WHY CULTURE IS CRITICAL TO LEADERSHIP

WHY CULTURE IS CRITICAL TO LEADERSHIP

James R. Fisher, Jr., Ph.D.
© November 2007

“Culture: 5 (a): the integrated pattern of human knowledge, belief, and behavior that depends upon man’s capacity for learning and transmitting knowledge to succeeding generations; (b) the customary beliefs, social forms, and material traits of a racial, religious, or social group; (c) the set of shared attitudes, values, goals, and practices that characterizes a company or corporation.”

Merriam Webster’s Collegiate Dictionary (1993)

“Don’t change corporate culture. What we need is to change organization behavior.”

Peter F. Drucker, The Wall Street Journal, March 28, 1991

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We suffer from the celebrity syndrome. This is not only true of the entertainment industry, but also across every walk of life.

Think about it. We accept the source as reliable because it has been reliable in another context. Such is the case with the esteemed management guru Peter Drucker. He failed to understand that culture dictates behavior; to change behavior without the appropriate culture is pure folly.

Yet, Drucker made such a statement in 1991 in the Wall Street Journal, and I know in my own consultancy work that many senior managers took comfort from it, seeing it as a license to do nothing about company culture.

Then there are cases where CEOs find suitable cultures for their enterprises. This is one.

THE HEDGEHOG PHILOSOPHY OF SOUTHWEST AIRLINES

Isaiah Berlin wrote a book on Tolstoy’s view of history. He based it on an ancient Greek story by the poet Archilochus called, “The Hedgehog and the Fox” (1978).

The book underlines a fundamental distinction between people (foxes) who have a fascination with, and an inclination towards an infinite variety of things, while another group of people (hedgehogs) relates everything they do to a central theme and all-embracing concept. Foxes are so busy trying to do everything well that they do nothing well. Not so hedgehogs.

Two relatively small airlines exemplify these two approaches. Both airlines had essentially the same business plan; the same market area, the same assets, the same complement of competent people, and nearly the same mission statements, yet they experienced decidedly different outcomes.

Southwest Air Lines became a great commercial success as a hedgehog, while Pacific North West Air Lines failed as a fox.

Pacific North West attempted to do everything well in the interest of satisfying its stockholders, customers and employees going like gangbusters in that pursuit.

Southwest Air Lines adopted the “hedgehog concept,” focusing on doing one thing very well, allowing the process to suitably gestate before expecting it take hold.

What was that one thing?

It was in identifying, developing and implementing the best workplace culture for its people. It assumed if that were done the rest would follow naturally. This was total front-end lateral thinking with a primary focus.

How was the “hedgehog concept” visualized?

The CEO visualized the workplace culture as being three interlocking spheres of influence and behavior: a passion for serving; a mission to be the best in the world, and an emphasis on equal service to customers and employees alike.

Culture was understood to be primarily a spiritual entity. Intangibles are the drivers of people much as many would prefer such drivers to be simply money. Tangibles are easily given without any personal involvement, not so with intangibles.

How can the "hedgehog concept" be measured?

The pervasive company spirit is visible and even palpable. A measure of intangibles is seeing how employees support each other, and respond to change and disruption.

The way to attain and sustain that spirit, the Southwest CEO decided, was to make it clear that Southwest employees came first, then the customers, and last but not the least the stockholders. This created a bond of trust.

He also made it clear that employees would not be subject to surprises, but instead would be informed of critical developments so that they could participate in the problem solving. Since change is constant, workers need to be flexible to meet such changes. Being well informed relative to company operations translates into flexibility because employees are never surprised and know always where they stand.

Not long ago, all company employees met in conference to discuss how to deal with ever increasing fuel costs. Currently, fuel costs represent an increase of $600 million over last year. To put this in perspective, employees were told, profits in all of 2005 were $485 million.

There was no panic, no finger pointing, but a genuine desire to look for new ways to increase productivity, improve gate turnaround, and to do more with less.

Employees know they are valued by the way they are treated. Consequently, they are constantly looking for ways to deal with increased competition, changing market demands, and the challenges of a volatile world. Periodic disruptions don’t sound the alarm for downsizing. On the contrary, they rally the troops to ratchet up their efforts.

Core values, passion and high spirits carry an enterprise through disruptive times because the culture has a singular focus and employees understand their mission. Put another way, core values are a constant to deal with that other constant, change.

ARCHITECTS OF CULTURE

The “hedgehog concept” took hold at Southwest Air Lines because the CEO and his senior management team decided business would be managed around guiding principles outlining this value system and attitudinal policy.

The workplace culture created was user friendly and accessible to all disciplines without exception and displayed in behavioral language.

The culture desired is manifested when the preferred values are on display without prompting. It is an "invisible hand" that puts everyone on the same page so that they can get off the dime.

CAN THIS WORK ANYWHERE?

It is a matter of will and involvement.

The nature of the complex organization is such that chronic problems are bound to occur. These problems disrupt work, create polarity, and often derail the collective effort away from rather than toward the mission.

So, the first thing that must be done is for senior management to understand that there is a problem, then what the problem is, where the problem is, why the problem exists, how long it has existed, what has been done about it in the past, what was the outcome of such intervention, and what are some more effective ways of dealing with it now?

You cannot concentrate on behavior, as Peter Drucker assumed, and disregard culture. Culture is the engine of work. It is the attitudinal machine of enterprise. Nor is culture something that you can copy but something that each enterprise must create from scratch.

To deal with a chronic problem of organization life takes the assistance of someone who is professionally trained to facilitate the problem solving process.

That would be the organizational development (OD) psychologist. OD deals directly with the CEO and senior management in an integrative effort.

Are there any words of caution?

There is one stipulation. Culture is not something the CEO and senior management can be committed to without also being totally involved.

After all, they are architects of the culture. They draft the blueprint of the core value system. If they are not involved, if they abdicate this role and delegate it to staff or consultants, then the prospects of success are limited, indeed.

Southwest Air Lines has shown that other companies can use the “hedgehog concept” to their advantage. Any troubled enterprise can resolve its difficulty by going back to the drawing board, examining its value system and culture, and redesigning it to a more compelling focus. Culture is not something you "search for" or attempt to copy the model successful somewhere else. Culture is the challenge of each enterprise and the key to a successful future.

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Dr. Fisher is author of several books in the OD discipline. His latest is “A Look Back to See Ahead” (2007).