Showing greater respect for company culture could spare chief executives from the kind of speedy ouster Time Inc.'s CEO just received
A couple of weeks ago, Jack Griffin ran out of time. More specifically, he was run out of Time Inc. After less than six months on the job, Griffin was sent packing as chief executive of the magazine publisher in what multiple news reports painted as a culture clash. Despite Griffin's being "extremely accomplished … I concluded that his leadership style and approach did not mesh" with the company, Jeff Bewkes, CEO of parent Time Warner (TWX), told employees. As seen by Peter Drucker (whom, incidentally, the legendary Henry Luce tried unsuccessfully to lure to an editing job at Time in the late 1930s), the mistake that seems to have tripped up Griffin is common among managers. "There is indeed a need to change deeply ingrained habits in a good many organizations," Drucker wrote. But messing with the culture is not the way to get there. "Culture—no matter how defined—is singularly persistent," he explained. "In fact, changing behavior works only if it can be based on the existing 'culture.'" Sometimes companies closely tie culture to the specific business they engage in. "There are substantial internal differences in culture, values, and rhetoric between corporations in different industries," Drucker wrote. "Banks everywhere are very much alike, and so are retailers or manufacturers. But banks everywhere are different from retailers and manufacturers." I've witnessed this in my own career. I've worked for two newspapers—The Wall Street Journal and Los Angeles Times—whose readerships have little in common. Yet both shared a culture familiar across newsrooms (and described by one journalist as akin to that of a brothel, with "short, rushed bouts of really enjoyable activity interspersed with long lazy stretches of gossip, boasting, flirtation, drinking, telephoning, strolling about the corridors, sitting on the corner of desks, planning to start everything tomorrow"). Time's First Outsider CEO
In Griffin's case, it wasn't that he was entirely new to the publishing world. He had overseen the magazine division at Meredith (MDP), which puts out such titles as Better Homes and Gardens, Ladies' Home Journal, and More. But he was distinguished as the first outsider named CEO of Time in the company's history. His predecessor, Ann Moore, had worked there 30 years. From the start, Griffin ruffled his new colleagues. He brought in consultants for certain tasks, a move that longtime employees apparently viewed as an insult. He evidently ordered all the magazines in his portfolio, including Sports Illustrated, People, and Fortune, to place his name atop the staff list; previously, the editors' names had usually gone first. Griffin made some people uneasy by openly referring to his Roman Catholic faith. Others characterized his management style as polarizing. For his part, Griffin has said that his style wasn't an issue. At least one ally has suggested that the real problem was that "entrenched interests" at the company refused to make the changes necessary to prepare for the future. Drucker certainly felt strongly that no organization can afford to stand still for long. He maintained that at some stage, every company must recast its "theory of the business"—its basic assumptions about markets, mission, and core competencies—in order to survive. What's more, Drucker pointed out, in many enterprises "the theory of the business becomes 'culture.'" Still, rather than try to upend the whole shebang, Drucker believed in working within the organization's "specific history and its specific vocabulary." Seek Existing Pockets of Excellence
To do this best, Drucker advised in a 1991 article, first determine what results the organization needs. "The next—and most important—step is not a 'training session' or a management conference, let alone a lecture by the big boss," he wrote. "It is to ask: 'Where within our own system do we do this already?'" According to Drucker, pockets of excellence from which others can learn almost always exist. Among the examples he cited was Marshall Fields of Chicago, "one of the first high-class, big-city department stores to get into trouble, in the 1970s—and one of the first ones to get out of trouble, too." Several successive CEOs, Drucker said, "tried to change the culture—to no avail. Then came a new CEO, who asked: 'What do we have to produce by way of results?' Every one of his store managers knew the answer: 'We have to increase the amount each shopper spends per visit.' Then he asked, 'Do any of our stores actually do this?'" It turned out that three or four of about 30 locations were meeting the objective. "In every single case," Drucker wrote, "these results were achieved not by doing something different but by systematically doing something everyone had known all along should be done, had in the policy manuals, had been preaching—but only the few exceptions had been practicing." From there, it's up to management to ensure that the entire organization pushes in the right direction by continually asking everyone what supervisors are doing to help them concentrate on the desired outcomes, as well as what they're doing to hinder the process. Finally, Drucker counseled, companies must recognize and reward people when they reach their goals. It is then that employees will adjust their behavior, even as they cling steadfastly to their culture.