Why Companies Fail?
02/24/04
In Fortune magazine, Ram Charan and Jerry Useem wrote about why companies fail: "It's impossible to monitor the actions of every employee, no matter how many accounting and compliance controls you put in place. But either implicitly or explicitly, a company's cultural code is supposed to equip front-line employees to make the right decisions without supervision. At Salomon Brothers the culture did the opposite. The transgressor was Paul Mozer, a trader, who in February 1991 improperly overbid in auctions of U.S. Treasury bonds. While it was another improper bid on May 22 that finally did him in, the critical event occurred in April, when Salomon Chairman John Gutfreund learned of the February overbid by Mozer and failed to discipline him. Mozer evidently took Gutfreund's lack of action as a green light. Salomon's culture of swashbuckling bravado encouraged risk taking without accountability.... Rotten cultures produce rotten deeds."
I am amazed at the contrast between what I read in the papers daily about leaders and their corporate cultures that have failed and what I have experienced in recent phone interviews with some of America's top CEOs. Culture isn't defined by what you put on the walls or say in large meetings--it is defined by the decisions, large and seemingly small, where those cultural values are tested and reinforced.
Workers don't need suggested policies; they need rock-solid principles they can count on. When those principles are disregarded by leaders or associates, there must be consequences. When those principles are honored and used responsibly, there should be rewards. As a leader, honor is more than a gift you give yourself. When values are clear and are reinforced by upper management, that clarity brings courage to the front lines of true corporate excellence. Don't wait for signs of rotting in your culture; build an accountability culture now.
A PAULSON QUOTE OF THE WEEK
"When values are clear and are reinforced by upper management, that clarity brings courage to the front lines of true corporate excellence." --Terry Paulson, Ph.D.
MONDAY'S MIRTHFUL MOMENT
Today’s mirth comes from Loren Ekroth (www.conversation-matters.com)—SAYINGS ON TEE-SHIRTS! Enjoy:
My husband and I divorced over religious differences. He thought he was God, and I didn't!
It IS as BAD as you think, and they ARE out to get you.
My WILD OATS have turned to SHREDDED WHEAT!
STUPIDITY is NOT a HANDICAP! Park elsewhere!
HECK is where people go who don't believe in GOSH
A PICTURE is worth a 1000 WORDS, but it uses up a 1000 times the memory.
When you keep your eyes open for mirth, you just may find it! Hope this kicks off your morning and helps get your mood adjusted for the week. Now, get busy MAKING CHANGE WORK and have some fun along the way!...