IT SEEMS THAT THE NEWS AGENDA IS DOMINATED BY A CONTINUOUS NARRATIVE OF WRONGDOING AND MALPRACTICE, THAT SUBSEQUENT ATTEMPTS TO COVERUP INEVITABLY EXACERBATE. IN THIS ERA, WHERE ACTION AND DECISION ARE SCRUTINISED, PUBLICISED AND GLOBALISED IN SECONDS, NAVIGATING THROUGH CONTINUOUS TURMOIL, UNDER THE TOUGHEST COMMERCIAL AND ECONOMIC PRESSURES, DEMANDS UNSTINTING ATTENTION TO SOUND AND ACCOUNTABLE CORPORATE PRACTICE, UNDERPINNED BY HONESTY, AND TRANSPARENCY

Culture is often praised for success or blamed for failure, but culture evolves and devolves, subject to the vagaries of internal and external factors. A deeper driver can help keep culture on track and explain both successes and failures. But what causes one business to retain a strong and positive culture and another equally venerable one to devolve? If culture is “the way we do things around here,” the question is “but why do you do things the way you do around here?”

Culture is not an eternal verity. It can evolve and grow stronger or waver and drift, leading to losses in reputation, share value, sales, recruitment and retention and ultimately demise. No culture is perfect, of course and even the most positive corporate environment can’t ensure against bad actors or damaging errors. But what research suggests is that issues ostensibly arising from culture, good or bad, often have roots elsewhere. That’s true for organisations with perceptibly damaged cultures. For example and equally for those whose cultures are highly-regarded. That underlying element, even more fundamental than the beliefs and values posited by Edgar Schein, is what we call whatness or “quiddity”. Quiddity is a set of principles typically first articulated by the founders or early leadership teams, which serves as an anchor to help keep the culture from drifting and devolving, while at the same time powerfully attracting and retaining employees who resonate to those principles and find meaning in being associated with the organisation. Businesses which have a quiddity – a DNA that ultimately comprises and shapes the culture -and importantly, continues to articulate and celebrate it – tends to be not only highly-regarded, but demonstrate sustained success.

A committed outdoorsman at age eight, Yvon Chouinard became a proficient mountaineer, who taught himself blacksmithing so he could produce pitons better than those commercially available. Demand for those $1.50 pitons ultimately led to him founding Patagonia, which manufactures and retails high quality clothing and gear, under a philosophy that respects staff members’ personal lives and where concern for the environment was more central than the profit motive. Indeed, concern for the environment is not just a branding platform for Patagonia, but a fundamental commitment: One percent of annual sales is donated to preservation and restoration of the environment and 70 percent of its products are made from recyclable materials. Its status as a Benefit Corporation (B Corps) legally sustains its social and environmental commitment and it operates a buy-back and refurbishment programme – Worn Wear – which reduces Patagonia’s environmental footprint. It even discourages imprudent purchasing of its own products, such as the eye-catching “Don’t Buy This Jacket” advert. Chouinard’s own love for outdoor recreation defines the Patagonia culture, which allows employee time off for outdoor activities, a practice detailed in his book Let My People Go Surfing. The result of this extraordinary approach is, a $1 billion company, that remains highly successful and pre-pandemic, employee turnover was an extraordinary four percent annually.

In 1864, Dr William Mayo established a private practice in Rochester, Minnesota. His philosophy was, “the needs of the patient come first” – which was hardly unique in medicine – but after his two physician sons joined him, the Mayo Clinic shaped that philosophy and Mayo’s founding principles into a quiddity today accounts for its leadership among all US academic medical centers. Those principles include: Team-based medicine that brings practitioners of all relevant disciplines to pool knowledge for the patient’s benefit and ensures the soundest possible treatment. Patient-appropriate decisions regardless of cost (with the Clinic absorbing non-reimbursable expenses). “Boundarylessness,” which allows medical staff to electronically pool knowledge for both the patient’s benefit and their own professional improvement. Culture-based hiring, which goes beyond skills and experience to determine, via self-selection, that a prospect’s values are consistent with Mayo’s patient-centric culture. Finally, shared governance and physician compensation in salary only, with no financial incentive for unnecessary treatment. However, this doesn’t immunise the organisation from issues – nurses were upset with workload during the pandemic and there is frequent concern over CEO pay – but turnover for all staff remains very low and it retains its apex ranking. If eternal vigilance is the price of liberty, regular storytelling and celebration of an organisation’s quiddity is the price of its being sustainable. When leadership teams are distracted by financial pressures, mergers or acquisitions, shareholder issues, legal and ethical challenges and other problems, it’s hardly surprising that a focus on culture is lost.

While the superficial top layer of culture is what’s most apparent to the public – beer bashes and 24×7 snacks for some start-ups or IBM’s iconic white dress shirts – organisations that have thrived for decades tend to have a set of principles or values that informs their culture. For IBM, it wasn’t the white shirts, but Tom Watson Jr.’s codification of his father’s philosophy, encapsulated as respect for the individual, customer service and excellence. For Hewlett and Packard, it was “the HP way,” – articulated by Bill Hewlett and Dave Packard – and defined before they’d ever developed a product: “We have trust and respect for individuals. We focus on a high level of achievement and contribution. We conduct our business with uncompromising integrity. We achieve our common objectives through teamwork. We encourage flexibility and innovation”. We end where we began insomuch as, businesses can develop their own quiddity by simply asking “why do we do things the way we do around here?” – it’s an exercise that is legitimately part of an HR executive’s portfolio – and if the answer is more fulfilling and more engaging than “to make money,” congratulations.

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