Culture
Measuring a persons potential by how well they "fit" the corporate culture is a common practice in the Corporatist environment. A far cry from just getting along or working well with others, cultural fit has become an exclusionary filter, which diminishes the essential dynamic that makes organizations functional.

Many people leave organizations because they don't "fit", but what does this mean? Is this the fault of the worker or because organizations don't have wide enough bandwidths to allow for diverse styles and approaches? Anyway, shouldn't an individual's competence be the measure of their value?

"They're not a good fit" has become the most common reason for termination of not promoting people. The problem with "fit", especially when culture is used, as the qualifier is that it is an individual decision as to who fits. Lack of "fit" need only be identified by one manager who does "fit" for an employee to be black balled. This kind of environment is fertile ground for personal vendettas.

Terminations rarely occur because of an individual's ability to do their job. Most people are fired for political reasons. The stronger the culture in an organization, the more restrictive its requirements for inclusion. There is less room for diversity of; thought, opinion, personal style or approaches to problem solving.

What is culture? Why should inclusion in it be a criterion for employment or consideration for promotion? Furthermore, what is the impact of this type of subjective measure on the survival of competency?

According to Webster, culture is, "The training and development of the mind, the refinement of taste and manners acquired by such training, the social and religious structures and intellectual and artistic manifestations, etc. that characterize a society." There are numerous people and long years of history that define the culture of a society. Organizations however exist over short periods of time: the largest, according to studies, last about 40 years. Very large organizations, those with more than a few thousand employees, are few. So what is the basis for establishing a "culture" in an organization?

Even the largest organizations develop styles of culture over short periods of time. The Nixon administration, which lasted less than two terms in office, has been characterized as "paranoid", Wall Street as "greedy" and the entertainment industry as "inbred".

Compared to national cultures, organizational cultures take relatively little time and significantly less history to characterize. They are almost never characterized by self-definition. Instead outside observers reserve this right. Is an organization likely to express an objective measure of itself using insiders working with such nominal parameters? Most culture statements are descriptions of what organizations would like to be - but usually are not.

Is it any wonder that culture can easily become something perverse, when it is controlled by so few people and implemented over such short periods of time? Is the average organization in a position to promote a culture? By what justification do executives and their staffers have the right to determine what constitutes culture? What is the basis for prescribing behavior, in the work place, beyond commonly acceptable standards like: hard work, civility, competence, contribution of value or support of the organization's goals? Do organizations or individuals even have the right to suggest how people should behave individually?

In an article from Sales and Marketing Magazine, October 1994, author Brian Silverman reviews a book titled A Nation of Salesmen, by Earl Shorris. Silverman says that this book,

Asserts that America's sales-driven society undermines our culture and morality.

Some of those America behold as heroes for being great sales people, represent the code of homo vendens, which holds that selling is beyond judgment, ruled by no moral law.

Do these sound like the type of people we want determining the culture we must subscribe to in order to remain fully employed?

Some other examples of culture:

On a television program, broadcast on October 4, 1996, sports commentator, John Nyland said, "If you prosecuted everybody in the NFL who abused alcohol, drugs or loved ones, you couldn't field a team." In America, the NFL probably has more followers than Jesus Christ. Does this behavioral phenomenon, common to professional sports, constitute an acceptable code of behavior for anyone?

Radio broadcast personality, Howard Stern made a classic comment when he said that his definition of culture is: "Anything goes!"

In the book, Built To Last by James C. Collins and Jerry I. Porras the subject of "visionary organizations" is discussed. The book discusses how core values and organizational culture is a common thread among successful companies. What "successful" means, is left to the reader. Apparently it has something to do with name recognition.

One of the examples used is that in some companies, nicknames are applied to employees like, "Nordies" for Nordstrom employees. This is supposed to be a complement, but the authors go on to explain that although cult like companies don't bow down to their leaders, they do bow down to their cultures. One of the examples they mention, however, is Eugene F. McDonald, Jr., the head of Zenith. When he died, Zenith "never regained the energy and spark he provided". Am I missing something? Apparently the "culture" McDonald promoted was not self-sustaining.

What the strongest cultures promote is a phenomena called, "Groupthink". Groupthink was originally hypothesized by psychologist Irving L. Janis in 1971. In a study by Kirby Timmons from USC, of the film "Challenger" by George Englund, "Groupthink" was blamed for the January 1986, Challenger disaster. Here are the symptoms of Groupthink:

• Illusion of invulnerability - immunity from error
• Belief in inherent morality - ignoring ethical and moral consequences of decisions
• Rationalization - down play of information conflicting with group opinions
• Stereotypes of outsiders - lack of receptivity to valid criticism from legitimate sources
• Self censorship - devaluation of individual ideas when they are in conflict with known group values
• Direct pressure - ridicule when individual opinion deviates from group norm or consensus
• Mind guard - repression of evidence or expressing doubt to preserve group complacency
• Illusion of unanimity - discord not tolerated

The Challenger program allowed no room for failure. It was so bent on creating the illusion that failure was impossible, that it took a disaster to prove the fallacy of this attitude. Many organizations redefine failure to mean success in order to preserve the image of their culture.

Culture often goes beyond the individual organization to impact entire industries. When new theories hit the market, companies flock to them, because they lack the self-assurance to see them as ancillary to their own proven strategies.

On of the latest crazes popularized by Geoffrey Moore's best sellers, Crossing the Chasm and Inside the Tornado have caused a furor in the high tech industry. The majority of high tech companies have adopted these works as their culture. They have become "Chasm" or "Tornado" companies, not ever stopping to think what this means to them as individual organizations. They are so eager to be included, they overlook the value of incorporating Moore's insights into already successful business practices, rather than letting them completely change their operational approach.

Organizational culture is based on having things in common with the group, but it really doesn't address the issue of competency at all. Organizations have replaced the requirement for competency with the need to "fit in", and created environment that stifles individual creativity and diversity in the workplace. They have taken advantage of the greed of their own employees to buy their cooperation with these inane and arbitrary guidelines.

Competency
The word competent means, "having the necessary quality or skills". It says nothing about how these skills fit in a group. It simply means that an individual has the skills to perform a task.

Where does competence fit within the Corporatist world of organizational culture? Competence is difficult enough to measure when using an objective standard. It is meaningless when "fitting in" is a prerequisite to being measured. How is a standard established for one criteria, like competence, when the control group is hand picked for an unrelated characteristic like conformity?

Manage means to, 'exercise control over, to influence (someone) so that the person being managed, does as one wishes, to use economically and with forethought, to succeed in accomplishing or handling'. In other words, managing is the ability to get things done through others by directing them toward the achievement of a common task or purpose.

Managers who are competent have the ability to get things done through others. If they don't accomplish their function, then the organization doesn't accomplish its function. As a result, the objectives and eventual survival of the entity is threatened. Managers should be held accountable for the productivity of their workers, not their ability to" fit in" or to teach others to do so.

Managers need to know how to set people up to succeed and how to develop and motivate them towards that goal. Their own success is measured by the success of those who they enable. This is a criteria for management competence.

Managers don't benefit organizations when they devote their time to excluding those, who could make a contribution, by applying the yardstick of culture. Managers ought to be skilled enough to see past various styles and approaches and identify individual potential. This is what they get paid to do. Unfortunately, organizational culture has obscured the management function so severely, that many in these positions, no longer even understand their basic role or objectives.

Overall success of the organization is directly proportional to the success of each manager and worker. If workers and managers succeed, so will the organization. It is the responsibility of managers to facilitate the success of workers. If an organization is failing, it is because management has failed to enable their workers to succeed.

Many organizations succeed, despite poor management, as a result of short-term momentum. Over time, however, poor management will breed either failure or, at best, mediocrity. To avoid these consequences, organizations must see to it that management evolves, not disappears. In addition to insuring that basic competencies are being developed, organizations must see to it that professional development is implemented which addresses contemporary legal and social issues. They must become better at managing, and teaching managers how to leverage diversity. Managers don't need to spend their time explaining to their employees the importance of "fitting in".

In the book, Built To Last, the authors suggest that vision is about the organization, not its assets:
Paul Galvin, Motorola's founder, didn't dream about making battery eliminators for radios, its first product. He dreamed foremost about building a great and lasting company. He did that by developing people. He encouraged dissent, discussion, and disagreement, and he gave people freedom to make contributions. He set challenges and gave people responsibility to achieve them.

Organizations live or die based on the ability and competence of its management and workers to accomplish strategic objectives. The success of an organization is based on the success of its workers. The success of its workers is dependent on the ability of management to help them achieve it.

If the success of an individual is dependent on their political skills or ability to "fit" into the organization, then they will devote their time to doing this, in order to get ahead. The consequences will be that instead of producing results, the organization will be a bunch of highly compatible unemployed people.

Like the prophet said, "where there is no vision the people perish". There is nothing wrong with having common goals and a common vision of accomplishment. But, when "fitting in" replaces competency, organizations begin to fail. The reason there is more acquisition and merger activity than ever before in history, is not that the market is good. The reason is that organizations are running out of the competence it takes to manage their own businesses.

Organizations that want to succeed must allow competency to rule over culture. Abandoning the comfort of culture will be too painful for some, but this trend is unhealthy and counter productive. Cultures become decadent when too many people are too much alike and agreement becomes the rule of inclusion. Organizations that succeed will do so because of competence and diversity, not culture.

Culture, Values and the Need for More Management

At a professional development seminar, I once observed CEO's from some of America's largest corporations arrogantly discussing the importance of organizational "culture" and "values" for employees. They made it sound as if these elements of the organization should be the workers all consuming passion: as if their culture and values were something pure; a set of ethical guidelines that all people should live by. They were clearly implying that culture and values were what made organizations worthy human institutions.

There is only one culture existent in today's organizations. It is the culture of personal power and private gain. The "me first" generation has come to power and they are defining culture in terms of what's in it for them. The power of knowledge has been replaced by political influence. It's easy for those who have their golden parachute, to discuss the necessity of culture and values for others.

This "feather your own nest" attitude, however, has resulted in a management crisis for organizations. Many organizations, today, do not have the competence to adequately manage their own enterprises and this is a fatal flaw. These organizations will not be saved by culture or values. The belief that they will, is a primary tenet of Corporatism; but; this is merely fodder for the workers who will not retire comfortable and affluent at the age of 40.

What do workers get from a focus on culture and values?

The courageous Steve Bilko, founder and leader of South Africa's Black Consciousness Movement until his death in 1977, received an apology from a senior Physician, the head of pharmacology at Cape Town University. The problem was that the apology was given in 1997.

What does the personal wealth of executives mean to workers and investors?

In June of 1997, Michael Eisner was "showered with boos and catcalls" by shareholders at a Disney annual meeting, when the subject of his several hundred million dollar pay package came up. Do you think the renown Disney "culture" will sustain all of its workers as well?

When will organization's realize that rich and powerful executives who live privileged existences, are in no position to judge what is best for those who work for them or, for that matter, those who use their goods and services?

What is the long-term benefit for organizations that help create disproportionate wealth for a few individuals, many of who don't even share the risk of ownership?

In June of 1997, Steve Jobs, the innovative founder of Apple was asked, by the struggling entity, to relinquish his 1.5 million shares of the company, which he acquired when he sold them NeXT Software. Why would Apple want Jobs out? Did they realize something about his involvement that was different than when he was their entrepreneurial leader? Perhaps Jobs definition of culture has not been as profitable for them as it has for him.

The practice of promoting organizational culture and values is no substitute for good management or for adequate and proportionate rewards for all those who make contributions of value. Culture and values has become a catalyst for the exclusion of those who think or act differently. These exclusions are often enforced by those who temporarily hold power in an organization and are using that power for their own personal gain.

Most organizational culture and value statements tend to diminish the importance of individual initiative and promote the principle that the most important thing a worker can do for the organization is to "fit in". Many executives employ the use of culture and values, simply as a way of minimizing diversity. What most executives want is to prevent anybody from making waves while they are becoming vested. Concern beyond this time frame is not on their list of priorities.

The documentation of organizational culture and values is really a way of establishing what is considered politically correct by a particular group in power at a given period in time. It is the temporary power elite's way of controlling the environment. This may mean that the organization will have to vest a few workers too; but, since the money is not coming out of the executives' pocket, it doesn't really matter.

Organizations with strong "cultures" often say that they put their employees first, but in many of the same organizations; no career path exists and top management is hired from the outside. The best they can offer is an impotent Human Resources function to represent workers. But these aren't even the biggest problems with organizations, which emphasize culture and values.

The biggest problem with these organizations is that they have adopted culture and values as a substitute for developing competent management. Those at the top believe that culture and values will provide the necessary motivation and direction to attract and keep good workers, including those in middle and upper management. This is Corporatist arrogance.

In a culture rich, Corporatist environment, people with styles that are not perceived to fit the organizational mold are passed over, regardless of their potential for contributing value. The job of upper management is that of gatekeeper. They protect executives from being exposed to any kind of diversity. They also restrict access to organizational leaders and act as filters for new ideas.

Upper management gets a share of the spoils. Substantive management development ceases to occur. Everybody invests their time, trying to get admitted to the inner circle. Middle management becomes disempowered and workers stop getting the direction and motivation to make a meaningful long-term contribution. They settle for survival and a few stock options. Politics and patronage replace competency and achievement.

Preventing the proliferation of this kind of environment is the responsibility of executive management and ownership. They must stop living in the ivory tower and focus on making opportunity available to all those who have the motivation and competence to make significant contributions. When they don't, organizations die.

Executives should not be members of a power elite class. They should provide the vision to build great organizations that are great places to work, because they offer every worker the opportunity to excel. Culture and values should not be the executive's legacy. Their legacy should be a great organization whose workers have reason to be enthused about the future.

The culture of organizations should be descriptive not prescriptive. The minute a pattern of behavior is prescribed, it precludes thinking or acting outside of what is, at that point, defined as the acceptable norm. This is not conducive to developing managers or workers, capable of doing extraordinary things.

It's the mavericks in organizations that come up with the most unique ideas. In fact, many successful organizations were started by mavericks who felt stifled as workers or managers elsewhere. Unfortunately, many of the same mavericks are overcome by Corporatist influences the minute they taste power. They begin to believe that anybody who doesn't do things their way belongs to another, less worthy class. They often become the worst proponents of Corporatism demanding that those who want to succeed in their organizations; dress alike, talk alike, practice the company sport, adopt their same sense of what is politically correct and become their clones.

If managers are expected to enable others to be their best, how can they do so within the confines of strict codes of behavior dictated by an organization's culture or values, which are directly contradictory to the promotion of individual initiative? By the way, organizations that state in their cultures that they encourage mavericks are usually the worst at accepting them. Ultimately, prescriptive culture and values will cause the organization to lose its creative dynamic.

It's all right to expect ethical standards from employees but to prescribe patterns of behavior is dehumanizing. Such an environment is no place for high levels of human satisfaction. Besides, if an employee has no better source for ethics than their place of employment, the organization would probably be better off without them.

One of the phenomena of Corporatism, resulting from their emphasis on culture and values, is the belief that organizations can be effectively run with fewer managers being responsible for greater numbers of workers. This is like saying that you can beat an opposing team, which possesses equal or better skills, by fielding fewer players. It is simply not a credible hypothesis. "Do more with less" may be a sound economic principle, but there is a point of diminishing returns and competent management in organizations has reached that point.

Not only are managers becoming less effective, by virtue of the sheer numbers of workers they are expected to manage, they have also become the victims of culture and values. They are absolved of accountability by being taught to evaluate performance based solely on the view that a prescribed pattern of required behavior is sufficient to determine a colleague's value to the organization.

Managers must have the skills to supervise a diverse work force, if they are expected to enable the productivity of people with different styles and approaches. Not only must they have the genuine skills to manage such a work force, they must not be prevented from performing this task by being given too many workers or direct reports.

An interesting trend in Corporatist organizations is that while middle managers are given more people to supervise, upper management and executives are significantly reducing their number of direct reports. The logic of this practice is so flawed, it is intuitive to even the most inexperienced student of management. Why would mangers that are paid less and responsible for less be required to supervise more people? If executives are so valuable, wouldn't their direct contact with more people increase their value to the enterprise?

Take away the requirement for upper management to spend time coaching workers and middle managers and it leaves them with a lot of time on their hands. Now they don't have to spend all that time managing, so, most of them use that time figuring out other ways to engage in activities that are self-promoting. The unfortunate result of the Corporatist culture is that the higher people go in an organization, the less they have to do. Responsibility is defined by patronage, not skill. Middle management carries the burden of productivity without the authority or rewards for making it happen.

Organizations must stop encouraging managers to default to culture as a behavioral standard and require them to learn how to manage the real organizational diversity of varying styles and approaches. Managers must be promoted and rewarded for their ability to enable others to become more productive. They must be accountable to provide the motivation for people to succeed. This is an entirely human enterprise.

Prophets of the technological age have suggested that managers should be responsible for additional numbers of workers. Historically, it has been believed that good managers were capable of managing 5-10 direct reports. Technocrats tell us that today's managers should be capable of supervising 15-30 direct reports. This is a case of "Do more with less" run amuck. This ratio is unrealistic.

Executives don't have that many direct reports, despite the fact that their function is higher in the organization and ostensibly requires greater skill. Most managers are not competent to handle what they have now. How could they possibly handle more? In addition, organizations are not investing the resources necessary to increase management competence. "Do more with less" for the Corporatist means, "You do more and the organization will do less for you".

These same pundits are touting technology as the way to fill the void left by having fewer managers. What these geniuses don't seem to realize is these tools of technology will not do the job for them. They are only tools. The fact is that more managers with greater skill are required in a technology driven world.

An independent survey is a good way to begin to assess the effectiveness of management. It would be interesting to compare such a survey today with a similar instrument from five or ten years back. This would establish if the trend toward fewer managers has created an improved work environment or better organizational results.

If you want to find out who is a good teacher, ask the students. If you want to find out who is a good spouse, ask the other spouse. If you want to find out whether management is doing their job, ask the people who work for them. Would such a comparison, completed by workers, indicate that, in the last decade, management has become a refuge for non-productive workers with good political skills or a haven for the highly competent?

Organizational culture and values are promoted most ardently by Corporatists who want everyone to have an equal disadvantage when competing for resources, recognition and promotions, which they claim by entitlement. In point of fact, it is very difficult to make it into the upper echelon of an organization even for these aspirants, but it is such a compelling motivation for them, they will do anything to get it, including creating barriers for others.

Conformity to organizational culture and values is particularly important to those who lack competency, as it equalizes the playing field for them and often creates advantages over those who have the required skills but lack political acumen.

Organizations, which allow such practices, should institute recognition programs based on individual initiative, contribution of business value and measurable demonstration of competency. Otherwise, over time, the organization will breed mediocrity through conformity to its culture and values and eventually lose its competitive spirit both internally and externally.

The Corporatist response to less competent management has been to postpone the development of better management and charge ahead promoting culture and values as a substitute for management's inability to impact organizational effectiveness. Managers, in fact, have increasingly fewer of the necessary "soft skills" required to perform their task. The result is that there are now many more mangers with functional skills that lack the ability to motivate or enable the achievement of common objectives by their own workers.

The concept of "functional managers" (i.e. managers who supervise functions) has resulted from this type of Corporatist influence. Answer this question: How does a manager manage sales, finance, technology, manufacturing, distribution, personnel or any other function of the organization without managing people? Unfortunately, this simple point has been lost by Corporatists. There is a reason that the generic word "man" is the first syllable of the word manager. It implies that people are the object of the Management function.

The answer to this predicament is not fewer managers, but more managers. The solution is not more or less technology, but greater competency. Technology makes things happen faster, which requires those who manage today have greater skill. The ranks of management should be a growth area for organizations, not a depleted resource or group replaced by value documents, technology or under funded worker empowerment programs.

Organizational culture and values are not a substitute for managers with skill anymore than technology. The solution of too few and lesser-qualified managers is not working. Organizations who believe this myth, need only to look at the accelerating wake of mergers, acquisitions, business failures and the fluctuating valuation of public and private companies, to understand why this is such a futile and inept response. They must wake up to this fact and start reinvesting in realistic management strategies based on the development of competence for greater numbers of managers.

The organization's budget for management development should be among their highest priorities. Organizations cannot have too many truly competent managers and they are much better off, having good managers than strong culture or organizational values. Values are established by good management in the practices demonstrated and promoted by their own skills and competence. Organizations who spend their resources developing good managers will truly achieve the positive, ethical environment they have tried, but failed to impose, through pronouncements of culture of value.

The Results of Putting Politics Before Competence

The most obvious symptom of Corporatism in an organization is the existence of a highly political environment. Corporatists are experts at creating environments in which:

• Access to top management is blocked
• Patronage replaces competency as the means for getting ahead
• The spoils of short-term success are distributed among only the ruling elite
• Communication is non existent
• Workers are treated as expendable commodities
• More time is focused on internal politics than business objectives
• Success is temporarily re-defined to accommodate the beliefs and behaviors of a few at the top

In this type of environment, workers and managers, alike, are forced to compete for membership in the "inner circle", rather than expecting promotion through competence. The worker's energy is channeled in an effort to be included rather than to achieve. The organization suffers because, without achievement, their long-term objectives, including survival, are not vigorously pursued.

Here's the kind of performance that is common in such environments.

A Dateline broadcast on July 14, 1998 studied the case of a city in the northeast, which was denying acceptance to the police force of candidates who scored too high on the qualification exam. There was no evidence that these "smart" candidates would be any less effective in the job.

Management had simply decided that the police force would be better off if officers had median IQ's

City management's theory was that cops who were too smart would get bored and quit. There was no evidence to support this claim. The Police Association's opinion was that you couldn't be too smart for the job. But what do they know?

The City Manager actually made the statement that they have a bright and productive police department. The most telling piece of evidence was that he was stupid enough to go on national TV and defend this policy making himself and his municipality looks like fools.

This is the kind of competence the Corporatist environment breeds. The bigger question is however: How do people with such obvious deficiencies attain high positions? You're probably beginning to follow the trail. Politics breeds incompetence. After all, politicians and their appointees aren't exactly our best and brightest, but they do have power and influence.

The lust for individual power and influence is not exclusive to the world of politics. This passion is shared by many in both the public and private sectors; it's more important than organizational objectives, people or corporate achievement. Who really suffers, though when this type of environment is permitted to flourish?

At the end of World War II, George Patton, popularized as one of the most politically incorrect people of all time, proposed arming the Germans and "pushing the Bolsheviks back into Russia where they belong." It was competent thinking, even though the idea was very unpopular. As Patton said, "Why not do it now, while we have the army here to do it with?" Patton was quickly removed from power following the end of the War, but not because of his ideas. It was because he was not a political insider.

One result of the political solution that followed World War II was appeasement of the Russian allies, which resulted in the establishment of the Iron Curtain. Massive human potential was held hostage for a generation, while the rest of the free world went passively on, making huge profits and creating great power and influence for those who had sacrificed these Eastern European souls at the altar of political expediency. Was this any better than what the enemies of freedom had done during the War?

Was the job unfinished? "Politicians", Patton said, "always leave us with another war to fight!" History was re-directed, following WWII, as soon as power was consolidated. Short-term political objectives became primary. Doing the right thing, for the long term, suffered the fate of political trade offs. Short-term issues like, who "fits" in the new order, took priority and the importance of the world outside of this new political hierarchy, diminished.

The Allied Expeditionary Force's objective in 1944 was the liberation of Europe. How can the creation of the Iron Curtain possibly be reconciled with this objective? The only justification for such a shortsighted solution is that the definition of success was modified to accommodate personal and political objectives.

Organized crime has proven that ethical behavior is not a requirement for financial success; but what is the unseen toll on the human spirit when greed and the lust for power reigns supreme? Only time reveals the damage resulting from preventing the opportunity to pursue individual initiative.

If national and international entities, with all their resources could not more adequately address these human problems, how can any single organization? What beliefs are demonstrated for succeeding generations when political power is more important than character, competence or the freedom to fulfill human potential?

Charles A. Reich of Yale Law School said, "The Corporation is an immensely powerful machine, ordered, legalistic, rational, yet utterly out of human control, wholly and perfectly indifferent to any human value".

Political and business systems present some remarkable contrasts; but how different are they in today's environment?

In a workshop at a professional conference, in February, 1995, two discussion questions were asked, to which some of the responses were as follows:

What are the symptoms that Politics exist in your organization?
• Poor communication
• Absence of time management
• Meeting mania
• Constant change
• Personal agendas

What are the effects of politics on organizations?
Positive
• Structure
• Defines success
• Provides a model for behavior

Negative
• Loss of focus on organizational goals
• Good people leave
• Manipulative environment

Why do organizations build political models to produce business results? The answer is that organizations, especially business organizations produce lucrative personal advantages for those who are politically astute. Is leadership that relies on the ability to be politically astute in the best interest of long-term survival or success of the organization?

One of the major results of too much politics in the work place is a trend toward greater legalism. Legalism embodies many principles that are contrary to running successful businesses, like:

• Risk avoidance
• Compliance with established practices and codes
• Defense of guilty clients
• Fees based on protection against potential loss

Customers want something different from this set of operating standards:

• Joint risk
• New ideas
• Common sense
• Genuine care and concern

In a cover article for Fortune (November 14, 1994), called "Why Companies Fail", author Kenneth Labich identifies six commonalties of failed companies. He says that the overall cause of failure is inept management. The six sub categories are:

• Executives don't understand the fundamentals of their business
• Shortsighted management
• Debt
• Inability to develop new strategies
• Losing touch with the customer
• Friction between management and workers, especially when management preaches one thing and practices another

Labich points out many of the same things that Corporatists promote as key characteristics of a failure scenario. One of the elements is that new ideas don't reach the top. Another is the vision that an organization must take into account the future, as well as the past, and that vision must change from time to time. For example: the shift from print publishing versus electronic publishing caught many organizations off guard. Debt due to excessive acquisition and merger activity. And the classic, "we must know what we're doing" syndrome characterized by management that provides politically correct rhetoric as the reason for short term achievements, but doesn't really know why the organization is successful.

The down side of "we must know what we're doing" is apparent in Wall Street fund management. Fund management has become a haven for this type of behavior. It's, "The market, the market and the market". I thought these guys were supposed to be able to out smart the market? Surely they could do better than, "We lost only 20% and the market lost 30%, therefore we are successful". Talk about re-defining success. Does Wall Street really want to stake their case on a "losing less" strategy? Maybe the system isn't allowing people to rise to the top who could beat the market?

Perhaps there is some historical basis for the short term thinking of Corporatism. In a presentation to a conference of Sales and Marketing Professionals, in December of 1994, Stan Davis, co-author of The Monster Under The Bed, spoke about the evolution of the market economy. Hunting and gathering lasted hundreds of thousands of years. Agriculture ruled for about ten thousand years. The industrial revolution lasted two hundred years followed by the age of technology, only about 50 years. The information age lasted about 20 years. It's over!

The current age of knowledge could be over very quickly for organizations where politics has replaced competence. The first part of this age, all that was known was what we didn't know. But because it's the age of knowledge we will soon be without that excuse. If the knowledge base of organizations has eroded due to the devaluation of human input, knowledge for profit is not a viable concept.

The biggest problem resulting from using the political model to run organizations is that it doesn't work. Why would business, adopt an organizational environment similar to that of government, to which they are diametrically opposed? The only answer is that those who are politically astute, understand the way to personal gain is through the inward focus of political power, whether it be in government or in business.

Results and Alternatives To Resolving The Competence Dilemma

Perhaps the biggest overall result of Corporatism in the work place is that organizations are becoming dysfunctional. They have become unable to objectively deal with their own problems. Here are some examples:

The US. Postal Service publicly claims to have an acceptable safety record despite the fact that they have had several employees murdered by other employees or ex-employees.

Private companies are building incredibly expensive business and industrial equipment that doesn't work. The Hubbell telescope for example.

On September 8, 1995, Investigative Reports broadcast a program called "Cops On The Edge". In the report, they revealed that 11 out of 12 NYPD cops, who committed suicide, had never gone in for psychological evaluations. The reason? Cops said going in for evaluation is a CLM (Career Limiting Move). Instead of changing policy to reward rather than punish those who sought help, a series of films was circulated, encouraging cops to come in that needed help. Without further implementation, however, no improvement resulted.

In most organizations, email and voice mail have replaced interpersonal communication.

Many organizations hire or transfer staff to perform certain tasks, then don't provide resources or budget for the function. In one company, Director level people were assigned responsibility for managing the marketing to various industries. They didn't have budgets. They couldn't travel, sponsor meeting or seminars, advertise or hire administrative help. These Directors were paid six figure incomes, yet were completely stripped of any resources with which they could create impact.

Airlines offer the best deals to those who fly the least.

A judge responsible for a large metropolitan court-building project, decided to eliminate any food service in the building to keep the budget down. This was done despite the fact that hundreds of people work in and use this facility every day.

In a story from the New Zealand Herald, June 17, 1997, an agency "that sent a nurse who murdered an elderly Auckland couple in their home, later billed the estate for nursing services".

An article about telecommunication, published in the November 1997 edition of Direct Magazine stated that: "Placing the burden for success on front-line supervisors is a common mistake". The reason this is done however is that it is more important to have somebody to blame, should problems result. Solving problems is secondary.

Perhaps the worst casualty of the management competency crisis is that management has lost credibility. Like the Royal Dutch Shell study, cited by Senge in The Fifth Discipline, many large companies outgrow the internal ability to react to, and resolve their own problems.

For those who suffer from this phenomenon, the results are disturbing. The alternatives, however are downright undesirable.

Takeovers and mergers are rampant. The worlds largest organizations are dividing up their knowledge bases and their ability to dominate markets because they have adopted short-term solutions rather than long-term strategies. The quickest fix for any organization is to build up short-term profits and sell the company to somebody else.

White collar unions are common place in many parts of the world. The reason unions come into existence is due to a deterioration of the relationship between management and workers. Imagine a union membership that consisted of MBA's. That's what could happen if knowledge workers are pushed too far. Workers are powerful enough to slow or prevent the success of any organization's initiatives. Look at professional athletes. They are some of the highest paid workers in the world and they can cripple an entire sport (industry) simply by not showing up to work. Workers are a formidable force more than powerful enough to lookout for themselves. They are also smart enough to become competitors.

There was an article printed years ago, titled, "The Fastest, Richest Texan Ever". It was a story about a dissatisfied IBM Sales Rep who made his quota for the year in the first quarter. When he was told to sit at his desk and stop being such a standout, he quit and started his own company. In a few years he made over 500 million dollars. The company was EDS. The Sales Rep was Ross Perot.

One of the worst and most subtle alternatives to developing competence is that people and organizations just don't grow. It's not that they don't make money, but their standards are lowered. They stay in business, but (as Peter Senge hypothesized) they never live up to their potential. This is an unacceptable situation in a world where every technological advantage is available for organizations to create outstanding results.

Internal power struggles are created by the competition for resources and power in organizations. Even downsizing is a form of consolidating power by cutting off parts of the organization that don't "fit". Elimination of workers or departments usually has nothing to do with productivity or profit but instead is a result of conflict within the power base. This kind of competition even goes on between management and the work force in an article, "The Smiling Killer"; the author discusses the passive aggressive co-worker or manager:

There's one in every office. A master of intrigue and control. He's resourceful and smart, devious and complicated. He'll act like a team player but covertly undermine the groups efforts. He'll seem to be your buddy, then criticize you behind your back. The guy's basic problem is that he views every relationship as a power struggle, but can't stomach direct confrontation. When this person is the boss, its a big problem: he can do no wrong, and woe to anyone who dares challenge his authority - though he'll never do the actual firing himself.

Internal power struggles can be more devastating than external, for two reasons. First, they are not open to public scrutiny, even in public companies. Secondly, they are not always formal actions. The outsiders in an internal power struggle are often put out to pasture by virtue of their random affiliation with the losing faction. Their group is merged with another, which has greater influence, and the credibility of those being "taken in" becomes suspect.

Poor relations with former employees are another destructive force for organizations. Rumors that abound about people who resign from organizations, especially to start their own businesses, are some of the most viscous weapons of Corporatists. Corporatists like to do this because they are used after the "enemy" has left the field of battle when they are free to attack someone who is defenseless. This results in the inability of the organization to continue to use these vital resources for advice or references.

Spin offs are another alternative to internal reconciliation. A note in the Bottom Line Newsletter, September 1995 said that:

Spins off companies often do well even when they performed poorly as part of larger firm. The reason is that managers no longer take orders from higher ups who do not understand their business.

Out sourcing is becoming an increasingly popular alternative to managing an internal work force. Now there are companies, who take over entire work forces, like one would out source an individual function. Although a valid option, the organization still has to get things done through others, so it does not always solve their problems. Although work force out sourcing is currently popular among organizations of 25 to 100 employees, it's only a matter of time until this blossoming industry designs service packages, which will accommodate larger clients.

For the most part, alternatives to the organization developing internal competence do little to solve the real problem of poor management and a dysfunctional work environment. How much a manager makes in an IPO is not a measure of their competence, yet these managers leave a lasting impression on all who work with them. They also leave the results of their actions with the organization after they leave.

The alternatives to developing internal competence are usually more costly and don't guarantee better results. Poor management however is at least as bad as the alternatives. Organizations must make the investment in developing competence if they want to solve problems rather than merely avoid or postpone them. Otherwise, like the cancer that starts out small, soon the entire organism may develop into an incurable infection.

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