The
corner office in the corporate world has always been a place to aspire for. The
key decision-makers of an organization or C- suite professionals are usually
found to occupy those spaces. The corner offices are lavishly designed to
complement the corporate status of an individual spearheading most of the
important programs in the organization. Individuals sitting in corner offices
are said to have earned the space through demonstration of extraordinary
qualities in successfully managing organizations. These people give a direction
to their respective organizations and shape their future. They are the
linchpins in organizational growth and prosperity and are involved in designing
key corporate strategies.
However,
the journey of an individual to such corner offices is not merely based on any
domain expertise but an exceptional quality in fathoming an appropriate
cultural setup that would be foundational to all other organizational
activities.
In 2018, a survey conducted by Hired, a
digital marketplace for technology-related roles, revealed results that were
apparently surprising but, rationally, an outcome of consistent cultural
leadership. The survey was carried out among tech workers in the US with an
intent to know which company they would most like to work for. The company
which outranked all others in this race was Netflix, beating technology
goliath, such as, Google, Tesla, and Apple.
It
is not that Netflix has managed to be an aspirational employer only, but, right
from the Wall Street to users and critics, all love and admire the streaming
platform. The company has not only managed to sail through four existentially
threatening industry shifts, but rather, has successfully pivoted each time and
defined a new approach to value creation. From mailing DVDs to streaming movies
over the internet, from distributing content created by others to creating
original content of its own, from being an American company to a globally
recognized and loved platform across 190 countries, every time it was a pearl
of collective wisdom which turned out to be relevant and precise.
However,
this creative competence and agility, providing a sustainable competitive
advantage to Netflix, is not an outcome of mere hiring the best in the Silicon
Valley and retaining them through attractive ESOPs, but creating a culture of
trust, honesty, and candor. Reed Hastings, the co-founder of Netflix, learned
the cultural lesson while managing his previous company, Pure software,
before Netflix. Pure software was conceived and started with all great
intentions in 1991, as a process-driven company, but the processes eventually
morphed into rigid protocols thereby, making the company increasingly efficient
and decreasingly creative. Unable to cope with the market shift, the company
was eventually sold to its competitor in 1997.
With
his experience in failing to save his former company, Pure Software,
Reed realized that he fundamentally failed in creating “psychological safety”
in the organization. Psychological safety, as succinctly described by
Harvard Professor, Amy Edmondson, in her book, The Fearless Organization,
is a state of creative comfort. She elaborates that psychological safety is
said to be existing in an organization where people feel safe to dream, speak
up and take risks without any fear of being subjected to punitive action
because of insubordination. It is the primary role of individuals in C- Suite
occupying corner offices to ensure that an enabling culture exists in the
organization.
The
term culture is probably the most abused word in the corporate world
today and in the past. As narrated by Erin Meyer, Professor of INSEAD Business
School, “corporate culture can be a mushy marshland of vague language and
incomplete, ambiguous definitions. Company values as articulated in golden
words, rarely match the way people actually behave. The catchy slogans in
annual reports and website often turn out to be empty words.”
A
very familiar American company called Enron, for a long time, had been boasting
of its lofty organizational values such as integrity, respect and excellence,
which eventually became a great mockery when the enterprise was caught in one
of history’s biggest cases of corporate fraud and corruption.
Another
great American bank, Wells Fargo, created a history in banking fraud when its
five thousand and three hundred employees were booked for opening over three
and a half million fake bank accounts between 2011 to 2016.
There
are myriad such cases of corporate hypocrisy and ethical fading which have made
people cynical about enterprises and their genuine commitment towards people
and the planet. The triple bottom line (people, planet and profit)
is said to have received a lot of symbolic support and less pragmatic. This, in
turn, have a direct impact on the top and bottom line of an organization and
eventually, the life span. It is pretty evident from a McKinsey study, which
reveals that the average life span of S&P 500 company has drastically
fallen from sixty-one years in 1950 to merely eighteen years today.
Individuals
occupying corner offices have either constructed or destructed an organization.
The way the constructors have built enterprises with their exceptional
cognizance of culture and its components which drives creativity and
innovation, in the same analogy, the destructors have ended up into debacle
because of their myopic perception and vision about organization culture.
When
Satya Nadella assumed his role as the CEO of Microsoft in 2014, it was testing
time for the company and for him as well. Microsoft had developed complacency
inside the organization and hence, lost its race for smartphone and partially, could
lose on computing too. An MP3 player called Zune, which was primarily
launched to compete with Apple’s iPod, also failed. Many people who had been at
the company from early days lamented a loss of inspiration, imagination and
innovation, as illuminated by Author Simon Sinek, in his book, The Infinite Game.
Trust and cooperation suffered as internal product groups started fighting with
each other instead of supporting each other. The internal culture turned into
bureaucratic shackles that unintentionally rewarded managers who stifle
innovative ideas that might threaten the existing status quo. For example, Ray
Ozzie was incubating a highly secretive cloud infrastructure project in
Microsoft under servers and tools division, way back in 2008, with the code
name Red Dog. But the leadership team was unable to unshackle their
decisional biases which supported the legacy business of Microsoft, like Office
and Windows. Frustrated with the apathy of Microsoft’s then leadership towards
new and innovative ideas, Ray Ozzie decided to depart. It was, however, a
serendipity that Satya was asked by Steve Ballmer to lead the server and tools
division of Microsoft where project Red dog was incubated. As a
predecessor, Ballmer advised Satya to always remember the 3Cs of innovation
culture namely, Concept i.e., the potential product, Capabilities i.e.
the resources and skills required to develop the product, and the most
important, Culture, that embraces new concepts and new capabilities and
doesn’t strangulate them.
As
elaborated by Satya Nadella in his book, Hit Refresh, that the ‘C’ in
CEO stands for culture. What he did as a CEO of Microsoft is what he
calls Cultural Renaissance. The renaissance is about inducing and bringing
a paradigm shift in the way people think, organize and collaborate in the
organization. He believes that innovation and competition do not respect our
silos, our organization boundaries, so we need to learn and transcend those
barriers. Trust in others is equally important as trust in oneself.
Collaboration and openness in communication is the key to innovation in today’s
world. There are no boundaries for value creation today, an enterprise may need
to collaborate with its customers and even competitors.
Finally,
as Satya says, “Culture can be a vague, amorphous term. That’s why we work
so carefully to define the culture we wanted.”
Written By:
Dr. Mrinmoy Bhattacharjee
Alliance School of Business
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