Dara Khosrowshahi had to move fast to address cultural issues when he became chief executive officer of Uber. (Photographer: Patrick T. Fallon/Bloomberg, Photocredit: © 2019 Bloomberg Finance LP)
© 2019 Bloomberg Finance LP
It is unfortunate that the lengthiest blurb for Kirsty Bashforth’s book Culture Shiftis from Iain Conn, outgoing chief executive of Centrica, the U.K.’s biggest energy supplier. Today, just a week after the book appeared, Conn is prominent in the business pages of newspapers, because of the announcement of his departure from the company best known for owning British Gas. The U.K.’s energy sector is something of a minefield, with companies battling with regulators, politicians and rival businesses in almost equal measure. So there is some sympathy for the view that Conn’s departure is down to the external factors that have buffeted the organisation. But there is also criticism of Conn’s decision, following a strategic review launched soon after he took over as CEO in early 2015, to focus on supposed growth areas, such as selling smart energy technology, while selling businesses that had previously been central to its operations. And then there was the recurring issue of his pay — over the four years since he joined from his post of running refining and marketing operations at BP he earned more than £11 million while cutting jobs and presiding over a slide in the share price. So there might be the odd snigger over his remarks about the importance of culture.
But this should not detract from what is a fascinating and valuable book. Bashforth, chief executive of QuayFive, which advises CEOs on change, organizational culture and leadership, was previously group head of organizational effectiveness at BP. In this role she designed and delivered the shift in the company’s culture in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Given this experience on top of two decades working in various roles with the company around the world, it is hardly surprising that many of the case studies she chooses are from BP. But there are plenty of other examples to help make the case for culture to be taken more seriously than it is. A notable one is the reminder of how the ride hailing business Uber went through a rethink of its culture following a series of legal cases over the employment status of its drivers and the replacement of its co-founder CEO Travis Kalanick by Dara Khosrowshahi. It was, she says, “a prime example” of culture and strategy moving out of step and creating real problems. “An organization needs to focus on how it does business at different stages of its maturity and scale from a cultural, not simply structural standpoint, and that needs planning,” adds Bashforth.
Bashforth does not want to get involved in the debate over whether strategy or culture are more important. She prefers to see them as equals. But she does insist that “culture matters because businesses consist of people, not algorithms (well, for the most part …) and things go wrong or right because of them. Major corporate disasters happen because of human actions, which although sometimes unintentional nonetheless still result in bad outcomes. And on the flip-side, we all know that when a team pulls together, aligns behind a cohesive purpose, clear strategy and consistent ethos, it is one that more often excels.”
“Alignment” is something of a buzzword in business today. But Bashforth points out that, even when talking of aligning purpose with strategy, many organizations ignore culture. This is a mistake, she says, because it is “the final piece in the jigsaw.” Elsewhere, she calls on another topic of the moment — behavioural economics — to make the point that people do not always do what they might be expected to or what is logical. “Accept baggage exists,” she says.
Indeed, it is precisely because culture is so difficult to understand and to describe that there is no one size fits all. Bashforth’s book is a helpful guide for the way that it sprays out snippets of advice for handling specific situations that the reader is convinced the author has experienced. But in the end it all comes down to the assertion that culture should be on the same footing as strategy. So if — as is the case — most organizations have somebody responsible for strategy then why is there not a similar role for culture? “You may not need a full-time air-traffic controller for culture, but I would propose that there is someone who has stewardship and responsibility for ensuring the focus and consistency remains.”