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Corporate culture the ‘secret sauce’ of success

Beyond Measure
By Margaret Heffernan
(TED Books, 107 pages, $21.99)

We're told that nothing in business is beyond measure. You can't manage what you can't measure, and it's possible to devise metrics to drive efficiency and effectiveness in all aspects of your operations. But Margaret Heffernan, an entrepreneur and former CEO of various companies has a new book provocatively titled Beyond Measure. It's about corporate culture, a vital aspect of your organization that you must manage but can't really measure all that well.

"We measure everything at work except what counts. Numbers are comforting – income, expenditure, productivity, engagement, staff turnover – and create an illusion of control. But when we're confronted with spectacular success or failure, everyone points in the same direction: The culture. Beyond measure and sometimes apparently beyond comprehension, culture has become the secret sauce of organizational life: The thing that makes the difference but for which nobody has the recipe," she writes.

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A paradox of organizational culture, she says, is that it makes a big difference but is the result of small actions, habits, and choices. The behaviour that comprises your organizational culture comes from everywhere – the top and the bottom of the hierarchy, and inside and outside the company. It's chaotic, and emerges of its own volition rather than your brilliant design.

"We may not be able to measure culture but we can measure the high rate of failure for programs aimed at culture change; that stands at around 70 per cent. So the idea emerges that culture is elusive, hard to manage, impossible to command," she says.

It sounds a bit like Dante's Inferno: "Abandon all hope, ye who enter here." But she is more optimistic, and offers lots of ideas. Since culture is a non-linear system, small changes can have big impact. She points to working in groups as a key element of corporate culture but says this is often impaired by the fear that many people have of conflict. Consultant Brooke Deterline told her: "You practise for auditions, for exams, to improve your tennis game. So why wouldn't you practise the kinds of arguments and conflicts that are bound to come up at work?"

Ms. Heffernan stresses the importance of seeking contrary ideas. "If everyone brings the same knowledge, then why have five people in the room when you could just have one?" she asks. "Great thinking partners aren't echo chambers – they bring well-stocked minds, new perspectives, and challenge."

To keep your thinking agile, she suggests using a question that CIA analyst Herb Meyer liked: "What would we see if we were wrong?" When he asked that during the Cold War with the Soviet Union, wondering what he would see if the country was collapsing rather than a strong foe, he found all sorts of information pointing to its breakdown.

She tells us that thinking is physical. So if we're in a thinking job, after 40 hours a week, studies show we're toast. If your culture ignores that reality, your company will suffer.

"What is so striking about over a century's research is that long hours specifically impair the talents we most need in business today: Thinking, insight, problem-solving, sharp analytic and imaginative skills. Distraction and fatigue deeply compromise our ability to test our decisions, reflect, and think again. Without the capacity to doubt, we will never gain the confidence we need to ask hard questions and articulate the values that define us," she observes.

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Harvard professor Leslie Perlow found software engineers' time in a company divided between "real engineering" and "everything else." So she devised a system where three days a week, from morning to noon, quiet time prevailed, and nobody could interrupt anybody else – they did real engineering. Some engineers estimated their productivity increased by as much as 65 per cent. For only the second time in the company's history, a product shipped on time. A small change in the culture, re-engineering time, had a profound impact.

Research has revealed a Pygmalion Effect: If we have high expectations of someone, they will fulfill our belief. She wonders whether nominating someone as "high potential" and giving them special opportunities isn't just a self-fulfilling prophecy. As well, she attacks the forced ranking systems that became the rage for a time and still linger, in which a work force is divided into three camps: The top 10 to 20 per cent who deserve attention, the bottom 10 to 20 per cent (who should be eased out), and all the rest. She says it leaves the huge number of people in the middle group stuck with nobody wanting to mentor them and the feeling that they don't have what it takes to lead others. "Most organizations invest more in rooting out underperformers than in cultivating pervasive achievement," she warns.

That's an instance, of course, where measuring leads to trouble. You need to move beyond measure. It's also an example of her willingness to challenge our thinking. This is a small book in page size and short in length, one of the first efforts in print by the TED folks, but like their tight talks, it's provocative, thoughtful and inspiring.

POSTSCRIPT

Consultant Kerry Patterson weaves together anecdotes from his past to come up with homespun wisdom for today on work and life in The Gray Fedora (Vital Smarts Press, 176 pages, $19.95).

The 40, four-page lessons surprised me at times when I discovered where the story was leading but the message always hit home, although only for a short time – they weren't memorable enough for me to recall a few days later, although perhaps that's because I read it in one sitting.

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The title comes from a story about the day as a youngster he feared his grandfather had died because a man with a grey fedora – the hat his grandpa always wore – was lying unattended in the street. The man turned out to be a wino. The lesson? If he put his grandfather's grey fedora on a stranger, it transformed that individual into someone worthy of his care and attention.

Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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About the Author
Management columnist

Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online column, Power Points. More

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