Personality-Driven Culture versus Consciously Designed Culture

2006-05-30T18:01:00Z

In last month’s microSOLUTIONS, I introduced you to my newly released book “Driving Excellence.” (Please visit www.DrivingExcellence.biz for more information.) This month, I would like to summarize one chapter of the book and talk about Corporate Cultures. Conventionally, corporate executives have rarely utilized a comprehensive, formalized process to establish a particular culture. Rather, company cultures have typically evolved based on three primary factors: a) the personality traits of the company’s leaders, b) the rules they have imposed, and c) what leaders have truly rewarded—which frequently has contrasted with what they’ve publicly pronounced. I refer to this approach as a personality-driven culture.

Today’s successful companies, on the other hand, are attempting to consciously design and install their desired company culture. They’re not content to just let the culture evolve. However, instituting a highly successful culture entails expertise, an elaborate design process, diligence, nurturing and periodic assessment. We refer to this approach as a consciously designed culture.

Personality-Driven Cultures

Personality-driven cultures tend to fixate on personalities at the expense of developing a sufficient systems orientation. Cultures take on the personalities of their leaders because employees eventually decipher the leaders’ personality characteristics, expectations, and what they reward. The characteristics of personality-driven cultures are as vast as the countless personality traits and the management styles of the leaders.

In innumerable instances, the leader’s personality and management styles have led to terrific cultures. There are countless examples of successful personality-driven cultures. However, in other cases this approach has caused dysfunctional cultures that were disadvantageous to the company’s mission and objectives. We highlight potential shortcomings of personality-driven cultures, setting the rationale for consciously designed cultures.

Personality-driven cultures are inclined to yield more politics. Games of power gaining, blaming, covering one’s backside and protecting knowledge are commonly practiced. Management is apt to concentrate on criticizing people, rather than quietly mounting a campaign to fix the system to prevent future occurrences. Rather than improving the system, management first thinks: “Let’s find the guilty persons and berate or remove them.”

Personality-driven cultures often have trouble keeping the ego “power brokers” and overbearing personalities in check. The company tolerates their irritating ego or belligerence because these individuals possess key knowledge or are high performers. This behavior exists because values such as sharing knowledge, distributing power, teamwork, open and honest communication, systems thinking and excellence in people management are not designed into the “cultural system” and enforced. Further, seldom is there an elaborate cultural system that holds leaders and ego power brokers accountable.

Eventually, employees will curtail their risk taking and will take less initiative because it’s safer and easier to ask the leader or sub-leader what should be done. This directly diminishes the employee empowerment that fuels commitment to continuous improvement. Moreover, it can de-motivate employees, dimming the fire within them to “make a difference.” It fails to develop the judgment, decision making, and problem-solving skills of the subsequent generation of supervisors, managers and executives.

Consciously Designed Cultures

It’s beneficial to formally design and institute a culture customized to satisfy your precise business requirements and management philosophy. Your employees are too critical to the success of the enterprise not to be optimized. Moreover, why not transform them into a competitive advantage? Let your competitors struggle with employees who lack a passion for quality, improvement and customer service. Watch them grapple with inconsistent teamwork, unremarkable performance expectations, moderate job satisfaction and a pervasive employee-versus-management mind-set!

Anytime you intentionally set out to systematically improve a system, the prospects of success increase. This is also true when you consciously design your culture by establishing an Aggregate System, as described in the book. As you identify the various subsystems that influence the establishment of your culture, ensure that they’re integrated into and aligned with the company’s mission, business objectives and values.

When we sat down in 1990 to design Microchip’s culture, our goal was to consciously redesign the entire enterprise. We also wanted to truly align, integrate and unite all company resources within an Aggregate System in which the company culture, systems, practices, policies, employees, strategies, decisions and actions worked in unison to achieve our mission.

Getting your key executives, mangers and employees involved early in the design of the culture will promote buy-in. It’ll assist you with holding people accountable for practicing the values, policies and management style. Employee focus groups are an excellent tool you can use during the design and implementation process. This seeds the employee population with champions and advocates of the culture.

It’s crucial to periodically measure the leaders’ and employees’ adherence to practicing the culture. Since culture is role modeled by the leaders, you need to formally assess the culture so that you can enhance it. Annual anonymous employee surveys are the most effective method for assessing compliance: are you practicing what you preach?

Installing an outstanding culture is often an emotionally taxing process, so remain steadfast. You’ll experience progress and setbacks. Systems that drive human behavior can be complicated and are always dynamic. You seldom get from point “A” to point “B” without facing the unexpected. Reach for perfection in your employees and human systems, but don’t demand it.

Steve Sanghi, Driving Excellence
www.drivingexcellence.biz

Are you curious about Microchip's success?

2006-04-26T18:20:00Z

When I took over as CEO of Microchip Technology in 1990, the Company was in dire straits. It was hemorrhaging money, its technology was outmoded, its factories were inefficient and the employees lacked morale. So many things were wrong with the company that I didn’t know where to start.

A parade of consultants marched through my office offering every kind of cure, from cycle-time reduction to process controls to outsourcing. All of the suggestions were valid, but there was no single cure for what ailed Microchip. I recognized that Microchip required an approach that would improve all aspects of the enterprise and involve every employee in the quest for improvement. But since no one could offer such an approach, it was up to us to develop our own model for reform.

I recruited the help of Michael Jones who was Microchip’s Organizational Development manager and later became VP of Human Resources. We designed, and with the help of Microchip’s outstanding management team, implemented the Aggregate System. The Aggregate System is designed to simultaneously improve all of a company’s business processes by aligning and uniting the processes and elements that lead to success. Rather than focusing solely on the manufacturing processes, business strategies or workforce, the Aggregate System is a big-picture approach that creates an exceptional business culture and a management model that institutionalizes and perpetuates improvement across the entire business.

Today, Microchip is a leader in the semiconductor industry. In the book Driving Excellence, Michael and I provide a practical and prescriptive guide to building a successful corporate culture that explains the origin and proper implementation of the Aggregate System. We relate the story of Microchip and its rebirth; how the Aggregate System works and the ten key elements of it; the foundations of a true values-based corporate culture; and, finally, how you can put it to work in your own organization.

Over the years, many people have asked me how we were able to turn Microchip from a failing spin-off of General Instrument into the success it is today. I am gratified to be able to share the methods we used, and am confident they will be effective for your company.