47 - Culture

How To Sustain Or Erode Company Culture

We are unfolding the 5 dimensions of the “Identity as Culture”. Sustenance in the Identity as Culture framework is captured by the questions: What sustains us as a company and keeps our organization healthy? What gives us drive and motivation? What keeps us going?

As she hung up the phone, Susan pushed her chair back from her desk and turned to stare out the window. Watching the cars that rolled up and down the street seven floors below her was a welcome distraction. “That just did not sound like Ken. It didn’t sound like Collins, either,” she muttered.

In her twelve years as a sales executive for Deer Electronics, she could not remember a call like the one she had just finished. Maybe it seemed worse because it was with Collins Communications – a lifetime customer of Deer’s. The relationship between representatives of the two companies, and by extension between the companies themselves, was always cordial—tough on business issues but always friendly.

Susan had worked with Ken Wong, the chief procurement officer at Collins, for eight of those years, and their kids were the same age. What had perplexed her during this call was the edge in Ken’s voice – as if he was angry, as if the mutuality of their relationship had somehow been replaced by blatant self-interest. She had never heard Ken sound like that before. During price negotiations, they had always chosen, out of respect for one another and the longstanding partnership between their companies, to leave something on the table – “a penny for the waiter,” Ken used to say. But now he was pushing well beyond their established boundaries, demanding more ground and more give from Susan than ever before.

The call with Ken was just part of a bad feeling Susan had about Collins all week. On Monday, she noticed on LinkedIn the unexpected “retirements” of both Jay Wilson and Wendy Millar—the last two people she’d expect to see opting for the gold watch. She knew things were pressured, and tough decisions were being made—the closure of the Shannon distribution center and the small factory in Chennai were proof enough of that—but she didn’t think the company was in enough trouble to start downsizing the key employees who made the place work.

So why had they left?

As she thought more, Susan started to notice a pattern. In a considerable departure from routine, the Collins board had just declared a dividend that had produced a favorable, though temporary, lift in the stock price. Around the same time, Susan had been advised that the payment term Collins would be honoring on all its owed invoices was now 60 days, a full 30-day extension beyond the length Collins had kept to for as long as Susan had been on the account.

As she watched the traffic slow to a crawl below her, a long-forgotten conversation flashed to mind. Some months ago, at the bustling local airport, she had bumped into Phil Woods and owing to a short delay on both of their flights, had sat in the lounge and shared stories with him.

Phil had been CFO at Collins for nearly fifteen years and was one of the few that knew the business and company from back to front. Phil Woods had known “Mr. Collins” personally. The original “Collins” had an eye for growth and a kind heart, and the business that grew up around him was known in the industry as a unique combination of his qualities.

Phil had always been a shrewd character, and was renowned as a tough but fair negotiator. He always asked after Susan’s family and seemed to delight as much in Deer’s success as his own company’s. As Susan recalled their conversation that day in the lounge, she remembered a certain wistfulness to Phil’s stories—and a subtle change of tone—but characteristically he had been quite discreet about his own intentions. She wondered at the time what would happen when the last clear link to the founding culture left the company. She realized that she was in the process of finding out.

Susan fixed her gaze back on her desk, where a small pile of performance appraisals required her attention. As she began to work her way through the assessment criteria, it struck her, as it always did at review time, that the numerical scores she was entering seemed so far removed from the people whose bonus would be impacted by her decisions.

What sustains the culture of an organization and keeps it true to itself? How did the training and appraisals and hiring criteria influence the sort of company Deer was becoming?

It was clear to Susan that her primary customer, Collins Communications, was becoming a different company. But why? Many of the same people were still there, but she had no doubt that things were changing.

She turned the page to her next performance appraisal: Anna Jacobs. This was a tough one. Anna was the consummate sales person who had closed more deals in her first six months – and difficult ones, at that – than anyone Susan could remember. Anna’s results alone should put her in line for promotion, but Susan knew that Anna did not really fit. She got the numbers, sure, but she did so in a way that wasn’t true to Deer. So what mattered? The numbers? Profit? How could her gut feeling or some vague notion of culture stand up to hard-nosed performance?

Perhaps she was facing exactly the kind of small, yet consequential choices that Collins had made in recent years. It made her wonder, “could one lousy hiring decision change a culture?”

“It might,” Susan muttered. While she didn’t yet know what decision she’d make, Susan was pretty sure that the little decisions about what does and does not matter are what sustain or erode a company culture.

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