It’s the CULTURE stupid

Former US President Bill Clinton will be remembered for many things. Among those, few will debate his deft use of language and his powerful and compelling oratory skills.

One of the greatest examples was the campaign phrase he and his team used to defeat President H.W. Bush in 1992.

“It’s the economy stupid”

Originally intended as a rallying cry for the internal campaign team, it gained so much traction amongst voters frustrated at the blossoming recession that this simple phrase became a catalyst for change and ushered in 8 years of the Clinton’s.

Like many of my colleagues, this time of the year is a wonderful time to reflect on the year that will soon be behind us and the year of potential and opportunity that lies before us.

What did we learn? What moved us forward? What should never have happened? What are we going to do better in 2019?

With all deference to Bill Clinton and his team, I think 2018’s highs and lows – and the opportunities that 2019 presents us can be summed up quite simply in this term:

“It’s ALL about the Culture stupid”

(As a polite Canadian and a direct Zimbabwean I struggle with removing or keeping the “stupid” word. Its kinda derogatory but, truthfully, if you’re still not convinced that Culture is your organization’s only sustainable competitive advantage, then well….the shoe does fit)

 What were the organizational culture highs and lows of 2018?

The tech sector – and in particular the behemoths of Facebook and Google – spent much of the year coming under intense scrutiny for poor executive leadership decisions and, once the dust had settled, forcing many pundits to wonder if the years of Silicon Valley hero worship might finally be drawing to a close.  

Amazon workers protest across Europe about their conditions.

Amazon workers protest across Europe about their conditions.

Mark Zuckerberg and Sheryl Sandberg spent much of 2018 in the hot seat. From the hugely damaging Cambridge Analytica scandal of March, to pandering US senate hearing in the Spring and to ongoing allegations of brutal personal management styles by the author of bestseller “Lean In”, the executives at Facebook have seen their coveted organization earn the ire of public and politicians alike. Calls for regulating the social media giant have grown in volume almost as much as the use of the hashtag #deletefacebook has grown in public circles.

Google didn’t fare much better in 2018 either. Long lauded for a progressive and driven culture, on November 1st thousands of Google employees staged a walk-off to protest the organization’s poor internal handling of sexual harassment cases. These stories weren’t helped when it was revealed that the founder of Google’s massively successful Android operating system Andy Rubin was given a $90 million dollar exit package despite a number of credible harassment cases hanging over him.

The 2017 #MeToo phenomenon gathered momentum in 2018 and its impacted was felt across numerous sectors and recognized organizations as one by one high ranking male leaders were forced to resign. Many of the cases showing a systemic culture where these incidents were not only frequent but, more damning, were actually known and actively covered up. Former CBS boss Les Moonves perhaps the most recent and most high-profile example of the gathering (and welcome) momentum of this movement. If there is a silver lining to this story, the fact that he would not receive $167 million severance package highlights that this type of behavior – or the type of culture that allows this to perpetuate – is no longer acceptable or forgiven by boards and shareholders. 

If Leadership and Cultural scandals around sexual harassment and consumer privacy and security weren’t enough, we still had some good old fashioned “accounting irregularity” scandals to taint the waters in 2018 too. The November arrest of Nissan CEO Carlos Ghosen in Japan for financial irregularities and diverting corporate funds to pay for personal expenses has shaken the Japanese business community – particularly as Ghosen was widely hailed as a turnaround legend.

 This quote from the day of his arrest highlights the cultural norms – both country and corporate – that could allow this to occur.

"Japanese companies are very closed. They're like a family," said Parissa Haghirian, a professor in international management at Tokyo's Sophia University.

That means there is often little outside influence to bring to light behavior that is unethical or illegal, especially among senior executives.

"They've spent so long with the same people in the same firm, they kind of make up their own rules,"

 Of course, there were equally amazing stories – often from a collection of the “usual suspects” – that highlighted that strong and purpose-driven cultures can and do drive significant consumer admiration.

Patagonia donating $10 million from a tax refund to environmental groups highlighted that, as in everything, actions speak volumes in terms of culture.

While readers might debate the statistical validity of this claim, anecdotally the topic of culture has risen in open LinkedIn debates and across boardrooms worldwide. The number of business books on culture and leadership now numbers over 4,000 on Amazon and 3 of the top-selling Amazon books in 2018 are stories of enhancing culture including Daniel Coyle’s amazing “The Culture Code” at #4 which contains one of my favourite baselines about the benefit of organizational culture - A strong culture increases net income 756 percent over 11 years, according to a Harvard study of more than 200 companies

So what about 2019 then?

I’m incredibly optimistic that 2019 will be a year that organizational culture will be seen as even more critical to an organization’s success than ever before.

As more and more organizations expand and deepen their Digital Transformation journeys – and concurrently more and more statistics point to Culture as the reason those journeys have (or will) fail – I see the Culture conversation moving from invisible to inevitable.

Screenshot 2018-12-21 15.30.50.png

As the skills and talent shortages in burgeoning tech sectors increase – try hiring a data scientist in North America, or anywhere for that matter – organizations will realize that top talent needn’t settle for a mediocre culture and that the former lure of more money just isn’t going to cut it with today’s talent.

As more and more transparency occurs around our work environments and the ludicrous situations that many workers face, the public backlash will only increase. When the wage differential between America’s highest paid executives and the average worker rises to a factor of 312, then something is amiss. When the richest man in history Jeff Bezos has workers who are forced to live off government food stamps then a sharp focus on organizational leadership and culture must surely follow.

As organization’s realize that the $720 million spent annually on employee engagement surveys do little more than highlight that these numbers are stubbornly stagnant, they will move to mechanisms that look closer at root causes for culture misalignment and stop using blunt tools when surgical precision is desperately required.

Gallup Engagement Flat Line.jpeg

As organization’s grapple with rapidly accelerating workplace dynamics – remote working, heightened need for purpose and meaning, five generations in the same workplace, the gig economy or side hustle reality, more and more data analytics tracking employees – no ELT can rest on leadership principles and practices that are sorely outdated or obsolete.

As 2018 closes out and 2019 beckons, I do think that the groundswell around organizational culture will continue to build. Its inevitable.

After all, culture is either the accelerant for your business success – or the principal impediment.

What say you Dear Reader? What are your thoughts on the importance of Culture as a critical business driver in 2019? I’d love to get your thoughts.