When it comes to the complex topic of culture, all you can do is hope. In my experience with some of the largest companies in their respective industries, hope is the flawed strategy most commonly deployed.
Sometimes the strategy of “hope for the best” is engaged on a conscious level and most of the time it is a default setting that occurs in the absence of conversation about the importance of culture. The complexity of the concept of culture is often an intimidating topic at the executive level. Until you have purposefully and academically explored the topic of culture, it remains an ambiguous concept that eludes the agenda when engaging in conversation about business strategy.
Having gained insights due to my own naivety coupled with my work with struggling companies, I would like to offer a type of hope that could become a tangible part of a strategic discussion. HOPE is an acronym that embodies the four key elements to reducing the risk of failure that could arise from ignoring the powerful influence of culture.
The H in HOPE stands for humility. No discussion about positive and effective cultures should occur without the recognition of humility as a core component. Humility enables leaders to learn, observe, and adapt. Humility is the element that prevents leadership from seeing themselves as more powerful than the culture they operate within.
I first learned this lesson because of a view from the inside of the Time Warner and AOL merger. AOL and Time Warner (TWC) merged in what was, at that time, the biggest merger in American history. A corporate culture reflects the group identity, shared beliefs and expected behavioral norms. The merger of two very different cultural norms contributed to an inevitable clash fueled by what I perceived to be a lack of humility. I remember being at a meeting where leaders were discussing how we would position AOL internet access in the new marketing strategy. TWC now had to allow other internet service providers access to the same high-speed infrastructure that AOL was gaining through the merger. When one of the providers revealed their price point, I noticed that it was noticeably higher than the other competitors using the same infrastructure. To understand the rationale, I inquired, “How would you like the representative to answer the questions they receive about the difference in pricing?” The answer from the leader was, “we believe that we are a premium product and that people will pay for that.” That answer was my first indication that there may be a delta in the perception of leadership versus that of the end users.
There was a widely popular view at that time that differed from the perception of this leader. Within a short time after that, the immediate failure of that strategy contributed to a decision to make that provider’s product free to anyone and even then, it was too late. A lack of humility slows or stops learning and learning is pivotal to your ability to adapt and influence your culture. You must seek to influence and shape your culture because your culture will surely influence your ability to succeed.
You must seek to influence and shape your culture because your culture will surely influence your ability to succeed.
O is about the value of understanding the culture of other companies, partners, or customers. The failed AOL and Time Warner merger was valued at approximately $350 billion dollars. I am convinced from my experience that a deeper understanding of each other’s culture would have been invaluable in informing the merger strategy. The cultural artifacts that drove expected behaviors in each of these organizations proved to be in opposition to each other. This was my first lesson in understanding that there is no such thing as a merger of cultural equals. Whether it is through a merger, partnership or joint venture, the exploration of the “other culture” is vital in understanding the elements that will aid success and those that will prove to be a risk.
3. Pay attention
To reduce the risk of your culture contributing to your failure, you must pay attention. The P in HOPE is a reminder that we need to be deliberate about paying attention to the concept of culture. Culture will influence our business strategy whether we pay attention to it or not. I was honored to have an opportunity to work with the former Cellular One organization. The cellular industry was still in its early years and teams were literally just moving into markets to establish offices and services. This was a fascinating opportunity to observe the evolution of a culture from the very start. An initial team of 3-4 would enter a new market, find office space, and hire engineering talent to begin construction of towers and other equipment. Marketing plans were being developed; fax machines and phones were housed atop cardboard boxes because furniture had not yet arrived. Owners were often investors who lived elsewhere. A culture was being created even though there was no discussion about culture. With the rapid growth of this industry, satellite offices were subsequently being formed resulting in sub-cultures within a larger corporate culture.
The key learning from this illustration for me was about how powerful the leader is in establishing a culture whether intentionally or not. Culture is inevitable and unstoppable so we must pay attention.
Culture is inevitable and unstoppable so we must pay attention.
Finally, the E is for ethics. The biggest corporate failures that I have observed were fueled by a breakdown in ethics. I gained insights by working with AOL/TWC during the failed merger and at a time when the SEC would file allegations of fraud against some of the leadership. I also had a view working with Adelphia and New Medico as well at a time when alleged ethical violations would topple these large organizations. The lesson to be learned is that it is not enough to place your ethical stance on a poster. I have come to understand that the difference between companies I have seen fail and the many more that I have seen succeed is that they are intentional. There must be deliberate conversations about how to infuse ethical standards and expectations into behavioral norms as well as into the very fabric of your culture. Ethics must become an unwavering factor in the way you identify, hire, and promote your leaders. All other elements of your culture can remain strong; however, it only takes one violation of ethics to doom your long-term success.
Aid strategy, influence culture
As it has been said, “Hope is not a strategy.” I submit these four secrets to using HOPE as a tangible way to aid your strategy and influence your culture. Culture should be on the risk register of every organization given its inherent power to derail your strategic objectives. Use HOPE to ensure that you address, at a minimum, these four key cultural risk mitigations. Ensure an environment of humility promoting and protecting our willingness to learn and adapt. Examine the culture of other organizations in which your success is dependent. Pay attention to the role culture plays in your success and be deliberate about defining it. Determine how to embed ethics into every fabric of the organization. In so doing, you will make HOPE part of your strategy.
How can you add to this conversation? I invite your comments below.