One topic that came up a number of times at the National Association of Corporate Directors Corporate Governance Conference was this: How long does it take to change a culture? “Culture” is on the minds of directors and executives, not to mention the press (excuse me, the media, as “press” doesn’t quite capture its production any longer). But back to our subject, changing a culture. Given the meltdown. Given the excesses on a certain street with a bronze bull in the middle of it. Given, given, given…much talk about this at the conference, as per:
On the first night, when Bill George gave his talk, he mentioned having asked IBM’s Sam Palmisano how long it was going to take to transform that company’s culture: Five to seven years, Palmisano reportedly said, which he thought at that time would be the length of his tenure (he's been there seven).
The next morning, CA's (formerly Computer Associates) board chair, Bill McCracken, and its EVP and Chief Administrative Officer, Jim Bryant, presented the complicated story of CA’s return from an accounting scandal so serious that it sent its former CEO to jail. As luck would have it, I happened to sit down next to Patrick Gnazzo, the company’s Chief Compliance Officer, who pointed me toward Martin Biegelman's Building a World-Class Compliance Program, which contains a detailed account of what had happened there.
One intervention that CA used to rebuild confidence and trust, while relatively obvious,
proved extraordinarily helpful: executive coaching. “It really helped us,” said McCracken. “We
had to create the culture of the company in the boardroom. The executive coach
sat down with each of us and asked what each of us wanted to do personally to
change. One of my changes, after 45 yrs in the business, was that for 38 of
those years, I was at the top of a hierarchical organization. Now no one
reports to me and I‘ve had to learn new skills.”
While some on the board initially thought coaching was a bad
idea, ultimately everyone came around as they realized how much their own
internal growth would affect the organizational change required to come back
from scandal. (McCracken quipped that when another board member discussed his own
coaching plan with his wife, she said, “I could have told you that.”)
Northwestern Professor and author Bill White, who chaired this panel, then
addressed the observation that sits as the title of this post: how long does it
take to transform a culture? For CA, the process is taking quite a long time.
“One of the things that comes out when you read the litigation report,” White
said, “is how deep these issues went, how embedded the problems were in so many
levels of the organization. Do you see how long it takes to go down all the
levels?”
CA has roundtables at all levels every year , where the “#1
subject is cross-boundary, cross-functional teamwork,” Bryant
said.
“We’re taking it down through the whole organization,” said McCracken. “And, we’re all saying the same thing.”
