In post #146 (Integrity Idea 014: Understand Your “Real Culture”), we urged faithful leaders to undertake an honest assessment of the nature and health of their organization’s current culture.  We said understanding the “real” culture of the organization was a critical step on the path to leading with faithful integrity through business a better way toward Biblical flourishing.

This week, the Wall Street Journal published an articles that inspired us to revisit this important idea.  The article was titled “How Bank of America Ignores Its Own Rules to Prevent Dangerous Workloads”.

“Real” Culture

As we have said many times in prior posts, purpose and values define the culture of an organization, the culture shapes the behavior of the people in the organization, and the behavior of the people drives the results of the organization.

Culture is important because it defines the day-to-day experience that various stakeholders have with the organization.  It is how employees experience their work-day, how vendors experience contract negotiations and contract performance, and how customers experience interacting with the organization.  Unlike lofty purpose statements and value lists, culture is where the rubber meets the road and the boots hit the ground.

The core of Integriosity^® is an alignment of purpose, values and culture arising from a commitment to Biblical beliefs, principles and priorities that leads a person or organization, instinctively, to do the right things, in the right ways and for the right reasons.  Purpose is the cornerstone and values are the foundation that must define and drive culture, and culture needs to reflect and reinforce purpose and values.

Those following these posts will know that the Integriosity process has four steps: RENEW, RE-IMAGINE, RE-ALIGN, RESTORE.  A faithful leader first embraces a RENEWED understanding of God’s purpose for work and organizations and then uses it to RE-IMAGINE purpose, values and culture aligned with Biblical beliefs, principles and priorities, with the next being to RE-ALIGN the organization with the Re-Imagined Purpose, Re-Imagined Values and Re-Imagined Culture.

Re-Imagining Culture is more difficult than Re-Imagining Purpose or Re-Imagining Values, but it is where actual change occurs, where employees are engaged (or disengaged), where customers are retained (or lost), and where vendors become loyal partners (or transactional adversaries).

If the culture of the organization is not reinforcing its desired purpose and stated values, it is likely eroding them.  Whether an organization’s culture ultimately encourages and leads its people to do the right things, in the right ways and for the right reasons, goes back to its purpose, as translated through its values and communicated by its leaders.

Jacqueline Brevard, who served as Chief Ethics Officer for Merck & Co., Inc., made the following observation:

There is both a formal culture and an informal culture within an organization. In the formal culture, companies can say all the right things and have all the appropriate infrastructures in place. The informal culture is what actually happens within the company, how people behave, how they are rewarded, which rules are followed and which are not.

Regardless of what is posted on the website as an organization’s formal Re-Imagined Purpose and Re-Imagined Values, stakeholders such as employees, customers and vendors will experience, and respond to, what they perceive to be the real purpose and real values.  Their experiences and responses form the real culture. In the words of Lou Gerstner, former CEO of IBM:

What is critical to understand here is that people do not do what you expect but what you inspect. Culture is not a prime mover. Rather it is a derivative. It forms as a result of signals employees get from the corporate processes that structure their work priorities.

Proverbs 29:19 (NIV) warns that “servants cannot be corrected by mere words; though they understand, they will not respond.”

For example:

• The website may say “promote the flourishing of our people” and there may be wonderful processes in place to communicate and reiterate that purpose, but if the managers and employees in the organization perceive that Profit as Purpose is really what is encouraged and rewarded through behavior, a key role of the informal organizational culture of the business will be to drive profit at the expense of “flourishing”.  For example, a culture can be designed (or will just emerge) to drive or inspire people to perform at higher levels and contribute more to profitability through mechanisms like bonuses/commissions/promotions and the fear of elimination or demotion.

• The website may say “Integrity” is a value, but if the message communicated by managers is that employees are rewarded for “winning”, whatever it takes, then integrity will be eroded to uphold the real value of “Winning at All Costs”.

A recent report on business purpose found that 89% of business leaders felt purpose mattered but only 39% felt that the business model and operations of their organization were actually aligned with its stated purpose!

The Case Studies

In prior posts, we have mentioned how “real” culture deviated from stated culture at Enron and Wells Fargo.  The recent Wall Street Journal article reveals culture problems at Bank of America.  In all three cases, we believe the cultural problems tie back to Profit as Purpose.  Remember, values translate the purpose and shape the culture.  Ultimately, the culture reflects the “real” purpose–the real WHY.

Enron

When we think of real-world examples of a gross mismatch between stated values and real values, Enron is the first example that comes to mind.  Its stated values were Respect, Integrity, Communication and Excellence.  In Michael Novak’s 1996 book Business as Calling, Ken Lay, the Chairman and CEO of Enron is quoted as saying:

I was, and am, a strong believer that one of the most satisfying things in life is to create a highly moral and ethical environment in which every individual is allowed and encouraged to realize their God-given potential.

The real culture of Enron was famously (or infamously) a culture of pride and greed.  The impact of its scandalous collapse rippled through the energy industry and the economy more generally.

Wells Fargo

The more recent debacle at Wells Fargo is another example of a real culture that did not match the stated culture but aligned with a real WHY of Profit as Purpose.  The extreme use of targets and incentives in its sales culture led to workers living in fear, mistreating each other, leaving due to stress, violating client trust, and even breaking the law.

Here are a few quotes from a Wall Street Journal article about the sales culture at Wells Fargo:

“Ms. Kamar says laggards were threatened with termination and sometimes criticized in conference calls.”

“Mr. Holbrook says missing targets meant working extra hours when the branch was closed to make more calls.”

“Mr. Schrodt says he decided to leave Wells Fargo because the sales pressure was too stressful.”

“Bankers in branches who hit sales targets could earn bonuses of $500 to $2,000 per quarter, while district managers could get $10,000 to $20,000 a year, according to six Wells Fargo employees. Bonuses made a big difference in the paychecks of branch employees, whose base salaries often were about $30,000 a year.”

Using the Wayback Machine, we took a look back at the stated culture of Wells Fargo on its website in June 2015.  This was the year before the Wells Fargo scandal.  Here are some snippets from their “Culture” page (emphasis added):

Our success has as much to do with attitude as aptitude—what’s in our hearts, not just our heads. Our success depends on how much our team members care for each other, for their customers, their communities and our stockholders. Enthusiasm and caring enable ordinary people to do extraordinary things. We want our culture to embody care and enthusiasm. We want our team members to have fun—because success without fun never lasts, and fun without success isn’t much fun. “Fun” for us means enjoying our work, enjoying the people we work with, enjoying the difference we make in the lives of our customers and communities, and celebrating our achievements together as a team.

Every time we serve a customer, we should ask ourselves, “If I were the customer in this situation, how would this experience feel for me?” . . . We all work for the customer. . . . When we communicate with customers, we should do it with C-A-R-E: Consistent. Approachable. Respectful. Empathetic.

The Wells Fargo “Values” page described its values as including People as a Competitive Advantage; Ethics and What’s Right for Customers, among others.  In describing these it said (emphasis added):

We say “team members” not “employees” because our people are a treasured resource to be invested in, not expenses to be managed—and because teamwork is essential to our success in helping customers. We believe everyone on our team is important and deserves respect for who they are and how they can contribute to our work together. . . . We want every team member to be able to say, “I chose the right company. I’m valued. I’m rewarded. I’m recognized. We work hard, but we have fun, too.

We strive for the highest ethical standards with team members, customers, our communities and shareholders. . . . If you want to find out how strong a company’s ethics are, don’t listen to what its people say. Watch what they do.

We value what’s right for our customers in everything we do. . . .  Our customers— external and internal—are our friends. We advocate for their best interests.

Perhaps the most accurate statement was “If you want to find out how strong a company’s ethics are, don’t listen to what its people say. Watch what they do.”

Bank of America

The article that prompted this post was about Bank of America “ignoring its own rules.”  As background, in 2013 a Bank of America intern in London died of a seizure that was “possibly brought on by fatigue“.  Bank of America instituted an investigation and, in 2014, instituted new policies to protect young bankers from being overworked.

The current Wall Street Journal exposé follows the death of another Bank of America banker in New York this year.  Here are some of the quotes reflecting how the real culture around junior work has not lined up with the stated culture.

Roy Wang . . . said he meticulously logged his overtime hours. But when human resources told his bosses he was working too much, a manager told him to report only as many as were allowed by the bank’s policies.

The Wall Street Journal spoke to more than three dozen people familiar with the working conditions at Bank of America . . . . Many described how superiors instruct junior bankers to ignore policies that limit working hours. 

Some banks rolled out “protected weekends” to guarantee employees at least one day off a week, but many at Bank of America said those policies are frequently ignored by their managers.

One major impediment is senior bankers who see the early years as their profession’s rite of passage. That prompts some of them to ignore safeguards meant to protect the people who work for them.

Several current and former bankers at Bank of America said they were asked to violate those policies or directly witnessed them being contravened. They said many senior bankers across the institution tell junior bankers to avoid logging their actual hours, leaving them to work 15- or 16-hour days “off the books” for weeks. 

One associate, who left the bank this year, said it was routine to work 95-hour weeks while toiling on deals. The banker left not long after bosses appeared to retaliate against the employee’s choice to take a week of vacation in the fall. 

It is clear that Bank of America’s stated culture is to be one of the “best places to work”, and their website touts the recognition they have received.  In response to the Wall Street Journal’s questions, a Bank of America spokesperson said, “our practices are clear and we expect all employees including managers to follow them.  When we’ve learned of violations, disciplinary actions have been taken.”

Bank of America’s 35-page Code of Conduct dutifully requires compliance with all policies and requires people to “watch for and report concerns about possible violations“.

Aligning “Real” and Re-Imagined Culture

Bringing the real culture of an organization pursuing faithful integrity toward Biblical flourishing in line with its Re-Imagined Culture requires prayer, courage, trust, humility and planning on the part of its faithful leaders, but it is a critical step on the path to leading faithfully through business a better way.  It is leadership in the tradition of David and Mordecai:

And David shepherded them with integrity of heart; with skillful hands he led them. (Psalm 78:72)

For Mordecai . . . was . . . popular with the multitude of his brothers, for he sought the welfare of his people and spoke peace to all his people.

Honest Assessment

The first step toward ensuring that an organization’s real culture aligns with the Re-Imagined Culture being cultivated to reflect and reinforce its Re-Imagined Purpose and Re-Imagined Values is to undertake an honest assessment of the organization’s current real culture.  Once again turning to the wisdom of Lou Gerstner:

[F]or any CEO who wants to understand the real culture in his or her company: Do not look at the value statement in the new employee handbook. Go deep and understand what each process in the company is telling employees is important. Again, people do not do what you expect but what you inspect.

It requires an honest assessment of:

• Policies and Practices. The organization’s current culture, as reflected in its policies and practices related to areas such as hiring, termination, discipline, compensation, recognition, ethical behavior, training, vacation, family leave, customer service, vendors, and community service. Such an assessment must dig underneath the culture to examine the assumptions and motivations (such as Scarcity, Self-Interest and “Can We” Ethics) that may have underpinned the current policies and practices.

• Purpose.  The real WHY behind the organization’s purpose, values and culture.  Lofty purpose statements and value lists can be created in order to appeal to the perceived demands of investors, employees, vendors or customers, rather than in an effort to lead faithfully through business a better way.

Even healthy cultures can be intentionally curated for the “wrong” reasons–often the real WHY for “doing good” (or even being “Godly”) is profit. In the wise words of Larry Crabb:

Biblical principles are reduced to basic principles of the world when they’re followed in order to gain the ‘better life’ we demand.

We believe the real culture will reflect the real WHY, because it is the real heart of the organization.

• People: What employees perceive to be the real purpose, values and culture of the organization.  Whether they believe the informal culture aligns with the formal culture.   Leaders can begin to implement the “People” assessment on their own through larger-group forums, team meetings, table discussions, and one-on-one meetings.  It takes courage, tremendous humility and thoughtful planning for leaders to create spaces for employees to be honest and questions that will elicit helpful information.

But even with the best-intentioned courage, humility and planning, one problem is that leaders may be part of the problem.  After all, if there is an unhealthy culture (or unhealthy subcultures) in the organization, it developed, or at least existed, right under the noses of the leaders and possibly because of their behavior.  It can be difficult to do an honest assessment when it involves looking in a mirror.

Back in post #023 (Work As Usual–Unhealthy Relationships), we noted some Gallup conclusions:

• Managers account for 70% of the variance in worker engagement.
• Businesses pick the wrong managers 82% of the time.
• Untalented managers compensate with manipulation and politics.
• CEO’s actually tend to have the lowest EQ in an organization.

It can also be difficult to get employees to respond honestly about problems if responses are being returned to management.  The greater the assurance of anonymity, the higher the likelihood of an honest assessment.

“Understand Your Real Culture” can benefit from a third-party assistance.  For example, the Connection Culture Group offers an assessment tool they call the Connection Culture Pulse that can be used to assess the culture within organizations and teams.  The Best Christian Workplaces Institute also offers various assessment tools and services.

As suggested above, the best place to start is with an honest assessment, but culture in an organization is an ever-changing reality that must be cultivated and curated.  It is growing and evolving even if management does nothing about it–in fact, it grows and evolves BECAUSE management does nothing about it. Regular “check-ups” is a wise way to keep things healthy.  Back to Gerstner:

Don’t misconstrue my message: Creating expectations and communicating goals is a worthy and important responsibility of corporate leaders. But if these are not followed up on by a comprehensive and continual assessment of the alignment of all major corporate processes with those goals, the leaders will be listening to the sound of one hand clapping.

Courageous Action

An honest assessment of the real culture is just the first step in bringing the real culture of an organization in line with its Re-Imagined Culture.  Re-alignment may require courageous action, prayerfully taking steps to bring the real culture back in alignment with Biblical beliefs, principles and priorities.

Are the Bank of America leaders willing to discipline or terminate some of its most productive senior bankers to protect its junior bankers and send a message about the kind of culture it wants to cultivate. Remember Proverbs 29:19 (NIV)–“servants cannot be corrected by mere words; though they understand, they will not respond.”

Author and marketing guru Seth Godin addressed the difficult personnel choices that must be made when cultivating culture.

The attitudes you put up with will become the attitudes of your entire organization. Over time, every organization becomes what is tolerated.  If you reward a cynic merely because he got something done, you’ve made it clear to everyone else that cynicism is okay. If you overlook the person who is hiding mistakes because his productivity is high, then you are rewarding obfuscation and stealth.  People are watching you. They’re not listening to your words as much as they’re seeking to understand where the boundaries and the guard rails lie, because they’ve learned from experience that people who do what gets rewarded, get rewarded. 

Lou Gerstner identifies compensation, performance measurement and recognition practices as three key areas that may need to be adjusted.

Compensation is one of the most important of these processes. If the reward system pays a premium for one kind of behavior, that’s what will determine employee behavior—regardless of the words enshrined in the value statement. If the financial-reporting system focuses entirely on short-term operating results, that’s what will get priority from employees. If you want employees to care a lot about customers, then customer-satisfaction data should get as prominent a place in the reporting system as sales and profit. Look at who gets the atta-boy and atta-girl treatment at corporate meetings. Is it the leaders in meeting financial targets—or is it those who raise concerns regarding marketing programs that give priority to corporate goals at the expense of true customer needs? It is the cumulative effect of all of these processes: compensation, performance measurement, recognition, etc. that shape what we describe as corporate culture.

Aligning an organizational culture with Biblical beliefs, principles and priorities and a priority of Biblical flourishing is counter-cultural, and counter-cultural actions by a faithful leader require courage and trust.  James Hunter warns:

To enact a vision of human flourishing based in the qualities of life that Jesus modeled will invariably challenge the given structures of the social order. In this light, there is no true leadership without putting at risk one’s time, wealth, reputation, and position.

Leading faithfully through business a better way toward Biblical flourishing in the face of risks and resistance requires faith, and faith requires trust in God’s sovereignty and God’s promises, such as the promise in Matthew 6:33, “But seek first the kingdom of God and his righteousness and all these things will be added to you.

As we wrap up our discussion of real culture vs stated culture, we will leave you with a reflection on “faith” by our friend, Dr. Skip Moen. For faithful leaders wondering if they really even need to incur the risk of leading with faithful integrity through business a better way toward Biblical flourishing, it is a reminder of the difference between stated faith and real faith.

Faith is my active attitude of total reliance on God’s absolute trustworthiness.  That means that my “faith” is demonstrated in the action of putting myself in His care, no matter what the circumstances!  Until and unless I act on His reliability, I just don’t have faith.  I might have a set of written beliefs that I can recite, but I won’t have any active relationship.  Faith is only found in the action, not the declaration. . . . If faith is the action of trusting Him, then I either act or I don’t act.  I either trust Him, or I try my own way.  There is no half-full measure here.

PERSONAL NOTE (from PM):  In a play on the saying “Culture eats strategy for breakfast“, the title of Lou Gerstner’s article is “The Culture Ate Our Corporate Reputation“.  In my experience, many businesses today care about their reputation–particularly on social media, but they do little to keep their culture from eating it.  I was having a difficult time with an insurance claim, with no one returning my calls for weeks.  One post on Facebook describing the debacle and suddenly they were interested in being (or at least appearing) responsive.  It would be so much better if they fixed their real customer service culture to align with what they advertise.  Based on the responses to my post as well as conversations with others in the industry, their once stellar corporate reputation is sadly being “eaten”.

On an even more personal note, let me share a tidbit about Gerstner.  I didn’t know Gerstner, but we shared the same barber–Emil.  Emil ran a barber shop in the offices of Ogilvy, the ad agency, which was in the same building as the law firm for which I worked.  Emil was personally recruited to Ogilvy by David Ogilvy and cut his hair for decades. When Ogilvy brought him in, part of the deal was that Emil could have outside customers.  He cut my hair for almost 20 years.  Emil’s shop was a small, windowless room hidden around a corner from the Ogilvy cafeteria with just a small sign on the door that said “Barber”.  Emil had a number of clients who were high-profile CEO’s, bankers and lawyers, including Lou Gerstner.  Emil always started early, but on days when Gerstner was coming in, Emil would arrive very early (commuting in from Westchester) to open in time for Gerstner to get a haircut before being driven to IBM’s offices in Armonk, NY.  Emil never gossiped or shared anything about his clients.  Emil didn’t advertise.  His reputation was all he needed.  He only cut men’s hair.  Appointments were every 30 minutes, and if you were late, he would not even start on your hair.  You were expected to pay for the appointment.  I think his grace period was one missed appointment.  After that, Emil was no longer your barber.  Whether or not you liked it, Emil’s real culture aligned with his stated culture.

ESSENCE: Regardless of what is posted on a website or promulgated in policies as an organization’s formal purpose, values and culture, stakeholders will experience, and respond to, what they perceive to be the real purpose, values and culture of the organization.  A recent news story exposed real culture seemingly out of alignment with stated culture at a major financial institution. Aligning the real culture of an organization pursuing faithful integrity toward Biblical flourishing with its Re-Imagined Culture requires prayer, courage, trust, humility and planning on the part of its faithful leaders, but it is a critical step on the path to leading with faithful integrity through business a better way.  The first step in that alignment is undertaking an honest assessment of the organization’s current real culture, including assessing what people perceive to be its real purpose, values and culture, the assumptions and motivations that underpin its policies and practices, and the real WHY behind its purpose, values and culture. The next step may require courageous action, prayerfully trusting in God’s sovereignty and promises and taking what could be counter-cultural steps to bring the real culture back in alignment with biblical beliefs, principles and priorities.

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