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organizational culture

Abbott Labs has violated its Promise–to our babies!

by Sheila Margolis on September 23, 2010

According to the Abbott Labs “Promise for Life”:

We strive to earn the trust of those we serve by committing to the highest standards of quality, excellence in personal relationships, and behavior characterized by honesty, fairness and integrity.

Well, it looks like their commitment to the highest standards is lacking. They recently announced a recall of millions of containers of Similac-​​brand powdered infant formula. Yes, a product for the youngest and most vulnerable. It may be contaminated with insect parts. I won’t go into details, but it’s not something you want in your baby’s GI tract.

According to their press release on their website dated Sept. 22, 2010, the company calls this recall “proactive” and “voluntary” and said that the chances of one having a problem was “a remote possibility.” Seems like they’re saying they are responsible for a quality problem that may not exist. Would they want their babies to be drinking beetles or their larvae every 3–4 hours? Babies are often colicky. Who would guess that the formula was contaminated?

If they truly believe in their Promise for the highest standards of quality, then they must not just promise it, they must live by that standard each and every day. And all employees must consider high quality as a standard that is never violated. If a few prime values are truly part of an organization’s core culture, then those become the guideposts that no one violates. Maybe it’s time for Abbott Labs to rethink their culture and their Promise and be sure that it is more than nice-​​sounding words.

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Is Goldman Sachs living the culture?

by Sheila Margolis on September 21, 2010

On CNBC, there was a brief discussion of the Goldman Sachs culture and the possible changes it may be making to the culture. For example, the Goldman culture is known for putting client first, team second, and employee third. Thus, a partner’s business card is aligned with that core belief–with the Goldman Sachs name being most prominent. This is an example of aligning Projections (your image) with the core culture (the values at the heart of your organization).

Goldman historically has not been known for having a revolving door. If you left the firm, you did not return (although Edward Forst was an exception). This allowed those below to have opportunities to move up–a motivational tool to retain workers. If employees were allowed to leave and later return, then opportunities for promotion would be reduced. In a high pressure job with long work hours, this was a tool to keep valued employees. But now Noto a former Goldman partner and media stock analyst who left to serve as the NFL CFO is now returning in October to co-​​head the global media group. Although his departure from Goldman was not for a competitor, his re-​​hiring is not typical for this company. Will we start seeing more former Goldman employees coming back to the Goldman home? Will the change to a “bank” status continue to impact the organizational practices and with it the culture?

Companies must be aware of the impact small changes can have on their core culture. Although some changes may seem insignificant, if they are in conflict with the core culture values, these changes will imply a different set of principles that are more important. And if practices continue to change without a discussion of the core culture and its changes, then employees will be confused and with that confusion will potentially be less motivated. Practices–even a business card or an employment practice–must be aligned with the principles and values of the culture. And if the culture needs to change, that must be explicitly addressed and not left for employees to guess.

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When the H-​​P leader does not live the culture, he must go

by Sheila Margolis on August 7, 2010

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.

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Selling the Sage brand through a united culture

by Sheila Margolis on July 20, 2010

Sage is a global software business, but with so many acquisitions, it has lacked a united culture. As Mary Welch reports in the July 18th issue of the Atlanta Journal Constitution, the company “is redefining itself as an entity greater than its parts.”

To retain the success of acquisitions, organizations tend to leave them alone for awhile to avoid disrupting their productive operations. But now for Sage, building a global brand will require some disruption in order to build a united culture. There are real benefits to collaborating across acquisitions and business units. A company often starts with a re-​​branding effort to  jump start the process, but that’s just an image adjustment. Real synergies and prosperity will only be derived from an internal process of building a united culture.

Including the people of all acquisitions–the entire organization–in defining the Sage culture that all will share may be the formula for uniting employees and making the brand a seamless and customer-​​focused solution for those they seek to serve. The process of building a united culture is much more than a re-​​branding effort. It is an internal process to define, shape and manage organizational culture. By building this shared foundation, a united effort can be realized.

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Is your performance management system working?

by Sheila Margolis on May 26, 2010

Is your performance management system damaging employee performance? Do some managers put off their annual appraisal meetings because they dread the process as much as the employee? If that’s the case, let’s review a few of the basics of performance management to guide you in the process.

  • Employees must participate in the creation of their performance expectations. If employees do not help create the standards by which they are judged, they will not feel ownership of those standards. And ownership produces the commitment and drive you need for organizational success. These performance expectations become the “how” and the “what” to guide the employee.
  • Performance expectations should include desired behaviors linked to the culture of the organization. These behaviors are the actions the individual must do that align with the culture of the organization. Each employee must live the core culture principles each day in a variety of ways. These standards are not limited to a particular job; instead, they are across-​​the-​​board standards that everyone must adhere to and thus ensure that the culture is expressed continuously. For example, if your organization is all about “attention to detail,” then each employee is guided by that standard.
  • Performance expectations should include desired behaviors linked to the job. With each job, there may be unique behaviors that are required. These behaviors must be incorporated in the standards for the employee.
  • Performance expectations should include expected outcomes. Employees must have defined outcomes to achieve that link to the organization’s goals. These individual goals give the employee a big picture view of the organization’s strategy. By understanding the individual outcomes that will contribute to the organization’s goals, each employee can be a key player in moving the organization toward success.
  • Ongoing feedback is the key to improved performance. Highly engaged employees get daily, weekly, or monthly feedback–not just an annual performance review. But there’s one problem with feedback: it’s not so easy to do it right. That’s why so many managers avoid it. Feedback must be timely–provided as close as possible to the occurrence of the behavior. That’s a feature that annual reviews can’t offer. Feedback must also be specific–it must describe the behavior in exact terms. Feedback must be genuine–using personal pronouns such as “I.” And feedback must be given in a supportive and positive environment. Feedback can be an informal, ongoing exchange.
  • The performance review session offers an opportunity to plan for the employee’s development. An employee’s performance–in relation to the behavioral standards and expected outcomes–offers a good opportunity to discuss development needs. Use the performance review as a time to identify areas for development and a plan for obtaining that development.
  • Does the employee get a score? This is a key question to answer because “the score” is what contributes to the threatening nature of the process. The score is what can make employees get defensive. The score is what causes discussion to be distracted from the real intent of the process–to improve performance. If your purpose is to have a rating to guide pay, rewards, and reduction in force, then you will need a number. But be clear: the process then becomes less of a development tool. Some organizations have pay and promotion discussions as a separate activity. That allows the review to be solely a development tool and more open discussion usually occurs when there is less concern that pay will be impacted.
  • Managers must be trained in the performance management process. Giving feedback and  consistently using the scales for measuring one’s performance are essential skills. Don’t assume all managers have a consistent understanding of the standards and the scales used or the necessary skills for giving effective feedback. Discussion and training are often required for the process to be effective and to do what it’s designed to do–improve performance.

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So how does Xerox redefine its culture?

by Sheila Margolis on February 21, 2010

In the New York Times article, We’re Family, So We Can Disagree, Ursula Burns, chief executive of Xerox, is described as the new chief trying to “redefine” the Xerox culture. Often the process is more simply described as defining the culture, because in the process of defining it, a new culture–or a variation on the past culture–can emerge. Of course, completely throwing out the old is not typically advisable unless the company is struggling for survival.

So how does this defining process work? First, it must be a collective process–everyone must participate–to some degree–to produce a feeling of ownership. Through interviews, focus groups, and/​or open-​​ended surveys with the leadership team and other key members, questions must be answered that will unveil why the organization exists, its distinctive and enduring principles, and the strategic priorities that will move the organization forward toward success. Then, with an understanding of the options generated from the initial data gathering, all organizational members participate in giving their views through a survey. Next, the leadership team reviews the survey results and conducts a reflective dialogue of options. The outcome is the creation of a core culture that everyone helped produce.

This process may take a few months, but at its conclusion, Xerox would have a clear picture of who the organization is–its identity–and what it will take to compete and thrive. And this “new” or adjusted culture will be clearly defined so that it can be shared.

So now is the time for Xerox to take a moment to reflect as a community–as a family–in capturing these valued core principles. Because the defined organization core culture will become the guiding light to direct all in the organization.

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