Helping the Chronically Overworked Find Life Balance

The Benefits Of Working For an Ethical Company

Chapter 6: The Invisible Hand Of the Company part 10

Throughout much of the chapter, I have argued that it is extremely difficult to change company culture.  It’s so hard in fact, that I don’t think it’s worth trying if you aren’t the CEO, and even then it may not be possible.

But the good news is that there is a wide range of company cultures.  One of the greatest myths about the workplace is that “everyplace is like this.”  That isn’t true.  It is true that no place is perfect, but there is a dramatic difference in the ethical climate between companies.

The business ethics literature describes an ethical culture as a company with a focus on the “wellbeing of multiple stakeholders such as employees, customers and community,” whereas a culture that encourages unethical decisions has an “everyone for herself” mentality.[i]

And how can you tell which type of company you work for.  To state what is probably obvious, one place not to look is the written code of conduct.  According to a large statistical meta-analysis of the business ethics literature, the presence of a code of conduct is not correlated with actual behavior in the company.  What matters is that the code is enforced uniformly across the organization.[ii]

So how are people treated in your company?

Are bullies tolerated?  Are vendors treated fairly?  Are the leaders held to different standards?  Are certain people allowed to get away with swearing while others will get talked to by their manager?

The small things matter, because they are clues to what will happen when the big things come up.

For a happier, more balanced life, the long term solution is to separate your identity from the company.  More on that in the next chapter.  But in the short run, the best answer may be to change companies.  In my opinion, all things being equal, it is better to work for a company that treats people well because you will be treated well.

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[i] Bad Apples, Bad Cases, and Bad Barrels: Meta-Analytic Evidence About Sources of Unethical Decisions at Work.  Kish-Gephart JJ, Harrison DA, Treviño LK. . J Appl Psychol. 2010 Jan;95(1):21

[ii] Ibid

When Can a Leader Change The Culture?

Chapter 6:  Corporate Culture -The Invisible Hand of the Company Part 7

Over the last few posts, Harry T. Lobo went from being a successful CEO to feeling “bruised and battered” as COO at a larger company.  One reader told me that reading the post left “an aftertaste of sadness and bitterness.”  I understand the reaction – I had it myself when Harry was telling me the story, in part because it reminded me of times in my own career when I felt the same way.  By understanding what made it hard for Harry, I was better able to understand my own experience.

And what made it so hard for Harry? He was working in a culture that did not match his values, and he was powerless to change it.  For example, Harry believed in long term relationships with customers, but the company culture prioritized the quarterly number.  Let me say that again: Harry T. Lobo, former CEO and extremely effective leader, was unable to change the company culture.  A less capable person would have left, but Harry’s tenacity and self-confidence led him to stay in a toxic situation, thinking “I’m not going to be defeated by this.”  I’ve been there too.

I have come to believe that it is almost impossible for an individual to change the company culture.  Think about it: if it were easy, would so many corporations spend millions on “change management?”  Bain executive Frederick Reichheld outlines eight steps towards changing company culture in his book The Loyalty Effect, a process that takes years.

So my advice? Don’t bother to try to change the company unless:

  1. You are CEO
  2. You have the support of the board
  3. You have absolute power to hire and fire people
  4. You are ruthless enough to clean house.  (Marissa Meyer at Yahoo is doing exactly that right now, and I suspect it will turn Yahoo around.)

Unless all four of these things hold true in your situation don’t bother to try to change the company culture.  Cynical and hopeless?  Not at all.  It is liberating to accept the truth.  The energy going into change can be redirected into your personal life  or towards influencing your local environment within the company.  Or into finding another place to work. Chapter 9 Paint Your Environment will go into solutions for corporate culture in greater depth.

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When Stress Goes Up, Perspective Goes Down

Chapter 6:  Corporate Culture -The Invisible Hand of the Company Part 6

In the last post, Harry T. Lobo, the high integrity executive we met in Chapter 4 who was demoted after a year as COO, even though from an objective standpoint the company met an aggressive set of revenue and product launch targets.   When Harry described himself as exhausted, I asked if the CEO pressured him by calling him at home.

No, he said “the pressure more subtle and psychological, the ‘you’re not really up to it’ sort of thing.  Harry described feeling “bruised and battered,” and at times questioning his own competence.

“It’s not as if I’m sitting around not thinking about this day in and day out.  If it’s still not good enough how the hell can I possibly improve? How can I be getting this wrong with all the work I’m putting in?  But then with me the grit and determination comes in, and I say ‘I’m not going to be defeated by this.  How CAN I address some of the issues being raised here?’  It means either going back to what you were doing with renewed confidence to push it a bit harder, faster, etc.  Or you could say, ok, I’m doing something wrong here.”

In my opinion, those very qualities that made Harry an effective CEO in his next position – loyalty, tenacity, self confidence – worked against him in this situation.  Sometimes, continuing to fight is not the right answer.  In hindsight, Harry understands that the CEO’s expectation of 15% growth because “the technology was so great” was not rational.  But at the time, when he was in the thick of it, just wasn’t possible to take that longer perspective.

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Understanding the Impact of a Hockey Stick Culture

Chapter 6:  Corporate Culture -The Invisible Hand of the Company Part 5

In the last post, Harry T. Wolf explained why he could not change the culture of Goldman Sachs if he became CEO.  And, we saw how Harry went about changing a “negative, finger pointing, aggressive culture.” It took Harry years to make changes, and he had the support of the board to make it happen.

Prior to his current (and second) stint as CEO, Harry was the Chief Operating Officer (COO) of a technology company in Silicon Valley I’ll call “ScorpCo*”.  During Harry’s first year, the company launched a complete upgrade to its platform – software, hardware, peripherals and third party components.  “I am intensely proud of what the organization achieved during that year.  [We delivered] it all, and had successful sales.  In most companies, you get paid it big bonus for that.  It didn’t work that way at Scorpco.”  Wall Street rewarded the company for making its numbers.  Harry was demoted.

The year was difficult – Harry had to defend many decisions publically that he did not agree with.  “I’m a firm believer that if you’re part of a management team that by whatever mechanism decides on a course of action, it’s your duty to carry it out with absolutely the best grace you can. I have always tried to take ownership of that decision, rather than place it as a third party decision.”  Harry had a philosophy of long term objectives, but the company was perpetually focused on the short term – “60% of revenue came in last 48 hrs [of the quarter.]**  It’s a crazy way to run a business.”   According to Harry “burnout was high” among employees, and he felt “sheer exhaustion, both physical and emotional.”

It doesn’t have to be that way, and Harry’s life got much better after he left the company.  The reason why he left surprised me.

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*ScorpCo is a fictitious name I picked because the CEO is a Scorpion.  This post from Chapter 4 gives an example of working for a Scorpion

** A hockey stick culture like this will eventually exhaust everyone both in and out of sales.

What Happens When High Integrity CEO Meets Toxic Culture?

Chapter 6:  Corporate Culture -The Invisible Hand of the Company Part 4

If you take a high integrity  person and put them in a toxic and/or unethical culture, which would win?  In other words, to what degree can an individual influence and change corporate culture?  It’s a question we’ll come back to multiple times in this chapter.

Lets start with an extreme example: What if Harry T Lobo, a highly respected and effective CEO we met in Chapter 4, were made the CEO of Goldman Sachs, a company thought by many to have an unethical culture. (Greg Smith’s very public resignation made public the callus and thoughtless way Goldman treated their clients. See this post on the subject for more.)  Harry, who is not known for his modesty, didn’t think he could change the company value system.  Harry told me “[It would] depend on the company, and how long the value system existed.  Goldman Sachs [is very big and is] proud of the way it operates.”  Harry explained to me that everyone working there shared those values, and the organization is too big to change by the CEO alone.

It took Harry five years to change the culture of the mid-sized organization he is currently running.  When he arrived, the company was full of “empire builders,”  with a “negative, finger pointing, aggressive culture.”  People who were resistant to the values he was instilling are “no longer around.”  Harry said that he let this happen over time, as people realized they no longer fit in they left, and people who espoused the values he was looking for were promoted.  (And see this post to see a case where Harry dismissed someone for being manipulative.)

This is a common theme I heard throughout the interviews I conducted, and is well described in the literature: People who fit best with the company values, whatever they may be, will tend to be promoted more quickly.

So how did Harry respond when he was working as a Senior VP in a toxic culture?  Did he change the culture, or was he changed by it?

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