Toward Becoming a Great Corporation. Part Four. Changing to a Culture for Greatness

Let’s return to our hypothetical corporation that has turned itself into a lowerarchy, streamlined its operations, and is on the way to changing its culture to one needed if the corporation is to become great as defined in Part One.

The culture of a company is like an autobiography that captures the very essence of the place, its history, its people with their shared beliefs and values, its rituals, its reputation, its formal and informal ways of operating internally and externally, and its outcomes. A company’s culture, whatever its particulars may be, usually affects for the better or worse the company’s internal operations and its overall performance.

There are several changes to be made in the corporation’s culture to compliment the change from a hierarchy and its bottle-neck operations to a lowerarchy and its streamlined operations. These cultural changes are briefly described in this article, the fourth in a five-part series.

From Tight Controls to Structured Flexibility

Structured flexibility means the right balance between too much and too little organization, between two much and too little procedures and their constraints, and between too much and too little policies and how restrictive they are. A hierarchy is synonymous with tight controls (e.g., too many layers and too many compartments that represent too much structure). Most controls are automatically loosened in changing to a lowerarchy, but there will still be a need to replace policies and procedures that straightjacket people with ones reflecting common sense and minimum restrictions.

From Distrust to Guarded Trust

Some workplaces are like prisons, all guard and no trust. Guarded trust is in between prison guarding and unguarded trust, which may be too idealistic even for the most bonded marriages. Corporate performance should modulate how more or less there should be of guarded trust and structured flexibility. For example, both need to be heightened when considering new hires that become part of the new culture and on whom some of the corporation’s performance will be entrusted.

From Organizational Injustice to Justice

An organizational injustice occurs whenever one or more members feel they have not been treated fairly. Examples of organizational injustice include: intimidating workers; boasting about employee assistance programs while minimizing the actual services provided; exempting workers to avoid paying them overtime; union busting; reneging on promises such as pension returns; allowing glaring inequities in compensation; applying double standards in sanctions; showing favoritism in performance appraisals, promotions, and other decisions and subsequent actions involving subordinates; sexually harassing workers; not allowing due process in disciplinary actions; and retaliating against whistleblowers.

From these examples it’s crystal clear that organizational justice is a prerequisite to building a culture, first for humaneness and later on for greatness. It’s thus imperative to scrutinize all existing policies for how well or poorly they satisfy the five conditions of organizational justice, to create compatible policies, and to verify that organizational justice is being practiced.

The five conditions must all exist for organizational justice to exist. Procedural justice exists when the procedures used by the organization to make decisions are judged to be fair. Distributive justice exists when the outcomes of an organization’s decisions are judged to be fair. Interpersonal justice exists when the manner in which people are treated throughout the process of making decisions affecting them is an ethical one. Informational justice exists when the information about the process and outcomes is fully available and when explanations about both process and outcomes are complete, timely, and clear. Retributive justice exists when organizational wrongdoing is penalized as opposed to retributive injustice as in the case of retaliating against insider whistle blowers who validly disclose corporate wrongdoing.

From Top-Down to Democratic Decision Making

In a hierarchy, momentous decisions are unilaterally made at the top, lesser decisions at the middle, still lesser ones if any at the bottom. This descending decision ladder is befitting for a command and control hierarchy but not for an empowering lowerarchy. Democratizing decision making was discussed in Part Two of this series.

From a Subjugating to a Liberating Language

Language can be a very powerful source of power. A Nobel prizewinner in literature, Toni Morrison, has noted an axiom we all know, namely, that words can be used to “sanction ignorance, preserve privilege, and create and perpetuate subjugation.” One of the meanings of subordinate, for instance, is that of being subservient in an inferior way. Or think of other authoritarian and subjugating terms obviously out of place in places full of empowered people, words like boss, order, direct, superior, supervisor, supervise, lines of authority, chain of command, and span of control. Needless to say, those words are hostile to the word, empowerment. The liberating language spoken in a great culture is much different. It takes little if any imagination to think of more liberating and empowering terms, so I will not labor the point further.

Some may think changing a corporate culture is an impossible challenge. Not so at all. Lowering a hierarchy dramatically alters relationships among its people as well as their behavior, and behavioral changes are the key to any changes in the corporate culture. But a culture by itself won’t sustain great behavior unless performance is managed, not mismanaged, the subject of our fifth and last article coming up in a later issue.