No shortcuts to corporate culture
No shortcuts to corporate culture
By Rahayu Ratnaningsih
This is the second of two articles on corporate culture.
JAKARTA (JP): Corporate culture develops gradually. A
committed leader can introduce and reinforce a new vision until
it becomes intrinsic to an organization. There is no "quick fix".
Over time, an interactive management team can allow a
performance-driven culture to take shape for the benefit of the
whole organization.
Fundamental shifts are required from the executive leadership.
It is not enough to be well disciplined and capable managers: top
executives must consistently prove their leadership abilities.
Leaders stand out: they personify the organization's vision and
instill confidence in workers, investors and customers.
The economic and monetary crisis in Indonesia has forced many
companies to except corporate change as a survival measure.
Downsizing within organizations is one form of these changes,
mergers are another. A merger leads to the combination of two
separate corporate cultures; it inevitably forces massive changes
within an organization.
A workplace that is responsive to change is the ideal setting
for organizational growth. Inability to anticipate economic
crises often leads to drastic changes in the leadership,
structure and systems of a company.
To stay on top, a corporate culture must not only embrace
change, it must thrive on it. Many businesses collapse because
change is not an integral part of their culture. When external
forces compel changes, many organizations are inadequately
prepared to modify existing structures.
The crux of corporate change involves nothing less than a
radical deviation from established beliefs, values, commitments
and behavior. The modifications required can be threatening to
both employees and management. It is common knowledge that
creating a performance-driven culture is the most challenging
assignment for a senior manager.
Very few top executives acknowledge the critical link between
corporate culture and the long-term success of a business.
Overwhelmed by the day-to-day work load, a corporate vision is
often low on their list of priorities.
Assessing an organization's corporate culture is an idea yet
to be embraced by many in the business community. It certainly
doesn't sound like an urgent task. Many managers undervalue the
significance of its impact on an organization.
Rather than addressing the fundamental issue of developing a
corporate culture, an easier option is to resort to downsizing,
cost reductions, a more aggressive marketing strategy, business
engineering or any one of the other "hip" management tools.
The International Business Machine (IBM) provides an
interesting case study. Lawrence J. Bolick and Rouja Brzozowski's
The Information - Technology Industry: A Revolution in Progress
analyzed the "mystery" behind its decline.
For a long time IBM was the biggest and the best in the IT
industry. Massive and financially successful, the organization
was known for its arrogance and complacency. Certain critical
qualities were closely associated with IBM's culture. Corporate
characteristics that contributed to its demise were:
* Focus. For years, IBM was internally focused. The universe of
computers was centered at Armonk, New York. IBM saw no need to
develop an external focus because it then controlled the
industry. When necessities dictated it look outside its own
backyard, the organization found it couldn't. As it became
nearsighted, IBM lost the ability to focus on changing business
conditions.
* Decision making. Like many large, complex organizations,
decision making was top-down and heavily influenced by internal
politics. Dispersion of ideas, experimentation and feedback at
the local site was not encouraged or rewarded by the
organization.
Fact-based decision making was too often ignored, along with
proactive thinking and assertive actions. "If it wasn't invented
here, it doesn't exist" aptly applied to the IBM management
style.
* Rigid structure. IBM's rigid organizational structure was
legendary. Highly bureaucratic and centralized, it inhibited
crossfunctional communication, collaboration and easy
interaction. As a result, centralized governance prevailed. IBM's
business perspective was defensive and reactionary.
Interestingly, IBM's PC business was originally created as a
separate strategic business unit at Boca Raton, but as it gained
market share and importance, it was placed under central IBM
control. Innovation within the company structure to accommodate
new ideas and market challenges was frowned upon: "We're the
best. We have done this for twenty years. Why change?"
When we apply Jerry Want's hierarchy of corporate culture, IBM
exhibits three of his seven major corporate categories: political
(balkanized), chaotic (fragmented and unfocused) and frozen
(grid-locked, engaged in denial). The frozen characteristic
contributed significantly to IBM's decline.
It became apparent that the company needed a brand new
direction. IBM's mission had failed -- or more accurately, had
been lost along the way. IBM's management had neglected to
maintain a vision, been unable to foresee changing forces in the
industry and failed to reposition the organization to respond to
changing forces. All these factors contributed to a culture of
inertia, a factor worse than arrogance in an intensely
competitive climate. A change of leadership was fundamental
before it could establish a reinvigorated corporate culture.
The writer is a human resources and personal development
consultant based in Jakarta.