Much has been written about cultural change and how much effort – and time – it takes. If we think of culture as a sort of aggregate of the behaviours of a group of people and the values they (claim to) espouse and live by, you can see why the case for the argument is plausible: behavioural change takes longer than process or systems change, as it is human beings that must be changed rather than flow charts, the screens of an interface, or the internal logic of a computer program. None of these things actively resist change, offer an opinion on its impact or offer an emotional or psychological response.
There’s an interesting argument against Artificial Intelligence there somewhere, and one that prompts flashbacks to Hal, the troublesome computer in Space Odyssey. Hal has the binary equivalent of a breakdown when it tries to faithfully complete conflicting tasks, which should provide some kind of lesson to process designers everywhere … In reality – and I nearly typed ‘of course’, but then again … – we are neither controlled by our computers nor driven by icy logic. Well, most of us anyway. (For some disturbing surveys about sociopathy in business, read an earlier blog. Not that we’re excusing anyone …)
We are also, at least reportedly, generally sure that culture and values are the beating heart of our organisations: the core processor, the memory unit that keeps us all functioning. We understand that it eats strategy for breakfast, and we understand it as a collective – and, accordingly, tending to be slow moving. Which makes a recent news story that a colleague flagged up a little perplexing.
Before we go any further, let’s be clear that the company and the individual in question are total strangers to us. We’ve only seen what’s in the press and – lingering as it does – what’s out there on the Internet. But it does seem like an odd example of culture being cited for a decision.
On 17 September, Reckitt Benckiser announced a new CFO as its current postholder, Liz Doherty was standing down. As various commentators – CityAm, The Independent, and the FT among them – noted, what was unusual was the commentary offered by the company, and specifically its CEO, Rakesh Kapoor, in its announcement:
I want to thank Liz for her excellent support over the past two years. She has strengthened our finance function around the world, and has been instrumental in helping to ensure a smooth CEO transition for the business. However, Liz and I have agreed that RB’s and her way of working are not as well matched as either of us would like, and now is the right time for her to move to a new opportunity.”
We can probably credit financial journalists with a greater familiarity with the background than the rest of us – that’s their function, after all. Although, as an uninformed outsider, I can’t tell if the following comment included in The Independent’s report derives from evidence or speculation:
Martin Deboo, an analyst at Investec, said: “In our view Liz Doherty had struggled to win acceptance in the investor community and suffered from being appointed prior to chief executive Rakesh Kapoor’s accession. Reckitt has a distinctive ‘Marmite’ culture that works for some, but not others, in our experience. Ms Doherty’s predecessor, Colin Day, had a highly distinctive, hard-driving style.”
The FT was a little more concrete in its recent coverage:
Ms Doherty raised a few eyebrows with some accounting decisions.
Most notable of these was the inclusion of profits from one-off disposals taken ‘above the line’ – for example, as income earned in the course of its day-to-day business – in the group’s half-year results this summer. Mr Kapoor said at the time that this was normal practice, adding that the £30m involved was barely material.”
As onlookers and newspaper readers, we’re reduced to an amateur version of Midsomer Murders or Lewis here (and without the lugubrious helping presence of a gangly Hathaway), although it sounds like an old-fashioned case of ‘joining the company and leaving the individual’ may be happening. A reporting ‘culture’ that is as heavy on speculation and opinion as fact (not new ground) is also at play: we expect commentary, so we get it.
What’s rather more fascinating is Ms Doherty’s rather short stay at the company, especially when you see what was said in and to the press when she joined, way back in November 2010:
Bart Becht, chief executive of Reckitt, said Ms Doherty “has excellent international, consumer and listed company experience. In addition she is a great cultural fit, showing the focus and drive that Reckitt Benckiser looks for.”
Statements of values and culture are the kinds of things that can come back to haunt anyone (and we really must leave poor Mr Clegg in peace now). Reckitt’s own website, under the heading ‘Ownership’ in its ‘RB core values and culture’ page, proclaims:
We take full responsibility for, and the initiative to do what’s needed in business and in developing and engaging our teams. We attract people with this deep sense of ownership. We are rigorous in following the few but important rules and processes we have. Mostly, however, people are given the latitude to do what they want to, within a framework for success.”
Assuming that this individual’s departure is a simple case of culture clash, we have to assume this could happen to anyone – or to any organisation – that might benefit from paying more attention to ensuring someone really is “a great cultural fit”, or from being more alert to dealing with differences of personal style when they arise.
The first step is to be very clear about your Employee Value Proposition (something we’ve explained before). A candidate who is clear about your values and culture in advance will know more clearly whether your potential offer of a position is going to be a golden slipper or a chaffing diving boot that gives them blisters and bunions. This doesn’t just apply about generic recruitment levels, where the candidates are probably coming to you. It also applies at the most senior levels, where you may be rather more pro-actively headhunting them – albeit probably through proxies.
The second is the selection process. Deploy psychometric tools (taking care to ensure they are administered – and fed back to candidates – by qualified practitioners) to build profiles of candidates. Think about the design of assessment centres: are the scenarios and questions within them designed to illustrate or illuminate candidates’ values and behaviours – and to equally shine a light of your own culture? (The interview and assessment process is a dialogue: the candidate has to be able to find out about you as well as you about them. They are, after all, ultimately the best judge of fit, as they have the evidence of an entire lifetime to base their decision upon. You will be working from a CV, and application form, an interview and possibly some psychometric profiles. A good snapshot, but thinner than a whole album.)
The ever-useful HR Bartender offers advice on Different Types of Job Interviews, including the “Interview with senior management/leadership”. As she comments:
During this interview, the senior leader might have authority either to approve or veto the candidate. In some companies, the senior leader simply wants to know who is being brought on board. They can often be another check of cultural fit and skills match keeping in mind the longer-term vision of the company. The candidate should be prepared to emphasize their past successes impacting money, time and resources. They should also be prepared to ask more strategic questions about the vision and direction of the company.”
Once someone is on-boarded, of course, the metaphorical train needs to keep heading to its agreed destination and its crew needs to work together. There are endless points that could be made here, but let’s focus on two:
Personal styles and preferences are capable of adaptation, and it is part of the hallmark of an excellent leader to be able to flex their personal style to achieve the best possible relationship with and results from those with whom they work. (These other people, of course, are how the desired strategy is achieved, unless the CEO never sleeps and is exceptionally accomplished at IT, Finance, HR, Sales, Manufacturing, R&D …) People who have difficulty working together can be reminded of this constructively, possibly with third party intervention to help them find ways of working together. “I can’t work with X” can be seen as criticism, or as a sign that two people need to do some thinking. And some adjusting. As Reckitt Benckiser’s core values page says:
We treat each other and our differences with a high degree of respect, sharing ideas, failures and successes.”
The other point is mathematics. The COLT and CORT models that Mark Lephere developed for the Chartered Institute of Management Accountants (referenced from an earlier blog post) express the impact of job churn in terms of cold hard cash. Failures to sufficiently recognise the impact of cultural fit during selection and promotion, and situations where personal differences led to departures and replacements are not only sad at a human level: they’re also damned expensive.