What We Can Learn From the Euro-Zone Meltdown

What is culture?  It has been defined as “what everybody does when the boss isn’t looking.” It is the attitudes and behaviors that will happen by default unless there is an intentional effort to produce the culture you want.

It is so powerful that it dictates how your organization will behave.  How powerful is it?  We can see how powerful it is by looking at the crisis occurring in Europe.

The nations using the euro (i.e. the Eurozone), are flirting with financial disaster.  There is an International Monetary Fund whose main purpose is to help the seventeen countries in the Eurozone survive financial catastrophes.  In the face of Europe’s financial woes, why don’t they just do what the U.S. did?

The U.S. made a decision to recapitalize the banks and buy subprime loans to the tune of billions of dollars.  As a result, a banking collapse was prevented—some think even a depression.  Yes, there have been a lot of criticisms and continuing questions.  The point I’m making is that action was taken.  So why not take the same action in the Eurozone?

The U.S. has one administration to deal with.  In Europe there is not one administration.  There are seventeen!  Germany could perhaps play that role, but why would they risk their wealth for countries with different missions and cultures?  It takes more than a monetary system to unite an organization, let alone a conglomerate of countries.  So in America, when we talk about kicking the can down the road, in Europe they are talking about kicking seventeen different looking cans down the road. Germany’s can is different than Italy’s can, which is different from Greece’s can.  You get the picture.

The U.S. and the Eurozone’s problems on the surface resemble each other.  But when you get different countries with different languages and different cultures, you have just increased the issues, interests, and priorities exponentially.

Can you imagine Henry Paulson trying to convince seventeen different congressional bodies to shore up one overall system?  It would be almost impossible to get them on the same page.  He would need to learn several more languages, and more importantly, immerse himself in seventeen different cultures.  The task of intentionally developing one overall strategy that the seventeen “departments” would buy into would be daunting.

His challenge?  Spanish banking priorities are different than Greece’s, which in turn are different than Italy’s, which in turn are different than Germany’s, etc.  The strategy can be one that is best for all.  But a similar strategy is not the solution.  Why?  Culture always eats strategy for lunch.  Culture is so strong that it will override any strategy to right the European ship.

What does this say about an organization?  Although not as complicated, culture in your organization is a strong current that must be acknowledged if strategy is to prevail.  I’ve seen organizations from mergers and acquisitions with two or more different cultures that were never acknowledged. It’s not uncommon for cultural pockets to develop from department to department.  It might not be as complicated as the Eurozone dilemma, but the same principle applies. Troubled waters are guaranteed.

Mission, vision, and values are important.  They are also more obvious than your culture.  The key is to acknowledge culture’s importance by being aware of its power to create atmospheric conditions and impact direction.  Only then can you be intentional about creating the quality of air you want your organization to breath.

Is your culture a trusting culture?  Is it an appreciative culture?  Is it a culture of fear and mistrust?  Does it reflect a scarcity mentality or an abundance mentality?  If your organization is not intentional about this, your culture will develop its own current by default.  Make sure your culture is the one you want.

The B.L.U.F. (Bottom Line Up Front)?  The desired direction of your organization will be hindered or helped by the current in the river—your culture.  The current is strong and powerful, therefore it must be recognized for what it is.

Few senior leaders have successfully lead a cultural change effort.  One reason is because not many have experience it themselves.

The intentional effort cannot be overstated.  Clarity and accountability for values and performance is the only way to effect a cultural change.  There must be:

(1) An awareness of where the culture is.  This involves rock-bottom honest truth. If there is an undercurrent of fear, then bring it to the surface.  Don’t deny it.  Instead make the awareness of it your ally. Acknowledging it is the first step to changing it.  In fact, by the time you state the obvious, change has already begun.

(2) The stated values of where you want the culture to be.  Do you want a culture of trust; an appreciative culture; an innovative culture; a supportive culture?

(3) A measure that is expected of everyone.  In other words, what are some tangible behaviors that would help define the kind of culture you want?

Does your organization clearly define the values that create your desired culture?

How are your people demonstrating the behaviors that define those stated values?

How are those behaviors reinforced?

What have you found helpful in your organization?  Share it with us.

(Mick Ukleja is the co-author of the book Managing the Millennials: Discover the Core Competencies for Managing Today’s Workforce)