When there’s less money coming in, the conventional wisdom holds that it’s prudent to cut your spending, whether you’re a consumer or a multinational corporation. This is particularly true if the economy is experiencing the worst downturn in eighty years, and it’s not at all clear when there will be a return to prosperity.
Sure, there are always opportunities, if the wolves aren’t yet at the door, for those willing to take a risk. While everyone else is being tight-fisted, you can get a great deal on that new Cadillac Escalade you’ve been lusting after. If all of your competitors are cutting back, a well-timed investment in marketing can help your company gain share.
But fearful times have a tendency to bring out the worst in people. The emotion-generating amygdala starts pumping cortisol into the system, slowing our thinking and narrowing our vision. Just when we need to be at our best, we become stupid. Across the board cost cutting driven from the top down isn’t always the smartest approach.
When you’re up to your neck in alligators, you may forget that your goal was to drain the swamp. However, that doesn’t make the snapping jaws any less real. Nor will a trip aboard the Starship Enterprise to the final frontier of culture change, despite the assertions of a recent article in The Wall Street Journal.
It’s hard to argue against the two studies quoted in the article, claiming the limitations of cost-cutting initiatives. I’m even willing to believe in the benefits of culture change, though the survey touting them was conducted by a consulting firm that makes its money from, of all things, selling culture change.
But what bothers me is the article’s mystification of culture. The “right” culture comes across as the magic beans that will grow a giant stalk of profitability. The definition we’re offered by a business school professor is “people believe in the organization, in their land manager, and therefore help them perform as much as possible, they think they are valued by the organization, both employers and workers are gaining mutual benefit.”
Now all of this is good stuff, but it’s just the kind of thing that gives my profession a bad name (or makes people question if it is a profession.) I can’t see any one of my clients betting their company’s survival on “you’ve got to believe,” nor would I have any idea how to quickly effect such a belief.
Culture is the set of ingrained habits that determine the way people do things in the absence of prescriptive policies and procedures. But more than just belief is needed to realign those habits with the critical success factors of the business. It takes a consistent message, conveyed through everything leaders do and say, about how people can come together, behave in specific ways to overcome obstacles, and achieve an exciting vision of the future.
But when the alligators are restless, there’s a more immediate way to achieve efficiencies and refocus efforts. Gather the responsible people together and give them all of the unvarnished information you can about the state of the business. Share the financials and the challenges. Then ask them to work together to come up with recommendations on what to do.
This will engage them, give them control over their destiny, and create ownership for what needs to be done. Since they’re closer to the work, they’ll avoid many of the mistakes that are inevitable when cost-cutting is mandated from the top down. If two heads are better than one, an entire organization of minds is bound to come up with better ideas than an individual manager, no matter how smart he or she may be.
This approach can be implemented quickly and doesn’t depend on turning around the Queen Mary of corporate culture before results are achieved. Nor does it require a starship, or beans of any kind. And when it’s employed, a high performing culture magically takes hold.