Monday, April 26, 2010

Is your company's culture out of alignment?

Post 474 - Culture is a body of learned behavior that goes on over time. A company's culture determines how it responds to everything and anything. Many years ago, Aetna bought a "vanilla" group benefits company. It only had 3,000 employees and Aetna at that time had about 50,000. Aetna's CEO didn’t think it important to assimilate the new company into the its culture. After all, there were only 3,000 of them - what impact could they have?

The Aetna culture was pretty loose back then. But the "vanilla" company's culture was incredibly tight and disciplined so everyone was on the same page. They wound up taking over the Aetna culture and destroying what had been in place for more than a hundred years. Today, Aetna has one line of business - group benefits - instead of the five or six they had before the acquisition. About 18-months after the acquisition, the CEO was quoted as saying that had they understood the importance of culture, they would have approached the acquisition very differently. Of course, by then it was too late and he'd lost his job ... to one of the vanilla guys.

The following are some signs that your company's culture is out of alignment:

- Management is stretched to the limit. All real decisions are made at the top. Employees "upward-delegate" and thus avoid accountability for their actions.

- Gossip is widespread, attributing sinister motives actions taken by senior management. Employees show little interest or awareness in market conditions or in the state of the business.

- There are many different "custom" processes in place and no reliable outcome measures. Turf wars and conflicts between departments and functions are common.

- There's a pervasive atmosphere of complaining, blaming, and accusations of favoritism. Petty grievances and HR issues are common.

- People complain about overwork, that there's no time to "do my job," and "too many meetings." Employees are frequently absent without notice.

- Employees show disdain for change efforts and keep doing things the "old way."

- Employees are uninterested in events outside of their immediate work areas and are reluctant to take on new responsibilities.

- Passive-aggressive behavior is quite common, with employees generally unresponsive and reluctant to talk with management.

- People continually need reassurance about job security and the future of the business.

Any of these signs are troublesome. A company with four or more has a culture that's out of alignment with the requirements of the marketplace and this represents a significant threat to its future success. Companies with an adaptive culture that's aligned to their business goals routinely outperform their competitors by 200% or more. To achieve results like this, you have to figure out what your culture is, decide what it should be, and then move everyone in the desired direction. Tomorrow, we'll explore ways to change culture.

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