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Is Our Corporate Culture Going to Kill Us? April 12, 2009

Posted by wrivkin in Enterprise Architecture & Business Transformation.

One might ask: “Is he going for the sacrosanct?” The answer is:”Yes, because it is not.”  The next question would be: “Why talk about ‘it’ in an Enterprise Architecture blog?” The answer: “Because ‘it’ is where all problems start.

Ten years ago Japan fell into one of the deepest recessions in its history. Its economic growth stopped, the government, corporate, and private finances lay in ruins. Everybody was in overwhelming debt. Interest rates declined to zero, then became negative, but nothing could revive the stagnating economy. Does this resemble anything?

After several years of struggling, the most respectable corporate leaders in Japan had the courage to say that the main reason for this depression was Japanese corporate culture. One should understand the overall Japanese culture, with its admiration for tradition to completely comprehend the bravery and effect of that statement. It was especially astonishing, because before the depression the Japanese corporate culture was considered the model for the rest of the world, the main driver behind Japanese economical success.

These economic leaders (note, that they were not economists but CEOs and Presidents of the largest corporations) named the main disadvantage of their corporate culture as “suppressing innovation”. Any employee in a big corporation, they said, is afraid to come up with new, innovative, but risky idea because he is afraid to “lose face”. So, he prefers to ‘play by the book’ even if it is evident to him that the ‘book’ is obsolete and wrong. Ironically, they proposed the ‘Americanization’ of their corporate culture as the cure.

This is ironic, because during the same time American corporate culture has become more ‘Japanized’ than the Japanese one itself.

The author of this blog has spent more than 25 years in the corporate cultures of three countries from three continents from the junior to the D-level. So, he has enough experience to compare and weigh them.

For the last 15 years, right before my eyes, the American corporate culture turned from ‘somewhat innovation-supportive’ to ‘absolutely loyalty-supportive’. Any innovative (especially managerial or methodological, and to a lesser extent business) idea, even obvious and risk-free, but not coming from the top of a corporation, has begun to be considered as disloyalty and almost as ‘dangerous libertinism’. Once, the author of this blog, serving as a C-level consultant, took some open numbers from his company’s website, made some second-grade arithmetical calculations, and came to some surprising conclusions regarding the company’s business model efficiency. Despite the fact that investigating this efficiency was his declared role and goal, after reporting these conclusions, which would be obvious to any person with two-digit IQ, to his C-level boss, the author was told that he was completely wrong. He asked: How and why? The answer was absolutely Kafkaesque: “because it contradicts to the ideas of the CEO” (!?W.R.) This C-level officer was ready to turn a blind eye to an obvious fault in his Enterprise Business Model just to stay loyal to the CEO. And he put it absolutely frankly, he wasn’t ashamed of it. He was proud like a good soldier, loyal to his general without doubt and against common sense.

At the time, I was stunned.  I never imagined then that this type of ‘good soldier’, so popular in Germany some 80 years ago, exists and shamelessly prospers in corporate America, the citadel of the free thinking! I remember myself thinking: “What is this guy so afraid of? He won’t be sent to a concentration camp or gulag. His life and freedom are not in danger. Is he ready to make a complete imbecile out of himself just to keep his chair? And why is his chair in any danger if what he says is right, important for the company, and lies within his area of responsibility? ”

In the former Soviet Union, during time of state holidays there was a state-imposed tradition of bringing flowers to state monuments. However, if any individual bought flowers and brought them to the same monuments independently, without proper authorization he would be arrested by the KGB and put away. It was because the main principle of the totalitarian regime is: “Every independent, free initiative, even a loyal one, must be suppressed”. This is why they seemed to be so impregnable and this is why one day they just disintegrated into dust.

Once again, the author is far from comparing the totalitarian Soviet social regime with the modern US corporate one. Although, after all, the author is just mortal, he can be mistaken.

It is hard to be mistaken, though, looking at the modern US corporate cemetery. Does anybody still believe that their CXOs are not even ‘divine’ but merely competent? Does anybody agree with this social situation where capitalism has been replaced with ‘corporate socialism’, where upper managers assigned to themselves all the rights of the owners without their obligations? With a situation, where the pilots jump with ‘golden’ parachutes, while the plane with the passengers is about to crash? If one does, then he deserves his fate.

The Soviet Union,  by far the richest country on Earth 90 years ago, fell, unable to withstand the weight of its totalitarian social regime. The US, currently the richest country on Earth, is failing before our eyes, being unable to withstand the weight of its totalitarian ‘corporate socialistic’ regime.

To stay within the proclaimed boundaries of this blog, let us call what we desperately need a Business Transformation.



1. avidtrober - April 13, 2009

Good post.

I’m only a small shop guy. We’ve been fortunate to lead programs Fortune 30 on down, though. Programs where they’re trying to get new technical products out the door. All of the big corps suffer, severely, innovation. Every single one of them offered me a job, but I turned it down b/c it is CXO-down a problem. I don’t agree with the ‘merely competent’ comment, more like ‘merely connected’.

The U.S. is suffering innovation-to-market. To me, what innovation is making it to market is more like a pressure cooker spewing stuff out the seams where it can leak out, the container being heavy marketing, big corp lid on it.

Very good post, though.

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