Corporate culture is not random

In a recent post on Bloomberg View, Matt Levine suggests that perhaps corporate culture is overrated, that the success of a company might be random.

He adds that the CEOs on the cover of business magazines are usually there for one of two reasons: they either lead a hard-charging organization where managers demand the impossible and don’t take no for an answer, resulting in wild success; or they lead the same type of organization resulting in fraud and scandals. Interesting observation, and I would add that many CEOs have been on the cover of magazines for both reasons, albeit at different times.

But I disagree that the outcome is random, or that good outcomes perhaps result from asking for the impossible politely and adding “do it the right way” at the end of the sentence, as Levine suggests.

In my view, the companies who stay out of trouble are the ones who care deeply about how things are done. Managers don’t simply say “do it the right way”, they want to know exactly how success will be achieved. They also care about how people are hired, compensated, promoted and generally treated. They understand that culture is simply an outcome of the processes, whether these processes are written in corporate policies or not. For each process they ask “Can this lead to a bad outcome?”

Some companies understand that how they do things is just as important as what they do.

Some don’t.

It’s not random.

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