM

Val - thanks for the post. I tend to agree with "culture" as paramount.

An example is Phil Knight leaving the CEO/Chair [Fortune magazine June] post at Nike - largest athletic shoe/apparel company in the world - and now the question is "how successful will Nike be".

And how successful will be the [newly acquired] "Starter" brand Nike owns that is in Wal$Mart - and naturally produced in China and Asia as are most Nike products.

Posted by Sean at June 14, 2005 11:59 AM

Smells like politics to me!

Posted by Noel Guinane at June 14, 2005 2:34 PM

Culture makes or breaks most companies and mergers. The problem is that it is very intangible. Traditional management is really only comfortable with stuff it can see, touch, feel and most importantly measure. I think how modern orgs deal with intangibles is the the biggest challenge facing management today

Posted by PaulH at June 14, 2005 3:41 PM

A sad thing for the Dean Witter brand/culture.

I still have vivid memories of watching their old black & white historical ads as a kid. I didn't even know what a "Dean Witter" was, but when the old man got talking, I was moved.

(Noel, it's an acquired taste. Like coffee. The smell always wakes me up in the morning!)

Posted by Jason Kerr at June 14, 2005 3:55 PM

"A Strategist Who Struggled as a Manager", NYT.

Nothing speaks better than this article and I totally believe it is simply true for Purcell's fall.

Culture..mm. I dont think so!!

Posted by Paradox Valley at June 14, 2005 4:01 PM

I think "corporate culture" is in reality whatever the CEO of the moment says it is and everyone in the organization dances to whatever that tune is ... until another CEO comes along and the song changes.

What's interesting about Wall Street firms in particular (having worked for a couple) is that they really are the ultimate in intellectual capital. There is no physical plant worth talking about. The power resides with the deal makers and if they walk out (or kick up a hell of a fuss), the firm either meets their demands or it crumbles. I think Jack Welch for example, learned this the hard way when GE tried to run Kidder.

Posted by Noel Guinane at June 14, 2005 4:01 PM

I would think 'culture' is more to do with whats been longstanding in the firm (say in the corporate floors of NYC for a firm like Morgan Stanley).
When a CEO tries to change a successful(=profitable) culture, it doesn't go well with the rest of the top dogs. To add to the distress, the firm's share price drops and people in the top brass feel insecure! Late realization I would think on the part of Morgan Stanley..

Posted by Paradox Valley at June 14, 2005 10:55 PM

In Dean Witter Morgan Stanley, we're talking about a merger that took place 8 years ago, 8 years wasted in internal political infighting. The combined firm is now set to fragment. I think this is a useful example of how internal politics can damage a company.

Posted by Noel Guinane at June 15, 2005 3:42 AM

Culture is simple, it is just 'the way we do things here.'

I well remember Tom's wonderful description of his experience as a consultant delivering 'how to do' corporate culture in the 1980's - Tom called it 'legalised stealing' (I just love that!!!) if my memory serves me correct - you simply cannot teach culture.

And as a ps the most effective way to change a culture is to blow the thing up and start again

Posted by Trevor Gay at June 15, 2005 4:51 AM

Companies buy other companies because of great products/services or a large customer base. I would love to reach the point (in how we deal with culture) where a company bought another to "get it's culture". It would show that management had reached the point where it was comfortable and really understood how powerful a culture is

Before you start sniggering think about it! If we are saying that an effective culture is a powerful competitive tool then isn't it also an asset as well and therefore valuable in the market?

When my company got bought (a year or so ago) the snr managers did a cultural inventory and then stood up and said that the company they had bought was superior in culture to their own and thats what they wanted the original company to look like. (the exact wording wasn't that direct but that was the message). Now whether this can happen or not remains to be see but at least the intent was there.

The area of culture and management and how to improve or a culture is an area of huge potential in the management thinking arena (mainly because there is not much on it now!)

Posted by PaulH at June 15, 2005 6:26 AM

Interesting thoughts Paul - real alternative thinking - I love it.

My view is simple - surprise surprise ..... I just don't think we can effectively measure intangibles like 'culture' but I think you have a real point here.

I don't really know how one can 'buy' someone elses cutlure but I hear what you say and it intrigues me too.

Maybe you should write a book about it - happy to work with you on it.

Thinking about it .. maybe we could all combine and write a book - Noel, Sean, you, me and any other regular contributors to TP blog - how about it guys? :-)

What about the title - 'Can you BUY a culture?'

Posted by Trevor Gay at June 15, 2005 6:54 AM

"Profit and Sexy/Aggressive Business Culture" - Trevor - Noel - Paul that may be a book title to pursue! Money, sex, violence sells in the free world.

The Nike deal interests me since I bought their shoes in 1972 right after they started - and just got 2 pairs yesterday [$300] Nike Shox TL2 running shoes - free shipping nike.com. 30+ years of loyalty to one brand.

Phil Knight of Nike defined and built the culture, like Bill Gates of Microsoft. Google and Yahoo and Virgin and Adidas are other examples.

Phil is leaving though ... so the "culture" is on the line - when he'd speak to associates one could hear a pin drop and people would sometimes tear up because they soooooooo believe in the brand/culture and the INTEGRITY OF PHIL/NIKE.

I believe that the culture can be cultivated:
1. Build a campus like environment
2. Spend heavily on R&D
3. Keep associates lovemarkish toward the brand
4. Have fun - INTEGRITY IS KEY TOO
5. It is about the TALENT - keep them happy

Actually I defer to Dr. T because I seem to be repeating his mantras - the main deal to me is yes I believe even in a business of 3 people "culture" positives can yield fabulous benefits.

PS: the modest 3 mi. run in the new black/red shoes was awesome this morning.

Posted by Sean at June 15, 2005 7:29 AM

Trevor, that's a great idea. My advance would be a mere £500,000 and a modest 40% royalties with final say on all editorial content. Naturally, my name would have to come first on the cover as would a picture of my big nose and ears on the inside flap. Also, an upfront five page bio detailing among other things my fictional mountain climbing adventures in Papua New Guinea and my remarkable ability to hold my breath under water for up to three minutes. These things are non-negotiable.

As you can see, I'm a breeze to work with!

Posted by Noel Guinane at June 15, 2005 8:39 AM

You drive a hard bargain Noel!! - can we negotiate about the 40% royalites - I was rather hoping to take 90% - as you know I've always been a fair man and a great team worker :-)

Posted by Trevor Gay at June 15, 2005 8:48 AM

Once my half a mill advance is in the bag, we'll make it 30% royalites and say no more. Mind you, it would need to be in my bank account by Friday.

Posted by Noel Guinane at June 15, 2005 11:11 AM

Trevor - I don't think you can measure culture exactly but you can drive awareness of behaviours that drive a culture. The model that was used at our place did a questionaire (a looooonnnnggg one!) and from that created a model that showed 12 behaviour types in 3 areas looking at whether we had a supportive culture, or an aggressive defensive culture etc. It looked at behaviours such as supportive, oppositional, perfectionist etc. This is taken at company and manager level so that people can look at where they need to work in their training/development planning

I do believe that a lot of culture is actually bottom up - not top down. It happens because of the types of people you hire not what the boss says. There are external influences too - public quoted companies tend to be more driven. Many people look at taking a company public as a financial thing - but a lot of change happens culturally as well (underestimated in my book).

Posted by PaulH at June 15, 2005 11:11 AM

I agree that we can't mandate behavior and new staff always pick up on the habits of the old staff, but essentially there's nothing in any company that the top leadership team, especially the CEO, either tolerates or signs off on. That's why when I find dishonesty in a company I'm very suspicious of upper management because they're either turning a blind eye to it or are actively encouraging it while pretending not to.

The thing that is regrettable to me is that 'corporate culture' is homogenizing. There is not that much difference anymore between one company and another, especially when they are large and publicly quoted.

Posted by Noel Guinane at June 15, 2005 2:14 PM

Noel - My final offer is quarter mill from you in my account by Saturday! ...and 95% royalties to me from day one - that is it my friend - no more negotiation! I have always been very fair!

Posted by Trevor Gay at June 15, 2005 4:14 PM

Now I know how you got published! Simplicity may well be an honest, sincere look at a large organization, but I see now that it is merely the veneer masking a ruthless business mind.

Posted by Noel Guinane at June 15, 2005 4:32 PM

Ruthless indeed - I must have you both as key financial advisors. $$$Dollars though please - EU thing is a bit shaky ...

Posted by Sean at June 15, 2005 6:18 PM

And an ultra thin veneer it is ... sheer evil genius ...

Posted by Sean at June 15, 2005 6:33 PM

Sean and Noel

The iron fist in the velvet glove springs to mind :-)

Posted by Trevor Gay at June 16, 2005 1:27 AM

Noel wrote - "The thing that is regrettable to me is that 'corporate culture' is homogenizing. There is not that much difference anymore between one company and another, especially when they are large and publicly quoted."

Noel - I am curious about this statement. I think there are massive differences between companies (although publically quoted, in my limited experience tend to be driven and boring).

I have spent a lot of time consulting (IT stuff) in many large companies and they are very different. One thing I find funny is people talk alot about GE culture under JW. My (limited) experience of GE (2 different areas) was that the cultures were very very different.

One big concern I have is around publically quoted companies. The shares of these companies form the bedrock of our pensions and investments and yet so many of them are Talent Toxic. If our best people want to work for interesting, quirky, exciting, environmentally friendly, socially concious what hope have the big boys?

Note - You may not agree that it is the job of companies to be environmental and socially credible - but if the top talent want this then this has to be offered along with the salary, pension, healthcare etc to attract them

Posted by PaulH at June 16, 2005 2:21 AM

I don't disagree, but GE is a conglomerate, much as it pretends not to be and you might expect cultural differences between businesses in a conglomerate. I have to say though that in my limited experience of GE, there were no 'culture' differences I could discern between for example GE Capital in New York and GE Transportation in England. However GE is now undergoing 'culture change' with Immelt looking to put his stamp on the business which is unlikely to happen overnight. I expect some differences between the way Jack Welch ran it and the way Jeff Immelt wants to run it may become more glaring as the company goes through the adjustment to what the top management team now says they value.

I think the big boys are aware that the environmental/social thing is what young, talented people want and are trying to emulate those on the cutting edge, but from what I've seen the sincerity isn't there - it's just platitudes and lip service.

I have a couple of questions for you Paul - what are your views on 360's and also on the call to increase HR's importance?

Posted by Noel Guinane at June 16, 2005 2:54 AM

HR aren't important - they are essential!

A good HR person: Makes you think, makes you question, Pushes you, develops you, keeps you honest, works outside the hierarchy, looks out for the staff, reminds you of the legal side and process, keeps you humble, questions your decisions, deals with the admin. But most of all they are out there - not stuck in an separate office all day

I am lucky our HR person is one of the most talented people I have ever worked with. She gets involved (hands on along side my boss) on advice, recruitment, remuneration, disciplinary etc. She is brutally tough on us managers. eg salary reviews "Ok you say that person is great - where's your evidence - justify your position." She makes sure that process is right and that our integrity is spot on. She works hard on the management team's personal development and group interaction. She is also there when things get a bit rough too - there are times when a big hug is very welcome.

Posted by PaulH at June 16, 2005 6:33 AM

360 are are very good providing they are carried out in the right way and that the results are used to drive improvements in personal performance. I think it does require a culture of honesty and integrity from all parties to work well.

Posted by PaulH at June 16, 2005 6:48 AM

Having spent fifteen years in the investment business and 15 years in retail banking, Purcell is the poster-child for what's wrong with the financial industry. The industry has made, at almost every turn, the wrong decisions about how to respond to the evolution of their business. I don't believe, that on a fundamental level, they understand their business or their customers. Corporate culture is a religion, it's not a mission statement. No attempt is being made to change or address the difficiencies that exist in the financial industry and it shows. Until Tom Peter's ideas are embraced by the industry, it will continue to malfunction. And the public will be the poorer for it.

Posted by R. P. O'Fallon at June 16, 2005 11:43 AM

When I first entered the workforce, HR was a small department called Personnel and basically they held preliminary job interviews, kept files (not tabs) and organized the company picnic and the annual blood drive. In those days, almost two decades ago, the legal dept. was there to inform you of your legal position and there was no confusion - everyone knew that the legal dept. were on the side of the company; they weren’t pretending to be your friend.

Since then, I have seen HR's influence grow and expand. They interfere in many aspects of a company's operations without in my view adding anything significant to their performance. If this weren't bad enough, many of the HR people I have known have been outright lazy. This idea that they know all of the talent out there, frankly, they hire headhunters to do that job for them. I think we should let managers get on with their job without having a special dept. to second-guess them. By installing themselves as the middle-men (or women) between levels of management and employees, HR are gaining a position of incredible power, but beyond the necessity for keeping up-to-date employee files and doing other mundane administrative work, I cannot see why any business needs anything more than a Personnel dept.

Thank you very much for your point of view. I have known some professional HR managers too, but am concerned by where I see this trend leading. If you wouldn’t mind, perhaps you’d explain why exactly you think HR are indispensable. It’s very possible that I am missing something.

Posted by Noel Guinane at June 16, 2005 2:25 PM

Noel I suspect that no one would be able to convince you.

I like working somewhere where I am stretched to be the very best I can be, where I have partners in some of my peers (not just HR) who are looking out for you and helping you improve (and you do the same for them).

I want HR to interfere but in my thinking not my doing. I want to improve what I do and I am not too proud to listen to anyone (I don't always take the advice - it's always my decision at the end of the day)

Why do I think this is important - because most managers I know need support and help. Usually the ones who feel they don't need it actually need it the most. Do HR people have to pull their weight and add value - absolutely.

I would like to know what your concerns are about the trends you see. Surely everyone who is contributing to making the place of work a successful, fun, dynamic, creative, energetic place is welcome at the table. What are you scared of? The fact that 99.9% of most of the management practice is the stilted, boring, soul destroying, overly complicated rubbish going?

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Posted by PaulH at June 16, 2005 3:53 PM

It's true that I'm not easy to convince when I've thought about something, but I always keep my mind open because you never know; there's always the possibility that someone else has a better idea. Since I can tell you also think carefully about your opinions, I am interested in what you have to say about HR.

It sounds like you work for a very nice company. I too like a work environment where I am stretched and while I am reasonably self-motivated, I also like working off my peers since it's more fun to work off people. I mean, win or lose, how can you have a debate when you're the only one speaking, or a race if you're the only one running?

It's just that I've seen in some companies that HR is beginning to function just a little bit like an entrenched communist bureaucracy where you can't move an inch without obtaining advance approval which involves having this piece of paper being signed and stamped twelve times or that piece of paper being filed in triplicate in building 2, floor 3, room 309b with Jean's assistant, Betty, who'll only accept filing admissions from 9am to 11:02am when the shutters come slamming down for her morning cup of coffee. Such an outlook in large corporations may not be restricted to HR, but it's the sort of department that lends itself to bureaucratic entrenchment since their contribution is difficult to measure and their influence doesn't seem to have an end.

In my experience, a certain kind of person is often attracted to working in HR, a person who likes interfering in other people's lives without necessarily having the oomph and energy required to, say, chase them down dark alleys and bash them over the head with policy manuals. Bullying can take many forms and one of the most effective is through paperwork. If you want to destroy someone's soul, forget physical pain - 3 months extensive paperwork filing ought to do the trick!

I've found that in companies where HR's influence has been very strong, so has the political culture, and of course, you know my views on that. So it's interesting to hear that your company is the reverse of much of what I've seen ... any vacancies?!

Posted by Noel Guinane at June 16, 2005 4:44 PM

I am from Brazil and here is veru difucult to apply some new way of administration in our companye, one more time "changes" make people scare!

How can we( new generation of business students)change this ?

Posted by Matheus at June 17, 2005 8:18 AM

I've been thinking of this issue, where two companies merge (or one is acquired by another) and of the problems this generates.

What I wonder is, if it's relatively easy for one person to change due to being immersed into a new corporate culture (we do it every time we change jobs), why is it so difficult for one (or two) groups of people to change when they become part of a new organizational culture?

Posted by JD at June 18, 2005 6:17 AM