What Happens When Leaders Forget The Culture That Made Their Company Great?

by Bill Higgs, author of the upcoming book “Culture Code Champions: 7 Steps to Scale & Succeed in Your Business”

Many business leaders view their corporate culture as so important that they make it a point to hire people who are a good fit for that culture – and jettison any employees who aren’t.

But what happens when it’s the leaders themselves – for profits, for expediency, for getting the next deal done – who toss aside the culture and plow ahead with decisions that go counter to what made the company a success?

Trouble, that’s what happens. Your company’s culture should inform everything you do. When you start straying from the practices that got you where you are, you run the risk of making decisions that will cost you in the long run.

One example that surfaced recently involved Boeing, which posted its first full-year loss in more than two decades. The company was already reeling from two Boeing 737 Max crashes in 2018 and 2019 that killed 346 passengers in Indonesia and Ethiopia, and forced the company to ground its entire fleet of Max jetliners.

According to news reports, the origins of the company’s woes can be traced all the way back to 1997 when Boeing acquired McDonnell Douglas, a merger that immediately led to a clash of cultures. At Boeing, engineers were king. At McDonnell Douglas, the bottom line ruled.

In the end, the McDonnell Douglas culture prevailed.

Mergers and acquisitions are always fraught with danger both financially and culturally. Financial concerns get the focus while management figures, incorrectly, that culture will just work itself out

But in any organization – with or without a merger – it’s paramount that the leaders take charge of maintaining the culture. Some steps crucial to establishing a company culture and keeping it on course include:

Encourage communication.

All problems ultimately are communications problems. In any organization, there can be communications breakdowns. The most important way to improve execution and efficiency is to foster and maintain a spirit of inclusion, where everyone who has any contact at all with a particular project feels they are involved and is kept in the loop.

Knock down silos.

Too often silos emerge in large organizations where departments become insulated from each other. They fail to share ideas and resources, and an attitude of competition replaces a spirit of collaboration.

Make sure employees know they are respected and valued.

This is the real key to building a successful organization and making sure your best people stay with you. Leaders should communicate regularly with employees to make sure they understand how valued they are. Employees should also know it’s all right to speak up if they see something problematic.

When I was at Mustang Engineering and we had grown from a small to a huge company, I still had drafters who were comfortable jumping five levels in the organization to let me know they would have to put out substandard work if the schedule or cost were not changed.

I always told them I would handle the issues internally with engineering and externally with clients or suppliers, but they should stay the course on quality.

 

Bill Higgs, an authority on corporate culture, is author of the upcoming book Culture Code Champions: 7 Steps to Scale & Succeed in Your Business. He recently launched the Culture Code Champions podcast. Higgs is also retired CEO of Mustang Engineering Inc., which he and two partners started in 1987 to design and build offshore oil platforms. Over the next 20 years, they grew the company from their initial $15,000 investment and three people to a billion-dollar company with 6,500 people worldwide; since then, it has grown to a $2 billion company with more than 12,000 people.

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