Wake up and smell the coffee on your corporate culture

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In the cupboard on the landing at home sits a rather sad-looking old filter coffee machine. Perhaps you have a similar cupboard yourself, containing other well-intentioned wedding gifts such as the juicer, the bread-maker, the pasta machine and so on.

It turns out that product obsolescence, as experienced chez Stern, is a familiar phenomenon in workplaces all over the world. Filter (or “drip”) coffee makers are on their way out. Individualised “pod” coffee makers – Senseo, Tassimo, Nespresso – are on the way in.

My attention was first drawn to this a few weeks ago by Sam Huleatt, an entrepreneur and blogger (www.leveragingideas.com) based in Washington DC. As Mr Huleatt points out, the communal coffee-maker used to be a place to have a quick chat with colleagues, catch up on news and gossip and generally oil the wheels of the organisation. The filter machines’ jugs encouraged colleagues to drink coffee together. There were “coffee machine moments” long before there were ever “water cooler discussions”.

Today, more and more people make the solitary walk to a machine that will provide them with just one cup of coffee. Or the even longer walk to the local branch of Starbucks. “Gone is the idea of the [coffee] pot designed for a group; gone are many of the corresponding social interactions,” Mr Huleatt wrote.

Microsoft chucked out its filter coffee makers at all its US sites last year, replacing them with a one-cup-at-a-time system. But American workers are increasingly rejecting the in-house option altogether. The National Coffee Association says that, since 2003, there has been a nearly 20 per cent rise in the number of people stepping outside for a more upmarket offering. Meanwhile, in Italy, the home of the barista, some bars and cafes report a fall of almost 25 per cent in espresso sales as “pods” gain popularity in offices, according to the Tea and Coffee Trade Journal.

Why should managers be bothered by any of this? Who cares where staff get their coffee, so long as it helps keep them awake and they are back at their desks working again before too long? Our Washington blogger has already hinted at why this matters. It has to do with workplace culture.

Until recently, when managers heard the word culture, they reached for their sick-bags. Costs, sales and profits did not strike many people as being particularly “cultural” concepts. But listen to what the 1,200 international executives surveyed by the management consultancy Bain have just revealed in its biannual “management tools and trends study”: nine out of 10 say that corporate culture is as important as strategy in achieving business success.

Who your people drink coffee with, and where, is important. You may not think you need to promote the rise of “café society” internally, but a coffee culture could be beneficial – for collaboration, networking, and cross-fertilisation. It is this sort of so-called “soft” issue that has forced its way to the top of management’s agenda.

“Executives would probably not have been nearly as interested in the question of culture 10 years ago, and would certainly not have talked publicly about it,” says Darrell Rigby, a senior partner at Bain and leader of the management tools research since its launch in 1993.

It might come as a bit of a surprise to hear a famously analytical strategy firm talking up the importance of the less tangible (and less easily measurable) aspects of organisational life. But the men in the blue suits are changing their tune. As Ian Davis, global managing partner for McKinsey, wrote in his firm’s quarterly journal last year, leaders have to understand how to use “soft power” if they are to manage complicated social and cultural issues both internally and with the outside world. “In contrast to the ‘hard’ analytical skills and in-depth knowledge that most senior executives possess, these [socio-political] issues require statesmanship and diplomacy, the fostering of relationships with stakeholders, and the nurturing of a company’s reputation,” Mr Davis said.

And when the father of corporate strategy, Michael Porter, can write in the Harvard Business Review, as he did at the end of last year, that businesses should not merely be taking corporate social responsibility seriously as an idea, but embedding it into their strategy to help build a competitive advantage, then the marriage of “soft” and “hard” issues has finally been achieved.

If business leaders are surprised at how significant a role soft cultural issues can play, they shouldn’t be. Over 20 years ago Edgar Schein, the American psychologist, published Organisational Culture and Leadership, which offered a three-tiered analysis of corporate culture, highlighting how its hidden subtleties needed to be understood.

On the surface we find what Schein calls “artifacts” – visible structures and processes that may symbolise what the culture is and how it works, but which may require careful interpretation. In the middle layer are an organisation’s “espoused values” – what people say they believe in (which may or may not reflect the truth). And underlying all these are the taken-for-granted assumptions about corporate culture, the huge base of the iceberg, which is not visible from the executive suite. Culture is as slippery and sharp as ice too. It is not to be trifled with.

As Lynda Gratton has just shown in her new book Hot Spots, without skilful management and an understanding of culture, creativity and innovation will be stifled. There will be no “co-operative mindsets”, no “boundary spanning”, just the “dehydrated talk of dead conversations”. Sorry about this, but as far as culture is concerned, it really is time to wake up and smell...well, you know.

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