Leading Workplace Change™

As you might expect, I am interested in news articles that work to explain through insider and expert interviews the reasons for the success and failure of an organization.  At some point in the articles, there are usually cryptic lines about the need for a “change in culture” or “kudos to a cultural strength.”  These lines are many times used as short-hand to describe underlying reasons for the organization’s success, failure or what needs to be done for future revival. 

One recent article in the New York Times chronicling Citigroup’s drastic decline ended with an intriguing statement about what will be required of Citigroup if it wants to succeed as a bank subject to regulatory control.

Safe and soundness has to be no less important than growth and profits….

This combination of characteristics surprised me.  I riffled through my culture data base to find an organization that had safeness/soundness and growth/profits in their combination of cultural drivers for success.  My first instinct was that the drivers were opposites and impossible to balance.  

I kept on looking and finally out of hundreds of companies in our data base, found a couple of companies with this combination of cultural values – they were large and venerable utility companies, leaders in a regulated industry.  Their focus on growth was to achieve greater operational efficiencies for customers and shareholders - safety was tied to technical innovation to ensure the health of employees and the public.  And soundness related to financial and budgetary practices to ensure profitability and a fair return to shareholders.

Of course, it makes sense to find culture best practice examples for the new Citigroup in the utility industry that has gone through its own journey through de-regulation and back.  We are beginning as a society to think again of our banks as part of a national and now a global financial system.  It is good to know that balancing “safe & soundness” with “growth & profits” is possible and a proven recipe for success in industries subject to regulatory control.

Tags: Corporate Culture Observer, News Commentary by Terri – older, but wiser white lady
No Comments »

Admitting to a mistake is never easy.  And as a leader, it is both an important capability as well as an action that needs to be done thoughtfully.  In late October, when I read in the papers about former Federal Reserve Chairman, Allan Greenspan admitting to a fundamental flaw in his thinking about the self-correcting power of free markets, I sat up and took notice. This was not just an expression of regret about a day-to-day action, it was an acknowledgement of a flaw in one of his own fundamental beliefs that directed his decisions in guiding the U.S. economy.

Notice in the following statement made by Mr. Greenspan before the House Committee on Oversight and Government Reform that he includes a personal reference and an emotional response to his mistake…”Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…”  He did not go into elaborate detail at the Congressional hearing, but he took responsibility for his mistake and later in the hearing, briefly noted an idea for corrective action.

In the world of organizational culture, how current and past leaders respond to mistakes has profound implications.  In cultures where adaptability and innovation are engrained, leaders regularly model both consequences and learning from mistakes by doing it themselves and rewarding others who do the same.  It is a natural part of how they lead to encourage creativity and make it safe for people to commit to stretch goals and hold themselves accountable for achieving them.

The learning for leaders is that their capability to openly acknowledge a mistake is a powerful tool.  It allows for people within an organization to move forward more quickly past blaming to action.  No one ever promised that being a leader would be easy, but no matter how you feel about Allan Greenspan’s policies, following his lead in a time of turmoil is something to think about.

Tags: Leaders Leading, News Commentary by Terri – older, but wiser white lady
1 Comment »