Leverage The CEO’s Guide to Corporate Culture
John R. Childress
After the explosion and subsequent oil spill from the Deepwater Horizon oil rig in the Gulf of Mexico in 2010. BP’s CEO Tony Haywood, had employee deaths and a major environmental disaster on his hands. His reaction reflected the company’s focus on performance and cost control. This ultimately cost him his job, and the company remains well below its previous market capitalisation level.
In contrast, Johnson & Johnson’s handling of the Tylenol pain reliever incident in 1982, when seven people died from cyanide poisoning, was swift and open, with a focus on protecting the safety of the public, whatever the cost. The credo laid out by the original founders and followed by all staff, led to a complete recovery of its market share within a year.
Few concepts in business contain so many powerful truths, and at the same time so much crap, as corporate culture.” John R. Childress
While Childress acknowledges that culture is not the only key to a successful company – luck and circumstance can have a lot to do with success – these two examples show just how important a pervading company culture can be.
The book has been published by Childress’ own consulting company, Principa Associates, and contains a wealth of ideas and suggestions drawing on the author’s 35 years’ worth of experience in working with companies to address cultural issues. Childress summarises culture as: the usual way we go about solving business problems, interacting with customers and treating each other. He has packed in a lot of thoughts on the definition, history, study, measurement and examples of culture at work, including:
- What are you measuring? If you are looking to measure culture, decide first if you want to do a culture survey or a climate survey – a climate survey measures the current state of staff morale, feelings, etc. A culture assessment will look much more deeply into the characteristics and habitual behaviours
- Use coachable moments Every day is filled with coachable moments to help build a strong and aligned culture – never pass up on the opportunity to highlight to colleagues what is and what is not acceptable in your culture (like blaming others)
- Live your values Childress once attended a congratulatory sales staff conference. The CEO stood up to reward people based on the company values, and the evening’s dinner was supposed to end with a comedian’s show. However, minutes into the performance, it became clear the jokes were more suitable for a stag night. The brave CEO took the microphone away and ended the act – apologising and explaining to the audience that the jokes were not reflective of the company’s values of respect for all, before walking off stage to a standing ovation. This brief act had a far greater influence than any memo or poster on company values
- Act rather than just think It is easier to act your way to a new way of thinking, than to think your way to a new way of thinking. Ford’s Halewood plant had the worst quality of production in all of Ford’s factories, with staff sleeping on shift, and militant unions. Childress worked with the Head of Jaguar cars to reinvent the plant, building trust with the unions and management (and letting go of people who didn’t think it would be possible) to make Halewood a worldwide training centre for lean, quality management. The change had come about because of new ways of working and thinking – the high-performance culture was a by-product
- Make your culture clear to all Netflix’s powerpoint deck (presentation) was written by the founders in the early days to set out the corporate culture, including things like the company expense policy which is only five words long: “Act in Netflix’s best interests”. The deck is 127 pages long but has been viewed by over 13 million people and was described by Sheryl Sandberg as the most important document to come out of Silicon Valley. Along the way it has been shaped and updated by colleagues, but remains an example of one of the most innovative HR approaches in the world
- Don’t create bland meaningless statements While most mission statements are generic and uninspiring, athletic clothing company Lululemon’s is clearly different. Their manifesto includes beliefs such as: Friends are more important than money; Do one thing a day that scares you; The world is changing at such a rapid rate that waiting to implement changes will leave you two steps behind. DO IT NOW, DO IT NOW, DO IT NOW!
As Childress says, a strong culture won’t make up for a poor strategy, and a great strategy can’t be delivered by a weak culture. While there may be no perfect corporate culture, recognising how important culture is, focussing on hiring staff that will strengthen it, and demonstrating your values every day will be critical components of your success.
About the author
John R. Childress co-founded Senn-Delaney Leadership Consulting Group and has a BA degree (Magna cum Laude) from the University of California, and Masters Degree from Harvard University.
John’s work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (including the breakup of The Bell Telephone Companies), and mergers and acquisitions with global organisations from the Fortune 500 and FTSE 250.
Born in Oregon, Childress was mainly based in London before retiring to France in 2001. He has written four thriller novels and has now established the Principia Group to work with senior teams on strategy execution and corporate culture.
“(Childress) … points out that the most common mistake bosses make when they try to change cultures is to think in grandiose terms, whereas it is often the little things that matter most. “Sensible” might not sound like particularly high praise but, for a business book in this charlatan-infested field, it is an accolade worth having.” The Economist
“You need to read this book before your CEO does!” Frank Tempesta, former CEO, Textron Systems Companies
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Author: John R. Childress