Message of the Day - the Power of Culture

Good Morning,

 

Continuing in my reading of “The Carrot Principle”, I came across a section on culture. We hear a lot about the importance of culture and there are some wonderful people, like our friend Kirk Weisler (www.kirkweisler.com) who share many ways to build, repair and maintain a great company culture, but sometimes folks may not understand why a strong culture is important to the success of a company.

 

In my MBA program I learned that most mergers between companies fail. The number has been reported as 2/3rds or more fail. A lot of the reasons behind why they fail have been listed as different infrastructures, technology, the cultural diversity of where these companies are from (e.g., a company in Japan merging with a company in Mexico). Most of these sound like reasonable reasons, but reading this section in the Carrot Principle really struck a chord with me.

 

The authors stated that most mergers and acquisitions fail due to the inability of different internal company cultures to mesh or work well together, they often clash. The forcing together of two cultures means that both cultures, even if highly successful cultures, will force them to make changes and changes to cultures can be devastating.

 

Early in my Dot.Com career, e-STEEL had an amazing culture. We were creative, energetic and driven to make the company a success. The leadership pushed the technology and the achievement. When reality set in that the investment capital would not last forever, and would disappear faster the longer we did not bring in a profit, the leadership changed its tune. Productivity and reducing costs became the nature of the game. The culture was devastated. I remember at the first all hands meeting discussing the change, someone asked ‘how are we going to go back to the culture we had before’. The answer was simply ‘we weren’t’. And then the place became an entirely different animal to work in. Many people left, others were downsized, and that driven creative culture now worked in a frantic pace to stay away from the chopping block.

 

All companies need to be profitable, but they also need a strong culture which supports this productivity.

 

What are you doing to help make sure your culture is strong and vibrant?

 

Enjoy!

 

Sanford Berenberg

Sanford@berenberg.net

http://sanfordberenberg.blogspot.com/

502-533-9336

 

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