Having been in Russia all week working on a conference for the leaders of a major global business, I have been heartened by the degree to which culture was at the top of the agenda, and just how many of the executive presentations focused on culture as the critical success factor.  

Even an analyst wants a business to have a Soul

This message was reinforced by the two external keynote speakers – a Professor of Competitiveness from IMD and a top analyst from one of the leading investment banks. The IMD Professor’s key message to the 200 leaders present was that in creating competitive edge, the culture of the business is crucial, and in creating the culture, their behaviour as leaders was the single most important element. He said to them “it is not what you say, it’s what you do and more importantly, it’s who you are”. Hearing from a Professor of Competitiveness that authentic leadership is key, was I believe hugely significant.  Even the analyst focused on corporate culture as key in underpinning shareholder value growth, adding that what leaders placed emphasis on, as opposed to what they said, would form the reality of the business culture. Surprising from an analyst? Not as surprising as hearing them say that it was critical that a global corporation had a soul. Given that this analyst cannot presumably put a line called ‘Soul’ onto a spreadsheet, this was a fascinating and in my view totally heartening viewpoint. 

The illusion of control

There is such an emphasis in most corporations on what leaders can see and what they can measure (and therefore give themselves the illusion of control), that to hear an expert on competitiveness and a leading analyst exhorting corporations to be human, and to have a soul, should be shouted from the rooftops. 

83% of mergers fail

A recent Business Week stated that 83% of cross border mergers fail to create shareholder value, with 50% actually destroying it, but that those that focus on cultural integration early on are 26% more likely to succeed. (Ok do the maths, and you’ll find that the statistics for success are still miniscule, but the point remains.)  Global companies have perhaps greater challenges with culture than companies operating within national borders. Handling issues such as differences in language and national cultures, matrix structures, global versus local branding, central services when some regional markets are in decline and some are growing etc etc, are incredibly challenging. So the only answer is for the leaders to work constantly and diligently on the creation and the ongoing maintenance of cultures of trust, openness, accountability, respect and collaboration. 

Soft and fluffy v hard-nosed

If these sound like the ‘soft and fluffy’ bits to you, then you might like to reflect on whether you believe the Professor and the Analyst are ‘soft and fluffy’ too. I would say it would be hard to find two more ‘hard-nosed’ and dispassionate commentators. Let no one persuade you that there is anything soft about creating a culture that ensures growth – nothing soft about creating a culture that saves us from being in the 83% that fail.