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Executives that haven't risen through the ranks often search for growth at all costs, but that growth often comes at the expense of corporate culture.Rui Vale de sousa

Robert Pattillo served as chief communications officer at seven major Canadian corporations, including Bank of Nova Scotia through the 1980s. He also served in other roles at Scotiabank in the 2000s and now works as an independent strategist.

Scotiabank’s board of directors surprised both markets and staff last fall by appointing Scott Thomson the bank’s new president and CEO. Mr. Thomson, who most recently had headed a construction-equipment company, had not worked in banking for two decades. Picked over leading internal candidates, his main qualification seemed to be that he had been a board director of the bank since 2016 – but boards aren’t where chief executives traditionally come from.

To many observers, Scotiabank’s decision was a clear signal that it had set aside its cultural tradition of developing executive talent internally, all the way to the top job, through increasingly senior roles. Mr. Thomson’s appointment reflects a change that is increasingly obvious across every industry group.

That change came about after COVID-19 disrupted the workplace, even if its foundations had been forming for some time. It’s the rise of a unique vanity among executives, rooted in the illusion of celebrity and a sense of entitlement that appears to dismiss marketplace sentiment and ignore the legitimate expectations of employees.

While the general public doesn’t often notice that change itself, they do see its effects. Scotiabank’s succession issue draws from the same reserve as the messy firing of CTV’s top anchor, Lisa LaFlamme, in 2022. The same factors may also be behind Telus’s recent decision to charge customers a fee if they choose to pay their bills with credit cards – a move that went against all norms and traditions. Or the inexplicable delay this year by Rogers’ executive management in explaining a massive system outage. We are seeing the diminishing influence of corporate culture.

Companies are attempting to break free from the perceived limitations of past practice and looking at future opportunity differently. But in the mix is also a store-bought confidence that often emboldens senior management to become more transactional. Such executives search for growth at all costs and overlook the value of something important: There is a reason why things have been done a certain way for a long time.

That, in essence, is corporate culture. It is an organization’s lived traditions, the experience they reflect and the guardrails they help build. It is the shared recognition that there is value in what is often intangible: the accumulation of conventions, best practices and lessons learned.

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Some may see corporate culture as a constraint. Some may see it as phony and unduly hampering individual thought. Some may even think of The Office and scoff at its value. But most business strategists still rely on corporate culture to deliver high performance.

When corporate culture declines, we see wrong-headed executives make moves that, while on the surface are not disruptive in the numbers and cents way, invite future consequences because they overlook the value of the intangible, the drum beat that has long coursed through and sustained a company.

We see chief executives appointed inexplicably. We see a network’s image tarnished by a high-profile anchor’s unexpected dismissal – and her replacement facing an uphill battle in the search for comparable audience ratings. We see major telecommunications companies going too far in treating customers like schmoes.

Even if not directly responsible for any of those unfortunate events, the pandemic bears some responsibility because of how it hollowed out the workplace.

As much as staff once looked forward to the team building fostered in the company of colleagues, they have come to realize that they enjoy having time to talk to their neighbours and read to their kids before bed. That is, to be sure, a good thing for many in terms of work-life balance. But now employees only Zoom or come into the shared office on assigned days, and strengthening reliable relationships, and therein the corporate culture that supports them, is becoming more difficult.

The pandemic also allowed c-suites everywhere to hide from employees in a way that severs the head from the body. For those who used to spend time trying to explain change, executive management today appears too quick to blame people rather than its own choices in the face of missed targets and ignored opportunities.

Put simply, the pandemic has caused the relationship today between companies and employees to become more transactional and less familial. Not only is that an issue in itself, it brings about conditions that further exacerbate the situation.

The decline in corporate culture has been a boon for the consulting industry, as increasingly there is little difference – and executives see even less difference – between committed staffers with a stake in the company’s success and one-off mercenaries unfamiliar with a decades-old enterprise and the cultural values that made it great.

Look to Radio-Canada’s recent report on the value of McKinsey & Company’s Canadian government contracts almost doubling every year since the beginning of the pandemic. It’s no doubt a similar situation for companies. McKinsey, Boston Consulting – these are the new hiring halls, filling the seats of executive management with people who are simply passing through.

When Lewis Carroll’s Alice asks the Cheshire Cat, “Would you tell me, please, which way I ought to go from here?” his reply reflects too much time at McKinsey. “That depends a good deal on where you want to get to,” the cat says. Alice’s response could have been written today by any number of new senior executives: “I don’t much care where … as long as I get somewhere.”

Many aspects of corporate culture’s decline may seem inconsequential. The interdepartmental hockey league hasn’t gotten together in two years. The staff association meetings, the baby showers and birthday lunches are unattended. Staff parties have been set aside, mostly. Farewell and congratulatory e-cards are signed electronically.

But the corporate world needs to wake up to the fact that these events matter. A strong corporate culture helps maintain tradition, which protects standards of business practice and risk management. Declining corporate culture reflects indifferent boards, overambitious executives who only care about their personal careers and an ugly hubris that ultimately hurts the bottom line.