Organizational culture is an important thing. It’s the standards guiding all behavior in the organization–leaders and employees alike. So when you have a culture of uncompromising integrity, respect, and trust and your top leader–the CEO–demonstrates behaviors that are in conflict with those core values, what do you do? The answer is simple if your culture matters. The CEO must leave. And that’s what happened at H-P.
If you read the H-P Way, a key tenet of the culture is: “We conduct our business with uncompromising integrity.” It is explained this way:
We expect HP people to be open and honest in their dealings to earn the trust and loyalty of others. People at every level are expected to adhere to the highest standards of business ethics and must understand that anything less is unacceptable. As a practical matter, ethical conduct cannot be assured by written HP policies and codes; it must be an integral part of the organization, a deeply ingrained tradition that is passed from one generation of employees to another.
In the Five Ps model, the P of “Projections” refers to the images that an organization projects to the public and to the employees, as well. Those images are often influenced by marketing, PR and advertising, but they are also influenced by things like the company name, its logo and symbols, and even the image of the headquarters, offices and stores, and the company’s leader. These images must be aligned with the culture of the organization. Lack of alignment produces serious problems for the company–the public and the employees no longer believe those espoused values matter. How can the leader of a set of values not practice the values that he says are most important?
Leadership matters when it comes to organizational strategy and leadership matters when it comes to organizational culture. When the leader lives the values and talks about them each day, then everyone inside and outside the organization believes they are real. And that’s what it takes for a strong culture–a vital asset for any organization.
And when that leader no longer represents those core values, for the sake of the health of the organization, the leader must leave. Of course, selecting the next leader becomes a challenge, especially when the organization has had a history of selection issues as the WSJ labels as the H-P Curse.
An insider is usually the better choice if you seek to sustain the distinctive and enduring Philosophy of the organization–a vital part of the Core Culture. Insiders usually get it because they’ve been living it–assuming the culture is aligned and practiced. Outsiders need to be selected based on whether they have demonstrated leadership practices that are consistent with the company’s culture. The wrong selection can damage a culture.
Culture matters and leadership matters. They go hand-in-hand.