One “underbelly” response usually occurs in organizations where the focus on achieving results or winning is taken to an extreme.  In these workplaces, missteps are not easily accepted or forgotten and people look for opportunities to take advantage of someone else’s slip-up for their own benefit.  The focus is usually on winning for oneself and not for the good of the company.  This quote exemplifies the impact on employee productivity and morale.

Those that slip-up want to pass responsibility on to others and not be part of the solution.  No one wants to take the blame.  People are afraid that someone else will take advantage of the mistake for their own benefit.  The system for rewards and recognition encourages individual “point scoring” over others rather than teamwork.

There is clearly a feel of internal competition in this workplace.  It would take courage or connections with the “right people” for someone to be willing to try something new. 

Consequently, the learning for leaders is first to be aware and assess the workplace culture you breathe everyday.  Are there any “underbelly” practices that may act as barriers to openly acknowledging and learning from mistakes?  How would you personally intercede to re-direct these undermining practices?  Follow the advice of Peter Drucker as outlined in one of my previous posts and look for pockets in the workplace where folks are regularly more open.  Ask them how they make it safe for people to try new ways of working and hold themselves accountable for both their successes and their missteps?

Finally, a primary role of leaders who want to mindfully re-direct their workplace culture, is to have a personal story crafted as to why they see a shift in behaviors is needed.  Be prepared to be called dull and boring as your job will be to repeat differing versions of the story many times over the weeks, months ahead as people muscle their way through new ways of working.

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.

- An optimistic spirit (companies in cyclical industries)

- An ability to adapt (Goldman Sachs)

- A commitment to a long-term vision (UPS)

I realize, reading about organizational culture best practices is easy, but building for the future by engraining new ways of thinking and working is not.  According to recently passed management guru Peter Drucker, “…changing behavior works only if it can be based on the existing culture.” (Don’t Change Corporate Culture–Use It, Wall Street Journal, 3/19/01).  He gave examples in his short article from 1991 about how Japan and Germany re-built their societies after the Second World War through rewarding new habits based on traditional national values.  Today, it is still the most reliable and quickest way to re-direct an organizational culture over time as well.  An important qualifier is that you must believe the traditional values will support future success.

So how does one start for example to build an organizational ability to adapt and to see change as an opportunity?  Drucker had ideas about this as well.  He recommended seeking out individuals or groups within your organization that already exhibit these habits and ask them how they do it.  Once these attitudes and ways of working are specifically defined for your organization, the next task is to shift recognitions, rewards and consequences in support of the new desired habits and behaviors. 

And for those who find analogies helpful, there are similarities in the process of culture re-direction to the best practices for raising children; so as any dedicated parent knows, achieving results will require patience and a willingness by organizational leaders to model new behaviors as much as using rewards and adverse consequences.

We have been under the gun before.  We pick ourselves up again and again.  The strength of this place is the ability to sustain the peaks and valleys with a positive spirit.

We see this positive spirit emerge in employees from all levels of successful cyclical industry companies and described in a variety of ways.  It can be as simple as an employee taking pride in their work.

I feel personally successful because I keep our aging equipment operational day after day.

And for others, they will describe their organization through metaphors of resilience.

- We are like a strong heart…just keeps beating and beating.

- What we do best is ‘hunker down’ and wait…just believe we are going to make it.  The tide will turn our way again.

For a leader, there are some cautions in how to manage this cultural characteristic of optimistic spirit.  In such companies, employees relate that one of the requirements for personal success is to be upbeat in attitude and message;  if taken to an extreme,this can lead to unintended consequences where the culture makes it difficult to talk about negative or controversial topics.  Accordingly, leaders and managers need to be mindful about finding a balance between modeling and rewarding optimism while at the same time putting in mechanisms to allow critical comments to be heard.

In cultures where resilience is valued and nurtured, an optimistic spirit is a key characteristic to support a company to naturally move through hard economic times and work together to endure.

On Wall Street, one of the companies surviving recent events as an independent company is Goldman Sachs.  And, in an article in the New York Times, (Wall Street, R.I.P. by Julie Creswell & Ben White 9/28/08) it is possible to identify a few clues on how adaptability is one of the keys to Goldman’s survival.

“They change to fit their environment. When it was good to go public, they went public,” said Michael Mayo, banking analyst at Deutsche Bank. “When it was good to get big in fixed income, they got big in fixed income. When it was good to get into emerging markets, they got into emerging markets. Now that it’s good to be a bank, they became a bank.”

Many companies we work with strive for this ability to adapt as epitomized by Goldman, but it is not easy to engrain in a culture if it is not there naturally.  Goldman, founded in 1869 has survived as an independent company for almost 150 years, starting as a partnership and changing to a public company in 1999.  Some of the common practices that I would expect to find supported in their workplace are: risk taking and creativity if backed up by data or experience; and, expectations for individuals to learn from mistakes and to see change as an opportunity, not as a threat.

The learning for leaders is not straightforward in this example as adaptability is one of the rarest culture characteristics we find naturally engrained in organizations.  It is not easy to take culture best practices and apply them wholesale to another organization, even in the same industry.  The best first step is to include a culture diagnosis of your own organization as part of a strategic planning effort. Next, the leadership team will need to model the attitudes and behaviors they decide are required for the organization to succeed in a time of economic turmoil.  The first new attitude might just be - seeing change as an opportunity and not as a threat!

I put on my organizational culture hat and thought that UPS is most likely a company with a strategic cultural driver of commitment to a long-term vision.  With this kind of driver in place, leaders are guided to balance their decisions concerning a possible short-term business gain against how well the decision will help the company achieve its long-term strategies.  Most likely, some portion of profit is re-invested into development of new products or services; and, leaders probably consider the needs of all stakeholders when making strategic decisions.  In the long-run this approach helps the company maintain a stable and committed workforce through good and bad business cycles.

Thus, I was not much surprised when I found the current CEO of UPS, Scott Davis expressing similar views in a recent interview with the Atlanta Journal & Constitution (Q&A / Scott Davis, Chief executive officer of UPS by Rachel Tobin Ramos, 9/20/08)

“We’re not really managing for the next quarter but many years into the future… It sounds folksy, but we really think our job is to leave the company in better shape for the next generation…We all feel very much involved in the outcome of this company (UPS). We still have about 30 percent of the company owned by insiders, both active employees and retirees.”

I do feel more positive about the potential of our country after thinking about UPS and the model it offers future company founders and the leaders of today.  We need to find successful models to guide us in how to transform our short-term gain focus into personal and organizational visions that balance what is good for today with what is good for the long-term.

In organizational culture lingo – rugged individualism translates into valuing people who are “self-starters.”  They are self-motivated with a “can-do” attitude and they are able to figure things out on their own.  Successful people in “self-starter” cultures usually need to seek out their own opportunities and the organization waits for the crème to rise to the top.  There is not much investment in formal career development except for high potential people who have already proven themselves.  It can lead to intense internal competition when people start looking out for themselves more so than for the good of the organization.

So what does this mean for leaders of companies with a “self-starter” culture?  As you can see above, there are positive and not so positive aspects of this kind of culture and balance is again part of the answer.  A leader wants to harness the self-motivation towards meeting company goals; and, force collaboration where it is a requirement through alignment between personal and organizational metrics.  They also need a new and consistent focus on managing and developing people to produce 100% output from everyone.  Leaders will need to muscle these new foci as they go against the grain of “self-starter” cultures.

As a country, we are not alone in the wilderness anymore – we live and work in a complex, inter-related global marketplace.  And, shifting our national belief in a pure form of rugged individualism as represented in the cultures of many of our American-based companies will not be easy, but important for the long-term success of our economy.

I could not help but put on my “corporate culture observer” hat as I heard him use the phrase keeping up with relationships.  It makes sense that being relationship-driven is one of the traditional underlying sources of success in residential real estate.  It is the case in most companies where success in personal selling is the preferred method used to create income. And, from my knowledge of organizational culture it is normal that the primary source of external success is also many times used to guide how people operate within the sales organization.  They probably do not write things down or record how work gets done. They most likely talk to the folks who have been there the longest to find out how to solve a problem.

Utilizing an electronic marketing system is of course driving my friend and his colleagues crazy at his company.  It requires people to input data regularly which takes time away from maintaining relationships.  This is going against the grain of a relationship-driven culture and it will be hard for people to maintain unless people are consistently supported and the system brings in some quick wins.  The managing broker will need to support people in muscling their way through unfamiliar behaviors.

My friend ended his tirade against the new marketing system by noting that he agreed with the new managing broker’s plan about everyone needing to work smarter and build on each other’s success.  I asked him if he thought the new marketing system would help them to do that.  His response was – “Yes, but someone has to be brave enough to take the time and teach me how to work the system first!”

An example of this kind of culture is clearly illustrated in an article about family-owned construction businesses, based in Georgia who shared the profits from the sale of the companies with their employees.  Employees received $1,000 per year of service with employees receiving checks ranging from $1,000 to $45,000!  (‘We wanted to share our good fortune’ by S.A. Reid, Atlanta Journal & Constitution, 5/5/08)  

The current 2^nd generation family member leader, Doug Walker explained their action in this way.

“You see so many big companies have executives more interested in gaining money for themselves and don’t look after their employees…We believe if you care about employees, they are going to look out for us.  When we sold the business, we wanted to share some of our good fortune with the people who helped us get there.”

As can be expected, a positive aspect of an organizational culture can also bring some unintended consequences.  One of the most difficult consequences in a company where the values of loyalty and caring drive the rules of behavior is that loyalty many times is rewarded over performance.  In this kind of workplace, employees expect their dedication to be rewarded through job security.  If long-term employees do not perform, they are many times not given feedback and simply relegated to jobs of lesser responsibility, but still taken care of.  A culture of entitlement grows and hinders the ability of the company to innovate and execute.  

The key for leaders is to find a way to balance rewards for long-term service to the company and its customers while at the same time putting in systems where performance against goals can be measured and rewarded as well.  Loyalty and performance are not either-or company values; they are requirements for success in a fast-changing marketplace.

Mr. McCain’s primary professional training is as a Navy attack aircraft pilot and according to the article he “preaches the need to improvise under pressure, subscribing to the military maxim that no plan survives first contact with the enemy.”  This guiding belief makes sense if your work environment is driven by life and death, crisis situations.  It would be important to be constantly gathering information and being comfortable with using this info to adapt plans in order to survive.  It also makes sense that in non-life-threatening situations that this “shoot from the hip” spontaneity might lead to an organizational culture where it is difficult for people to easily stick to a plan and execute as a disciplined team.

Upon reading this article, the unintended consequence does seem to be playing out in the workings of McCain’s campaign staff.  There are a number of examples given of a “big campaign decision” being made and the staff moving to execute and then Mr. McCain suddenly moving in a different direction and not staying on message.  At the same time, there are examples given of how openness to “competing opinions,” flexibility and taking risks serves the McCain campaign staff well.

As a founding leader of an organization, understanding the impact of personal professional training on your own beliefs and how you act is important – there are strengths and weaknesses, and the key is being aware enough to test out what brings success over a broad range of situations.  The ways of acting, based on your professional training may feel more comfortable, natural and other ways of acting will be more difficult.  There will be the need to be mindful and muscle your way through the unfamiliar ways of acting with the help of advisors and friends.