Company Culture: Why You Should Care
“The thing that I have learned at IBM is that culture is everything.” – Louis Gerstner, Jr., former IBM Board Chair
Culture is the package of a company’s beliefs, practices, behavior, customs and history, and it’s essential that any new leader is a fit for their new company’s complex and diverse culture.
The windows into a company’s culture are its actions, not its slogans. A culture is well evidenced by how a company’s leaders speak and behave when no one else is watching.
One example: when it was reported (back in 2012) that, in private, Goldman Sachs’ culture disdainfully viewed clients as “Muppets,” this was contrary to the firm’s public persona, and it damaged the firm’s brand and relationships.
From Standish’s own survey of business leaders: In fitting new leaders into an existing organization, a number of respondents cited cases of hiring some talented and previously successful people who later found themselves lost in an unfamiliar culture. One CEO recalls his company’s captivation by a candidate’s intelligence, industry experience and track record, ignoring a cultural mismatch that was eventually destructive.
Once on the job, those new executives who are inappropriately matched to the culture have difficulty collaborating with peers, marshaling the support of subordinates and establishing their own credibility. Further, they often clash with bosses or boards.
Many companies have wrongly assumed that an executive successful in one culture could easily adapt to any other. This assumption often ends in termination or resignation, commonly within six-to-twelve months.
Cultural Contrasts There are genteel, or rough and tumble, cultures. There are organizations that succeed with bureaucracy, while others rely on entrepreneurship. Some long-standing organizations thrive on a “command-and-control” structure, while others succeed with collaboration and employee involvement. Some are deliberative; others are more decisive. The contrasting pairings are innumerable. No single culture is universally right, or even homogeneous within itself. And leaders who excel in one may be misfits in another.
As we evaluate prospective candidates for any business, it’s less difficult to gauge their essential talents and quantifiable successes than their prospective fit in a new culture.
With due respect to behavioral science, one of the most reliable gauges of culture-fit is a seasoned leader’s simple gut feel.
Whether you can explain it or not, when it comes to hiring a new executive, if it doesn’t feel right:
Don’t ignore it;
Don’t think you can fix it;
Don’t do it.
Stan Davis is the Founding Principal of Standish Executive Search, a New England-based firm that advises business owners, executives and boards who are positioning their companies for accelerated growth, change or succession.