“Culture Eats Strategy for Breakfast”, is Cisco Getting It Right?

 

"Culture eats strategy for breakfast" a remark often attributed to Peter Drucker, is one of those statements that so clearly frames a truth that among others things you wish you had been the one who said it!

These words are so rightly on the mark. Why does it seem that business leaders will to do almost anything BUT heed the reality described in Drucker’s words? The data, the data, the data… over the years the data makes an unequivocal case for the fact that ignoring the gravitational force of culture almost always brings change initiatives to their knees and smothers or slows the ones that do manage to succeed.

 In my post of December 28th I spoke to the issue of control (command culture) as a damper on engagement. Shortly after that post a friend sent me a note suggesting that it was one thing for me to talk about the concept of senior leaders giving up control to get more leadership and engagement throughout an organization and another to provide real examples of how this might all work out if tried.

OK then, let’s talk about examples! In the December 09 issue of the Harvard Business Review on-line magazine an article appears that speaks right to my friend’s suggestion. What could be a more on point title for the article than To Be a Better Leader, Give Up Authority ? The authors, Amar, Hentrich and Hlupic begin with what I believe is a very authentic statement, based on their research,

"Although business thinkers have long proposed that companies can engage workers and stimulate innovation by abdicating control—establishing non-hierarchical teams that focus on various issues and allowing those teams to make most of the company’s decisions—guidance on implementing such a policy is lacking. So is evidence of its consequences. Indeed, companies that actually practice abdication of control are rare.”

Maybe you are like me, maybe not, but I have wondered for years about the pace of the democratization of our places of work or more accurately the non-pace. We, the self-proclaimed democracy loving-est people on the planet seem to enjoy talking about democratic principles in our matters of government but when it comes to our places of work we prefer, put up with, or settle for top-down, functionally oriented, command and control type organizations. Freedom of speech in the workplace, not so much; freedom to act, not unless you run it by the boss first. I do not know a company that I have worked with over the past twenty plus years where within hours of my arrival and encouragement of communication someone hasn’t piped up with the quote of quotes, “If I said that I’d be fired!” In these very same companies, I have heard senior managers lament the lack of passion and innovation from the ranks of non-managers and never make the connection between their complaint and the web of constraints they insist on.

Good for our three guys from the HBR article above. They do provide anecdotal and factual information about two companies they have worked closely with and from their experience; they have concluded this about leadership;

       “Furthermore, we’ve found that contrary to what many CEOs assume, leadership is not really about delegating tasks and monitoring results; it is about imbuing the entire workforce with a sense of responsibility for the business.”

Kudos to the authors for pointing out that this definition of leadership applies mainly to knowledge organizations. This acknowledgment lends itself to the idea that any credible definition of leadership must make accommodations for situation, circumstances, and context.

While this type of research and analysis provides credence to the idea that applications of democratic principles are legitimate and successful in a management context there is still the question of numbers. As the authors state, “…. Indeed, companies that actually practice abdication of control are rare.” True enough, but what about when the company is a tech giant like Cisco? Maybe this one counts for a lot?

In the not too distant past John Chambers, renowned CEO of a company with a $20+ Billion cash cushion observed that the organizational structure and culture that had gotten Cisco to its prominence would very likely not take it to where it wanted to go, among other places the leadership position in Telepresence video.

The move by Chambers to turn over operational control of Cisco to a community of internal leaders using a structure of commitments to mutual success and committees has not necessarily drawn cheers from all quarters (20% of senior leadership has exited since this transition began) but it has drawn a lot of attention and much of it from various media concerns. A November, 2008 article by Ellen McGirt in Fast Company,How Cisco’s CEO John Chambers is Turning the Tech Giant Socialist’ provides a very comprehensive view of the makeover John Chambers seems to have in mind. The article title, using the term "Socialist" is likely a bit inflammatory. However, given the limited experience we have in America of using any participatory management approach I am not surprised that only terms with which we are immediately familiar would be used to describe something we do not know a great deal about.

What I do know is that the Fast Company article continues to draw comment, as recently as January 11, 2010. I find this unusual, there is something very psychologically provocative going on at Cisco. This change is obviously about a lot more than just economics. I also know from perusing various blog sites and reading the business pundits that the jury is still out on whether John Chambers is going to eventually be viewed as this generations Jack Welch. Has Cisco, under the direction of John Chambers found a way to not only keep culture from eating strategy for breakfast but maybe now serve its realization? At the time the article appeared in Fast Company Cisco stock was trading at just over $17/share, last Friday it closed at just over $24. In our copy cat business culture you can bet that if this trend continues John Chambers will have plenty of imitators.

 

 

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