by Laurie Fitzjohn-Sykes, director of research, Tomorrow's Comapny Read the original article here. It is now 25 years since Tiny...
Recently there have been articles in the media calling for cultural change in companies in the financial services industry. These articles do not go deeply into exactly what is meant by company culture, let alone how it can be changed.
Various definitions of culture are offered –‘the way we do things around here’ or ‘a widely shared set of beliefs and values’ or ‘shared norms and informal standards governing behaviour’. An underlying assumption behind these and similar definitions is that any given company has just one culture, just one set of shared values, holding sway throughout the organisation like the name of a seaside resort in a stick of rock. In reality, company culture is much more complex.
One aspect of this complexity is the existence of strong sub-cultures struggling for dominance. For example, in an investment bank the culture in the trading room and the accepted norms and behaviours that exist there will be radically different from the culture of the back office or the compliance team. The culture of the trading room at Barclays will have more in common with the trading room at HSBC than with any other division of Barclays.
In research I did some years ago which involved 50 major companies across the US, the UK and Europe, I identified three main subcultures that existed in virtually all the firms that were being studied.
The first such subculture was the domain of those whose focus was primarily on company performance and the financial bottom line. This group included not only those in the finance function but also others whose work focused on costs, efficiency and productivity.
The second subculture consisted of those involved in marketing, selling, customer relations and public relations. Their focus was on customer satisfaction, the sales figures, market share, and company reputation.
The third major subculture was made up of those whose expertise was the main plank of the company’s activities. For example, the scientists in GSK or the engineers in Rolls Royce, the creative teams in an advertising agency, or the star traders in an investment bank.
Each of these subcultures has its own set of values, its own way of working, its own standards of behaviour, its preferred type of working environment and its own dress code. It also has its own way of defining success and its own way of celebrating it. The ongoing life of a company and the ultimate decisions made and policies adopted are the outcome of a struggle for dominance between these three cultures. Watching the struggle and picking up the casualties is the small subculture of the HR function.
Ideally the three subcultures or tribes should be in balance. We have seen the results in retail banking when the sales subculture became too powerful. Keeping the balance and getting all three to work together is the job of the CEO who must guard against any bias due to his or her own past tribal loyalty.
In most cases the outcome of the struggle can be seen in the choice of the CEO. Is he or she an accountant, a scientist, or someone who has spent most of their life in marketing? When a company chooses a new CEO is this a sign that the dominant subculture is changing?
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