Where Does Bad Corporate Culture Come From, and Can It Be Corrected?

Bad corporate culture arises naturally from human nature, lack of management savvy, and bad or clueless management behavior. Corporate culture is built from the combined experiences of the members of the organization, the quality of their interactions with each other and outsiders, the results of the organization’s efforts, and the psychological tone set by top management and every level of management beneath it. All of these factors are expressed in, and some are caused by, management behavior, and poor management behavior will always affect the culture negatively. The good news is that you can work to correct and improve the culture at your own level.

After Cost of Quality … Cost of Culture?

The “cost of quality” concept advanced management science, but what’s next? As the science of business management has progressed, cost measurement has long been a key endeavor, as it provides a lot of the information needed to know how the business is doing and to make decisions, solve problems, and make improvements. In the past few decades, areas of cost measurement such as cost of sales and cost of quality have provided helpful insights for management teams, and improved the competitiveness of companies that understood them. Famous business gurus have weighed in on cost measurement with great positive effect. W. Edwards Deming once said “The greatest costs in business are unknown and unknowable.” Finding ways to measure those unknown costs has produced significant gains in the understanding and effectiveness of business processes, and significant progress has been made in assessing increasingly tougher areas of business, but one area has always escaped effective measurement, though it has perhaps the biggest impact on business performance of any: the culture of the organization.

Dysfunctional Organizations Are Like Dysfunctional Families

Dysfunction causes organizations and families to fail to meet their goals.  I wish I had time to do actual digging (and research) on this, but other things like … making a living … make that impossible.  Still, I have my observations, and here they are:

The impact of dysfunctional relationships and behaviors is almost always negative.  When an organization is dysfunctional, such as when one part of it has inordinate power, it will be challenged to meet its goals.  Quality, timing, and cost will all usually be less favorable than planned.  Projects will be routinely delayed, costs will routinely be revised upward, quality will be at risk of being forgotten in the quest for profitability and timeliness, products will be at risk of many and/or severe defects, and customer satisfaction will lag behind more capable and less dysfunctional competitors.  Similarly, a dysfunctional family will have parallel problems with achieving its goals.

The Cost/Benefit Ratio and the Acquisition of Information

 

One of the most frequent and frustrating occurrences I see among corporate managers is the failure to understand the cost-benefit ratio of information.  This is the idea that it costs a certain amount to obtain each bit of information, and that cost rises as you approach 100% of the information you might need (or think you need) while the value of each bit of information falls.  To relate it to the Pareto principle, in almost any situation you can get 80% of the information for 20% of the cost, but the other 20% of the information will cost you four times as much.  This is perhaps a bit of an overstatement, but illustrates the concept. 

Some Problems with “Command and Control” Management

What is “command and control” management? Many good articles have been written on this by smart folks like Joel Spolsky and Bruce Nussbaum. A good description is included in the Traditional Management Model page of www.1000ventures.com in the section (near the bottom of the page) labeled “25 Lessons from Jack Welch“. Much has been written decrying “command and control” management, but what makes it a bad thing?

Is a “People Whisperer” the Optimal Manager?

This morning NPR did a story on a woman writing a novel about a female horse trainer of the late 19th century, who used the “horse whispering” or “gentling” technique and was superior to the others in her profession.  The traditional method of breaking horses at the time (and still prevalent) was to have some big brute of a guy get on the horse and ride it, bucking and kicking, until it tired out and was “broken”.  Needless to say, horses trained in this way often developed personality disorders or other peculiarities that were occasional problems for the owner or rider.  I quickly began to see implications for the management of human organizations.