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Going forward, only the Bold will survive

September 14, 2009

9/10/09 – A Wells Fargo SVP, Cheronda Guyton, in charge of foreclosed commercial properties moves into a foreclosed ocean front Malibu mansion with her family and parties her head off.  The Bank says this is absolutely permitted and not a conflict of interest but will look into it. That’s brazen.

9/11/09 – The Coast Guard held a drill on the Potomac, scrambling local Police, the FBI and closing Regan Airport for 30 minutes.  A Vice Admiral came out of CG HQ, all white uniform with golden stars all over his epilates, and says this was scheduled and someone must have been listening in and acted unnecessarily.  When asked, he said no apology was needed since it was pre-scheduled.  That’s brazen.

The common thread here is a brazen culture, a ‘whatever is good for me is good for me and they don’t understand us’ attitude which we have built into many corporate cultures.  Have the Government go near bankrupt bailing out your financial institution and then pay yourself a huge bonus. Even though a home surrendered back to the bank is fair game to be held or resold, how about the ocularity?

What kind of a corporate culture produces a closed loop with its inability to see itself as outsiders do?  Over 25 years, we have found a series of ‘tells’ which almost always indicates a culture in need of help:

  1. People think and talk about borderline behaviors as a means of proving they are bold when they really mean brazen
  2. ‘Go along to get along’; no deep questioning; “that’s the way we do it” leading to many employees unable to articulate a decent understanding of why they do what they do or push back when asked to do something they feel is wrong.
  3. Trying to fix reoccurring problems is wrapped in internal politics but working hard, unnecessarily hard due to bad processes and systems is rewarded
  4. The same people who have lived with a problem for 20 years are tasked with fixing it
  5. A general feeling that outsiders create internal problems and the outside world does not understand our company (or organization).  “They don’t get us”.  Regulators are put  into this category.
  6. Senior Management says one thing and does quite, and publically, another.  This can be especially problematic in unionized environments.

Since many successful companies could fit this model, why is ‘brazen’ a bad thing?  Because times have changed and the public is completely untrusting of our institutions and therefore, the more publicly callus our culture appears to be, the more we have to advertize to protect our brand, coupon/discount to get business, deal with angry Congressmen or Regulators, or other measures which all increases either COGS or S&GA expenses or cuts both Top Line Revenues or EBIDTA. ‘Tells’ 1-6 are not signs of a strong, aggressive, bold culture, they’re signs of weakness.

What’s a bold culture?  The ‘tells’ are very basic:

  1. They redefine their business models periodically and make others play to their tune.  When was the last time your competitors said “I wish we had thought of that, we’ll follow suit”? Think Hyundai Advantage.  Brilliant for all the publicity and for being 1st. The effect?  Look at their marketshare trend.
  2. They are very self aware and have an innate, baked-in capacity to see themselves as others do, hence, their PR is generally very positive and accolade filled rather than explanatory. Think the University of Michigan Health System’s policy of apologizing for mistakes and how it cut the number and cost of lawsuits by over 50%.
  3. Bold companies take control of their Regulatory Relations, managing this key relationship as if it was their single best customer. The police have an expression about highway speeders, “you can outrun me but you can’t outrun my radio”. Substitute ‘Regulators’ for ‘radio’. Many utilities have exceedingly solid relations with their regulators and are the better for it while others are always testifying before some angry Committee. This dance becomes even more complex in utilities that have both deregulated and regulated businesses under the same roof – it’s like being married to 2 different people at the same time.
  4. Bold companies see all employees as wanting to make their lives easier.  Yes, even unionized employees want to eliminate waste from their daily jobs.  Let’s get real here; many of the seemingly arbitrary workrules are really disguised means to keep as many workers on the job as possible.  The constant Middle East like battle between Labor and Management is not written in stone. Management’s teaming and transparency goes a long way while non-adaptive Unions can join one of NY’s former strike ready groups, the Lithographers, in sepia toned history. Bold companies make their product or service more efficient while retraining existing workers in more productive skills.  Everyone wins.
  5. Bold companies manage their costs over time and rarely go through the cost expansion/cost cutting cycles with the attendant morale and productivity implications.   They run lean but effective.

As business leaders, the choice is ours – if our company is brazen, a ton of resources has to be applied to ensure employees don’t cross the line or to defend itself in public.  Or we can chose to be bold, where much of the resources protecting us from our own brazen culture can be directed towards delivering our service/product.  Given the weak, jobless recovery for the next 5 years, it is far better to plow all energy into revenue based activities rather than waste it on public CYA.

Which culture do you have? If you don’t know, you do know.

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website iswww.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations and key initiatives. He can be reached at richard.eichen@growroe.com

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