I just finished reading Corporate Culture: The Ultimate Strategic Asset by Eric Flamholtz and Yvonne Randle. The book is based on the premise that company culture is a critically important yet often uncredited driver of success and failure, even correlating to financial performance. And, like other aspects of modern corporations, culture requires active management. Companies with great cultures don't get there by accident. The book is a worthwhile read for those with an interest in general management and the implications of culture for mid-sized to large companies.*
The book defines corporate culture as the "values, beliefs, and norms that influence the thoughts and actions (behavior) of people in organizations." The connection between cultural attributes and actions made me think about applying the concepts of culture directly to digital intelligence. Why is culture important in the context of digital intelligence? Because simply hiring people or implementing technology isn't enough to achieve digital intelligence proficiency. I see proof of this on a daily basis as I work with clients who struggle with digital intelligence despite substantial investments in the best technologies and most talented teams. These organizations have many of the individual pieces but cannot put the puzzle together. Culture is the connective tissue that binds technology, people, and action together.
To take the idea a bit further, let's look at the five key components of corporate culture according to the book and their digital intelligence implications:
Chris and I recently published a report describing how to build risk and compliance principles into your company’s corporate culture. As we worked to finalize, edit, and publish the report, a flurry of new corporate scandals emerged, all related to this topic.
Here are just a few of them:
Wal-Mart executives accused of trying to hush up bribery cases in Mexico (article here).
A whistleblower accuses Infosys of engaging in a systematic practice of visa fraud (article here).
A former Goldman Sachs employee writes an op-ed for the New York Times blasting the company’s ethics (article here).
JP Morgan suffers a $2 billion trading loss due to “poorly monitored” trades (article here).