Strictly Business: Corporate culture can nurture or discourage

By Gordon Oliver, Columbian Business Editor



It’s common sport in our world to find someone to blame for whatever goes wrong. We have blogs, comment threats on news articles, and mind-numbing talk shows all focused on finding fault.

So it’s no surprise that such a culture permeates many workplaces. But what’s disturbing is that corporate leaders too often embrace that culture, pitting employees against each other instead of turning them into collaborators who can help the company achieve its goals.

The Wall Street Journal reported last week that Microsoft, based in Redmond, was eliminating a personnel system commonly called “stack” or “forced” ranking. Under that system, managers were required to grade employees against one another and rank them on a scale of one to five.

The cutthroat practice was popularized by General Electric CEO Jack Welch in the 1980s, when it was dubbed “rank and yank” because low-ranking employees often ended up out the door. At Microsoft, the Wall Street Journal reported, employees complained about capricious rankings, power struggles among managers and unhealthy competition among colleagues.

It’s true that some employees don’t have the skills or the drive to do their jobs well.

But what’s often overlooked in our pass-the-buck culture is that the management gurus and corporate captains who embrace practices like forced ranking systems frequently fail to look at themselves. Perhaps its their own inadequate management skills, or the divisive nature of the organizational structures they have embraced, that contribute to the poor performance of employees.

Investors too often look at the short-term bottom line without taking much notice of how a company treats its employees. Then one day it becomes clear that a company has lost its edge to nimble competitors who have the passion to succeed, not because they’ve come out on top in a despised ranking system, but because they love their work.

Corporate success is a well-known enemy of creativity, turning small companies into giants that require structured rules and rewards systems. Hewlett-Packard is a legendary example. Despite the success of its founders in creating a supportive culture dubbed the HP Way that carried the company to great heights, HP has frequently descended into corporate turmoil with bitter board and management feuds.

But small-company culture can be equally corrosive, even if not quite as visible. Secrecy and backstabbing replaces conversation and problem-solving in the smallest of businesses.

The popular management system called lean — created by Toyota for manufacturing efficiencies, but now widely used in professional workplaces — is a healthier management approach. Lean is based on a more positive philosophy about human interactions: instead of trying to find and weed out the weakest link, employees and managers work together to improve workplace efficiencies and nurture creativity.

Bosses might find it easier in the short run to boot the low-performers out the door than to listen to their suggestions. But the wise know that it takes more than top performers to create success, and no amount of fear and finger-pointing will move a company to success.