Organizational Culture? – Your Company’s Thinking and Behavior.

The announcement of layoffs at Microsoft has created a flurry of responses to the memo from Microsofts’ CEO, Satya Nadella. The subject heading of the memo reads, “Starting to Evolve Our Organization and Culture.” This title struck a chord with me as I have become very curious with the language used in memorandums from executives during times of change. What struck me in particular is the use of the word “culture” in Mr. Nadellas’ memo. If you’ve read the email you may have noticed that the only time the word culture is used, is in the subject line and then repeated verbatim in the closing sentence. Clearly Mr. Nadella has been well coached by some well meaning consultants, because indeed, your organizations’ culture is driving and informing every decision made. The question is begged, what is your plan to “evolve the culture”,when your entire memo simply lists the all too common steps that come with major restructuring and downsizing efforts.

The very first move in Mr. Nadellas’ ‘evolution of the organization and culture,’ is to reduce the size of the organization by 18,000! This is a shocking number of people to be losing their jobs at anytime, anywhere. To deliver such news with such aplomb leaves me wondering if the CEO has an understanding of the impact to Microsofts’ employees. Among employees at the 2014 FORTUNE 100 Best Companies to Work For, 85% believe layoffs would only be used as a last resort. Its difficult to imagine Microsoft workers describing their organization as a great place to work. Furthermore, the memo does not address anycultural artifacts that have led to the need for the reduction and elimination of particular roles. What actions and behaviors have led Microsoft to conclude that the organization necessitates downsizing? The answer in the memo is “work simplification” and “integration of Nokia”. In my opinion, this is a travesty to the 18,000 people who are no doubt devastated by this decision.

The first time I raised the question with an executive of contemplating the organizations culture, and what, if and how they examined the impact of culture on the future business objectives and strategies, the response reminded me of the words of Edgar. H. Schein (the first person to coin the term Organizational Culture), “culture and leadership are two sides of the same coin, and one cannot understand one without the other.”

I do not want to criticize Mr. Nadella’ for his memo, however, I cannot help think and feel that the words are not completely his, but have been scripted by well-meaning corporate communications folk; thereby leaving his readers feeling somewhat or completely non-plussed or unconvinced. The words read to me like the memorandums which have become commonplace over the last 10-15 years since the advent of downsizing initiatives. If you read between the lines, or listen deeply to the underlying message, you can hear the “flavor of the month” language and “business jargon” in the memo. In this case, the term “evolve the culture,” is a direct rip from the great organizational culture expert Edgar. H. Schein. The problem with Microsoft CEO’s note, is that he does not speak to why the organization has concluded that there is a need to evolve the culture, i.e, the new rules, behaviors, values, and beliefs and assumptions which will need to change.What he has laid out is nothing more than standard operating procedures for restructuring/downsizing models which are being emulated everywhere by CEO’s, who’s sole focus is on quarterly earnings. Too harsh?

If leaders recognize the role of culture within the organization, they will fully acknowledge that culture change or evolution is deeply invasive, and requires a commitment from leadership in the longterm. I have found in my own experience that “culture is deep. If you treat it as a superficial phenomenon, if you assume you can manipulate it, or design it at will, you are sure to fail. Furthermore, culture controls you more than you control the culture.

The remaining challenge for organizations today is to really and truly be committed to building a great workplace. The organization Great Place To Work has spent the last 30 years defining what makes an organization a great place to work. With this latest episode at Microsoft and other recent downsizings, I am thoroughly convinced that the role of culture is misunderstood or overlooked. Almost every restructuring plan involves the benchmarking, cost-cutting, simplification, reduction of middle management, and streamlining processes. Does it not strike executives that the way people act and think about their organization, their leaders, and their role in accomplishing the organizations objectives needs to be equally understood? Bill Emerson, CEO of Quicken Loans does. He spends 40% of his time attending to the company culture. Nordstrom president, Blake Nordstrom and his executive team spend 50% of their time on the road, staying close to both the employee and customer experience. These leaders believe in the importance of values and do not subjugate them to the next quarter earnings.

In addition to the new leadership skills required to be truly effective today, I believe that 21st century leaders must have an intimate understanding and competence around organizational culture, as well as an understanding of the culture of the organization they lead.

I believe it is worth stating very emphatically that organizations are incredibly complex, and it is only a deeply engaged and emotionally and socially aware leader who will make a serious inquiry into the role of culture — getting inside of the heart and mind of the organization. Culture is deep, extensive and stable. It cannot be taken lightly. If you do not manage culture, it will manage you — and you may not be aware of the extent to which it is happening.Leaders need to develop this kind of cultural intelligence.

Once again, I’m reminded that the organizational culture is the main driver for the business outcome — success or failure. Microsoft hasn’t identified how they have failed, however, if you decide on such a massive reduction in staff, something isn’t working! My point is simply this, get the culture right, and massive layoffs and restructuring need not be on the cards. Rather, expect the possibility to run with the likes of some of the most exciting and great work places like SAS, Wegman Food Markets, Google, Zappos, REI, Mercedes Benz, and Whole Foods to name a few.

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