Wednesday, March 11, 2020

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


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, says Bill Higgs, an authority on corporate culture and the ForbesBooks author of the Culture Code Champions: 7 Steps to Scale & Succeed in Your Business (www.culturecodechampions.com). 
“Your company’s culture should inform everything you do,” he says. “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,” says Higgs, a founder and former CEO of Mustang Engineering who recently launched the Culture Code Champions podcast. “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. Higgs says some steps crucial to establishing a company culture and keeping it on course include:
  • Encourage communication. Higgs is fond of saying that 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,” Higgs says.
  • 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, Higgs says. Leaders should communicate regularly with employees to make sure they understand how valued they are. He says 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,” Higgs says. 
“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.”

About the Author: Bill Higgs, an authority on corporate culture, is the ForbesBooks author of Culture Code Champions: 7 Steps to Scale & Succeed in Your Business. He recently launched the Culture Code Champions podcast (www.culturecodechampions.com), where he has interviewed such notable subjects as former CIA director David Petraeus and NASA’s woman pioneer Sandra Coleman. Culture Code Champions is listed as a New & Noteworthy podcast on iTunes. Higgs is also the co-founder and former CEO of Mustang Engineering Inc. In 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. Second, third and fourth-generation leaders took the company to $2 billion in 2014. Higgs is a distinguished 1974 graduate (top 5 percent academically) of the United States Military Academy at West Point and runner up for a Rhodes scholarship. He is an Airborne Ranger and former commander of a combat engineer company.

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