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Resources Home > Resources > SIM News - March/April 2005 > Features

Overview
MISQ
Executive
SIM News -
MarchApril
2005
From the
President's
Desk
Features
What's Corporate vs. IT Culture and the Influence of the IT Executive
New
Worth
Reading By Steven Pfrenzinger
Chapter
Chat This report is divided into two sections; the first section is focused on defining culture and the second is focused on understanding it within an
Don't
Forget
IT organization as communicated by interviews with numerous successful IT executives.
What Do
You Definition
Think? So what is culture? The subject of culture and "collective belief systems" in general, and the behavior it influences, has created centuries of
APC Papers
Library
debate among the great philosophers and theorists. It has also become a topic of interest more recently among management experts
Multimedia exploring organizational culture in numerous books.
Education
Legislative The experts say you can't really "see" culture; only the behavior it produces. If you can't see the core culture other than the words and
Advisory
Year-To-Date
symbols on paper (e.g., "our goal is excellence in engineering or outstanding customer service"), how does it ultimately influence behavior?
Advisory Pt. Well, it's accomplished through "interpretation," as we'll hear. In our interview with Bruce Nordstrom, the Chairman of Nordstrom, Inc., he
2 said, "Our vision for the company from the beginning was customer service. Our employee handbook starts with the words, 'our number one
SIM News goal is outstanding customer service,' and that really is our culture." If the vision for Nordstrom is customer service, then its culture is really an
Archive extension of that vision.
Online
Collaboration
Speakers So, vision becomes culture and culture becomes what? "Culture is built by experiences that are layered on over time," continued Mr.
Bureau Nordstrom. A culture must be interpreted by the leaders in a company and that will manifest itself into an environment (e.g., a social system)
which creates the desired experiences for its participants. These interpretations change over time, but the core vision and culture seldom do,
if ever. For example, Mr. Nordstrom says, "At Nordstrom the vision and culture are unchanged since founding, but the definition (or
interpretation) of 'customer service' is very different today than it was 40 years ago; just as it's different in New York than it is in Southern
California."

In summary, the "cultural gap" between vision and behavior breaks down like this:

• Vision (usually from the founders) creates a corporate Culture (reflecting its core values),
• Culture is interpreted by the group's leaders to create an Environment (a social system),
• Environment (and the experiences it produces) influences Behavior over time,
• And, Behavior then produces Results.
As shown in the preceding diagram, there are layers to culture that start at the company's core culture, usually originating from its founders,
and subsequently interpreted and enhanced by executive leaders into the structure, polices, procedures, and even politics of the organization
to create the frontline work environment.

Each executive leader has the ability to directly impact the organization he/she manages through individual interpretations of the company's
core culture. That's where the IT executive comes in. You do have the ability to both interpret the company's culture and enhance it by apply-
ing your own personal management style to gain leverage and productivity within the IT organization that you manage.

Now, let's hear from a number of IT executives on this important subject as they answer related questions about corporate (core) culture and
the more detailed IT cultures they create and manage.

Q: Do you believe that culture is important to an IT organization?

Generally, all of our interviewees agreed that it is important. "Yes, it is important. It has to be a complimentary extension of the company's
core culture," said Dave Watson of Kaiser Permanente Information Technology. Aldo Moreno of Herbalife International added, "Culture
is very important. It has been critical for us to transition from a privately held entity to a public company and keep our distributors as a primary
focus. Our culture in IT supports the company culture, yet we’ve had to build trust and facilitate an enhanced IT culture during the transition."
According to Cameron Cosgrove of Pacific Life, "Culture is very important to us. It defines the attitudes, professionalism, how people work
and how they play, and the way they team together. It can be a company asset, a real competitive advantage."

Q: Who insures that new hires are a cultural fit?

The Human Resources department is often seen as the cultural gatekeepers for most firms. Most agreed that the HR department has the initial
responsibility to ensure cultural fit but that new hires need additional cultural screening and a proper orientation and ongoing experiences to
further support the desired organizational culture. According to Tom Beauchamp of Hot Topic, "Culture is very important to us. We in IT fully
support the core culture of the company in what we do and only add where it is consistent with that culture. The HR organization, in partner-
ship with the hiring manager, insures that new employees are a cultural fit in addition to a technical fit. HR initiates the orientation for new
employees, but it is the line IT leadership's responsibility to reinforce and to insure ongoing cultural support."

Q: What are some typical elements of successful IT cultures that are often added to a company's core culture?
If core cultures and their underlying visions tend to be brief (e.g., Nordstrom's "culture of customer service"), then there is much left to
interpretation (to be added) by company executives to create the day-to-day work environment that actually supports that core culture. As
you reflect on your current IT environment, is it a culture enhanced by trust, by freedom, by innovation, by quality, by openness, by creativity,
or by what?

What has been added in your organization's culture to make it more complete for the frontline work environment and to make it more reflective
of your own personal values? During our many interviews we heard certain words numerous times: "trust", "truth", "respect", and "account-
ability" to mention a few. "Our culture is one of trust. Much of our management has been here since the beginning, in the 1970's. We under-
stand each others' roles and respect each others' areas of responsibilities," said Gene Elias of Quiksilver. Dave Watson added, "We also
implemented a fact-based decision process as part of our IT culture. Logic and truth prevail over emotion. We get the facts, discover the
solutions and then make the decisions."

According to Bob Houghton of Western Digital, "We're a hard drive company that focuses on our quality of engineering and manufacturing.
To this extent, IT has built a culture where the business and engineering trust us to make the decisions to provide the engineers with the best
technical infrastructure. I worked hard to establish this culture of a very sound IT-to-business alignment." Cameron Cosgrove added, "I don't
think my role as an IT leader is separate from the overall corporate culture. There are well-defined core values that cross all levels of the
company. My personal style is to enhance that culture by being direct, talking openly, setting expectations, and defining accountability."

Q: Does your IT culture encourage questioning of the status quo or active debate on the issues?
Soliciting honest feedback from staff members was another cultural enhancement highlighted in our interviews. Bob Spaid of Beckman
Coulter said, "We want our staff to question the status quo. That's the best way to make sure we can continue to improve our performance."
Dominique Chapman of Edwards Lifesciences added, "We have an open culture that has a small company feeling, much like a start-up.
We encourage creative debate." Aldo Moreno said, "Yes, we want our staff to challenge the status quo. I set the strategic direction for IT
and challenge them to assess whether what they're doing today is aligned with that strategy. I encourage them to question and raise any
issues during meetings."

Q: Have you ever had to blend two different cultures together? If so, what did you learn?
This question created some interesting discussion and observations as to the size of the organizations being merged and the cultural impact.
According to Terry Burnett of Wellpoint Health Networks, "As companies grow through acquisition, culture plays an even more critical role,
especially where organizations are of comparable size. I believe it is essential to understand the respective cultural tenets that would be
synergistic with the other. As the new culture is defined, it should embody those cultural components that the employee base of both com-
panies will resonate with."

The creation of a new culture also seems likely when the acquiring company is larger than the one being acquired. Tom Peck of NBC/
Universal says, "Blending two distinct corporate and IT cultures together usually results in the creation of a new and separate culture, even
when the acquiring company is significantly larger than the one being acquired. The best advice here is to make changes slowly, listen,
observe, and build rapport and credibility wherever you can during the process." Blending two IT organizations together includes more than
the culture. George Suda (previously) of Apria Healthcare added, "It's not easy to blend together the elements of two companies that are
roughly the same size. Neither has a dominant role. It's like a 'cook off' between cultures, systems and people. The result is often the selection
of an existing element, when the right answer is sometimes a completely new one."

Q: How do you know when it's working?

When a culture works for a company, you don't think about it much; you leave it alone. When it's comfortable and it works, people just do their
jobs and get things done; often with a smile on their face. This appears to happen most often when management has been with a company
for a long time and the group culture is engrained in the environment and the management respects it and each other. A point made earlier
and reinforced now by Gene Elias, "Much of our management team has been here since the beginning, and that has allowed us to maintain
the same culture from the beginning, one where the individual and the family come first." But, even in well-functioning, well-entrenched cultures
there are things to look out for. Rich Hoffman of Hyundai Motors added, "Even if the culture is stable, the employee vs. contractor ratio (for
example) can negatively impact the company and the IT culture because outside workers may not be a good cultural fit."

Q: But, what if the culture is not working?

What if a changing competitive environment requires dramatic change and the frontline culture won't support it? Deeply engrained cultures
take time to change, and some may not allow for change. Bob Spaid says, "The existing IT culture is often the problem. Culture can be your
biggest enemy when it comes to change. We've had to create a cultural model to support rapid change." "It can take two to three years to
make significant changes in an IT culture," added Rich Hoffman.

Q: Is your core culture well documented?

One of the first things we learned is that the interpretations of culture in most companies are not well documented. Those words that are at
the core of a company's cultural beliefs seem to be few and far between, often only a few sentences, but are usually well known. The more
detailed interpretations are not. You don't often hear people say, "Here, read this. It's our culture." They may say, "Here, read this employee
manual for an overview of our policies and procedures." And, that manual was likely created by those in HR that have tried to interpret the
company's culture into a set of rules and guidelines that will govern the organization and create its underlying social system. Tom
Beauchamp continued, "There's no specific culture document, but there are 'key tenets' that are well known and that guide our efforts."

Often culture is told in a "story" where you hear an underlying theme or basis upon which the company was established and forever destined
to be run a certain way. Maybe you've heard that story or told it to others. It is usually preceded by the question, "what's it like to work here?"
or the statement, "let me tell you about the company." Rich Hoffman says, "Company cultures are distinct, and there is usually a story that
can be told to communicate them effectively."

Q: How well should you know the culture before joining a company?
It would make sense any time you consider joining a new firm to learn as much as possible about their culture; both the high-level company
culture and the day-to-day IT culture left behind by your predecessor. Your initial selection for a job opportunity likely indicated you had a
basic cultural fit (HR would make sure of that, usually). But, culture is a broad subject and seldom well documented. It should be well under-
stood before accessing your ability to survive and prosper in that environment; and your ability to apply your own enhancements (interpreta-
tions) to an established environment. According to George Suda, "Any decision to either join or leave a company would likely include cultural
issues and how they might impact your ability to effectively manage an organization."

Q: Any finals thoughts?

Dominique Chapman says it all, "I think there is an incredible opportunity for IT culture to positively impact the business. If you can get
good processes and the right automation in place, IT can help drive output and profit growth. I see it as the 'gold standard.' It's thrilling to see
it in execution."

Size constraints keep us from documenting all of our findings in this report. But, we tried to focus on the ability of the IT executive to both
extend and enhance the core company culture. It was very clear to us during our interviews that as an IT executive, you are particularly well
positioned to substantially influence the culture of your IT organization and its behavior. And, that influence then extends to the broader com-
pany culture because the information technology you deploy can dramatically transform the way your company conducts its business.

As a final thought on this subject, we'd like to suggest the following: First, make an attempt to better document and communicate the IT
culture that you are trying to create within your organization. Relying on the limited documentation that we saw and the need for repetitive
cultural storytelling caused concern that the IT culture discussed may not be well known or understood by the entire staff within an organiza-
tion. Second, we would suggest that you discuss with your staff what they think is the current culture of the organization. This will either
confirm that it is being communicated and implemented correctly or that more effective communication is necessary.

This documenting and communicating effort is very important because there is a wide "cultural gap" that exists between the company's vision
and the ultimate behavior it needs to produce the desired results. This gap means that many in the organization will have to evolve in their
understanding of the frontline culture and that the IT executive has the greatest opportunity to both educate and lead them in the process.

We offer our thanks to Mr. Nordstrom and the many IT executives that took part in the research that preceded this report.

Steven Pfrenzinger is the President of The Carrera Agency™, the first-ever talent management agency in the IT industry; which represents
senior-level consultants for its clients' critical IT projects. He has spent over three decades in the IT industry. During his career, Pfrenzinger
has been a developer, architect, project manager, independent IT consultant, agent and publicist to top IT executives, independent researcher
and industry analyst, founder of several successful consulting companies, author of dozens of feature articles for major IT publications,
featured speaker at national conferences, and advisor to IT venture capital firms. He can be contacted at
Steven.Pfrenzinger@TheCarreraAgency.com.

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