On Friday when the New York Times reported the resignation of Eric Shinseki as secretary of the Department of Veterans Affairs, the article contained this quote from an official who asked for anonymity to be blunt about the challenge of fixing the VA:
“This is going to be a slow grind,” a senior administration official said of the need to overhaul the department. “A lot of the problems, they are not just systemic, but they are chronic. It’s like, roll up your sleeves, start digging into the culture and get rid of people who are impeding necessary change.”
It is the comment about culture that I found so interesting. It could be applied to many organizations which have had significant troubles. It’s not necessarily “the event” that triggers the downfall and the inevitable resignation of the leader. It’s the result of a faulty culture that allows errant behavior to take hold.
Culture Gone Astray Takes Down the Best
Let’s look in our own backyard in Minnesota. Target Corporation and its team members deserve a lot of credit for their incredible, long-term investments in their communities through both financial support and volunteer hours. They are a shining example of how corporate America can make a positive difference in the way we live. Since the holiday security breach (“the event”), the shine is a little less radiant. Target Corporation has suffered sales declines, share price erosion, the resignation of its Chief Information officer and the resignation of its CEO and Chairman of the Board. And now the Wall Street Journal reports that Institutional Shareholder Services, which advises big shareholders how to vote on corporate ballots, called on Target shareholders to oust seven of the company’s 10 directors for not doing enough to ensure Target’s systems were fortified against security threats. These votes will be tallied at the company’s annual meeting set for June 11. More trauma; more drama.
Similar to the VA, it was not “the event” that triggered the stream of disturbances at Target. Dig a little deeper and a culture is revealed that evolved from confident to overly confident into a more dangerous terrain. I worked at Target Corporation in the mid 1980’s, then known as Dayton Hudson Corporation. Even then, the culture at Target Stores was an outlier from the more humble, genteel culture at the department stores and the corporate office. Some say it tipped into arrogance—at least at the leadership level. What Tolstoy said about the danger of arrogance seems to play out: “An arrogant person considers himself perfect. This is the chief harm of arrogance. It interferes with a person’s main task in life—becoming a better person.” Or here in the case of Target, better leaders leading a better company.
The Take Away – An Investment in Culture is Smart Business
Often times executives consider culture irrelevant to the bottom line – not worthy of limited financial resources. In light of the above examples, the ROI on creating and maintaining a healthy culture is tangible. Investing in culture is like an insurance policy. You could roll the dice and take on the risk that nothing adverse will come your way and not make the effort to insure your future. The more astute view is the cost of investing and nurturing an appropriate culture as minute compared to the cost of a major organizational meltdown.
Time will tell how long it will take to fix the VA and rebuild the trust Target build over 52 years. It would have been easier and far more pleasant to keep a closer eye on the culture.