Insane Corporate Efficiency – part 3

Corporate efficiency is a necessity, but where can we draw the line between sane and insane corporate behavior? Perhaps when the drive for efficiency causes the corporate culture to go insane.

If a corporation does not make a lot more than it spends, it provides no incentive for owners/investors. Breaking even is not an option. To become efficient, corporations organize, which traditionally means creating goals, plans, policies, procedures and a host of things like programs, statistics, and a corporate structure which will keep everything operating properly.

There are hundreds of terms which describe the elements of a corporation and its operation and they all come down to agreements which are codified in some manner. What is not generally understood is that the corporate culture, "the ghost in the machine", is also an agreement, but it is rarely codified. It just grows out of the million and one discussions and interactions that go into creating and mobilizing a company. It is the most important component of any company.

Corporate culture is the spirit of the company, which is why I call it the "ghost in the machine," Like the human spirit, it can’t be seen but it certainly can be felt. Furthermore, like the human spirit, when it is gone, the company is for all practical purposes, dead. There are empty buildings all around the world that stand as mute memorials to vanished corporate cultures.

A corporate culture is the informal set of agreements on how things are done. When the culture is supported by policies, orders, and statistics, etc. which benefit employees as well as management, the culture grows stronger and everyone in the company wins. A sane culture is one which values and supports every part of the organization; it values customers, it values the environment, and it values investors.

In short, a sane corporate culture INCREASES the survival potential of the staff, management, customers, suppliers, the surrounding community, and so forth.

On the other hand, a corporate culture can become insane or be insane from the start. You can have intelligent, caring people forced into insane behavior by irrational organizational patterns and policy changes.

You can tell when the corporate culture has gone insane because it will have multiple agreements opposing each other. Various layers of management will have private agreements to exploit the staff and to protect themselves from exposure. The staff will have agreements to "get even" with management. There will be little agreement on helping customers, because staff and management are busy waging war on each other. What little progress is made occurs during the occasional uneasy peace that is established to handle some crisis or great opportunity.

Such a corporation will not stay afloat forever. Like an ancient galley manned by conscripts, the corporation forges its way through stormy economic seas with top management oblivious to the mutinies being put down daily by middle management.

The corporate culture is sick when separate elements are desperately trying to destroy what they cannot control. You could think of it as a multiple-personality disorder, with interesting overtones of paranoia, insane rage, and despair, whatever. The bottom line as always, is that no one involved is having a good time and customers are getting the shaft. The Dilbert comic strip exploits the absurdities of an insane corporate culture.

The technology for salvaging a sick corporate culture is not generally understood or widely available, so the best approach is to build a rational corporate culture from the very beginning. However, there are companies with corporate cultures worth emulating, so if your company is developing a split personality, it may be time to bring in some experts to help reverse the damage.

In the next post, I will discuss some of the seemingly logical changes that can trigger a breakdown in corporate culture. Your comments are helping to bring more areas into focus. Please keep them coming.

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0 Responses to Insane Corporate Efficiency – part 3

  1. crazyhorse says:

    What about the now common practice to abuse the employees? such as making them work overtime with no pay.

  2. Dear crazyhorse,

    I think I have already beaten that issue to death in these earlier articles about Electronic Arts:

    Electronic Arts – a company you should not work for… and Electronic Arts – corporate insanity on display

    But, I will try giving it another whack for old times sake.

  3. Jay says:

    Your Post reminds me of Stanley Deetz’s Critical Theory of Communication Approach to Organizations. Deetz suggests that the current system of managerialism (“I’m right, you’re wrong – and I’m going to keep you helpless and uniformed for your paycheque”) is broken and that a much better move would be to expand the list of people who should have a say in how the company is run. Instead of the current model of managers and stockholders having the only input into corporate government, Deetz proposes six groups of stakeholders:

    Investors- who want security of principal and investment growth.

    Workers- who want a reasonable wage, safe working conditions, time with family etc.

    Consumers- who want a good quality product at a fair price.

    Host Communities- who want stable employment, environmental care, and enhancement of quality of family and public life.

    Greater Society and The World Community- who want environmental care, economic stability, and fair treatment of all people.

    Deetz believes (as do I) that it is imperative that all the people who are affected by corporate decisions have a say in how such decisions are made.

    Definitely worth checking out, if you haven’t already. Check out: Stanley Deetz “Transforming Communication, Transforming Business: Building Responsive and Responsible Workplaces” Hampton, Cresskill, NJ, 1995.

  4. Rick Abbott says:

    How does a very large company, who has recently realized that we have gotten fat…course correct?
    —–
    PING:
    TITLE: Insane Small Business Efficiency
    URL: http://workingsolo.blogs.com/working_solo/2005/07/insane_small_bu.html
    IP: 66.151.149.17
    BLOG NAME: Working Solo
    DATE: 07/08/2005 11:39:24 PM
    I wonder if you have been following an interesting series of blogs over at Ripples by David St. Lawrence on Insane Corporate Efficiency. (from part #3) Corporate efficiency is a necessity, but where can we draw the line between sane
    —–
    PING:
    TITLE: Insane Small Business Efficiency
    URL: http://workingsolo.blogs.com/working_solo/2005/07/insane_small_bu.html
    IP: 66.151.149.17
    BLOG NAME: Working Solo
    DATE: 07/06/2005 03:12:31 AM
    I wonder if you have been following an interesting series of blogs over at Ripples by David St. Lawrence on Insane Corporate Efficiency. (from part #3) Corporate efficiency is a necessity, but where can we draw the line between sane

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