Last Thursday morning, Mary Barra, the veteran General Motors employee who became General Motors CEO last January, stood before her employees to report findings of the 315 page report by U.S. Attorney Anton Valukas investigating the company’s mishaps.
In unambiguous words, she admitted the company had failed. She accepted blame for the company’s faulty ignition switches responsible for 54 accidents and 13 deaths. She outlined corrective actions taken including the dismissal of 15 employees and pledged that the company should not forget this chapter in its history.
The headline in Friday’s Wall Street Journal captured it succinctly: “GM Takes Blame, Vows Culture Shift”.
I watched her speech. I was struck by its candor and unequivocal acceptance of responsibility. And I found myself thinking about the power of corporate culture in every organization.
An organization’s corporate culture can account for up to 30% of its performance when compared to “culturally unremarkable competitors”, according to James Heskett, UPS Foundation Professor of Business Logistics, Emeritus at the Graduate School of Business Administration, Harvard University. So it matters.
In a recent Harvard Business Review article, John Coleman, coauthor of Passion & Purpose: Stories from the Best and Brightest Young Business Leaders. laid out six attributes of an organization’s culture. They’re quite tidy…
1. Vision: “A great culture starts with a vision or mission statement. These simple turns of phrase guide a company’s values and provide it with purpose”
2. Values: “A company’s values are the core of its culture. While a vision articulates a company’s purpose, values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision’
3. Practices: Of course, values are of little importance unless they are enshrined in a company’s practices. Whatever an organization’s values, they must be reinforced in review criteria and promotion policies, and baked into the operating principles of daily life in the firm.
4. People: No company can build a coherent culture without people who either share its core values or possess the willingness and ability to embrace those values.
5. Narrative: Any organization has a unique history — a unique story. And the ability to unearth that history and craft it into a narrative is a core element of culture creation.
6. Place: Place — whether geography, architecture, or aesthetic design — impacts the values and behaviors of people in a workplace.
I find myself reflecting on the power of corporate culture in healthcare more and more these days. Our industry is under unprecedented stress. The collision course between clinical innovation and their costs is frustrating to innovators. The tension between health insurers and hospitals is palpable and intensifying. The reality of our heavily-regulated industry and the risk associated with non-compliance over-shadows every relationship and business practice. The fears and frustrations of our professionals—physicians, nurses, allied health professionals—loom as a culture crash.
Most healthcare organizations—for profit and not for profit—say they cover all six categories. But in all likelihood, so did GM. What happens is simple: aspirational corporate culture is compromised by the tyranny of the urgent, or by the expectations of a person’s superiors. Corners are cut to hit numbers. Leaders are retained that make no waves. Loyalty is rewarded over competence. And ends are justification for any means. Corporate culture is words; actions something else.
No doubt, Mary Barra heard lectures about corporate culture at Stanford. No doubt the GM board on which she served discussed culture in its meetings. No doubt, GM employees have a sense of the company’s aspirational culture—what it says it would like it to be. But reality is something else.
In our healthcare organizations—hospitals, medical practices, drug and device manufacturing companies, health insurers—and in the professional service firms we use—lawyers, accountants, consultants, architects, et al—the issue is not our aspirational cultures. They’re usually quite straightforward. What’s at issue is the gap between our aspirational culture and the reality of how we operate day to day.
The aspirational culture in our organizations needs fresh resolve. And the leaders we employ unequivocal commitment to make sure the gap between its aspiration and day-to-day workplace reality is narrow.
Sources: Jeff Bennett, Mike Ramsey “GM Takes Blame, Vows Culture Shift: Auto Maker Fires 15 in Recall Failures; Internal Report Finds ‘Troubling Disavowal of Responsibility” Wall Street Journal June 6, 2014;John Coleman “Six Components of a Great Corporate Culture” Harvard Business Review May 6, 2013