Corporate culture

2006

The results can be magnificent if you get the behaviour right first, though.

One example is the American steel company Nucor, which has built its culture round the motivation of the individual. Over the last five years, Nucor's shareholders have earned returns of 387 per cent.

According to Business Week, the driving cultural idea is to lead the employees to adopt 'the mind-set of owner-operators'.

However, the essence of culture is that it differs from one organisation to another. It is doubtful if the owner operator mind-set would apply to Cambridge Design Partnership, which employs only 25 people, mostly top-class engineers, and which is insistent on the importance of its culture in attracting and keeping customers for contract research.

I encountered CDP on a field trip for the East of England Development Association. I was given the task to examine the various approaches to New Product Development at three very different companies.

As it turned out, a key factor held in common was a well-developed understanding of the firm's culture and its role in corporate life.

Like CDP, which can lay claim to never having a failed project, Voca has completed 50 billion financial transactions without error (yes, 50 billion).

The Lotus Group, meanwhile, shares the contract research drive of CDP and has a deeply vested interest in raising the state-of-the-art in the auto components that it supplies to OEM customers and uses in its own sports cars.

At this trio of companies - and at Nucor - an evident and powerful sense of purpose reflects the culture.

The true and the false definitions of culture share an obvious link. If you change the culture from whatever exists, for instance, from lack of purpose to purposive, then you change the 'way we do things round here'.

Top managers believe that the responsibility to run the culture lies with them. If some aspect of the business disagrees with them, they will employ some new method that will produce a desired elevation.

Put another way, they enjoy a top-down culture. However, any consultant or guru worth their salt will tell you that people cooperate best when executing policies devised with their collaboration.

An apparent and major exception exists, however. When a business experiences genuine difficulties, cultural change during any good turnaround is quick and marked. The faltering company can be made more effective almost overnight.

But it is not a strong foundation for a culture. Success always lessens the urgency that everybody brings to a turnaround. The organisation and culture can quickly revert to the status quo - which was the cause of all the trouble in the first place.

At least one thing in common is shared by Nucor, Voca, Lotus and CDP. From top to bottom, all their employees have a deep knowledge of the business, its objectives and its practices - to most of which they give their wholehearted support. The leadership, therefore, can pursue ambitious plans that would not be possible in different cultures.

Remember that the culture follows from the principles and policies that are put in place - not vice versa.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".

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I am interested in how to diagnose and analyse corporate culture and how to fix dysfunctions in corporate culture.

Joseph Ojom-Nek Kampala, Uganda, East Africa