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Old Economy Cultures Are Dead Weight in Race for 21st Century Talent

November 30, 2006
How do you define work culture?  How do you know when it is a positive force in your professional environment, enhancing the ability of people to do great work? 

How do you sense when your culture, which silently influences every decision, every relationship, every individual performer, has become dead weight, rather than high-octane fuel? 

What are the warning signs, the canaries singing in the mine that alert you when cultural “oxygen” is getting dangerously low?

I’m thinking a lot about business cultures these days, because my home base is Detroit, the Motor City, the nerve center of the North American Auto Industry.  The once mighty “Big Three” automakers, General Motors, Ford and Chrysler (now part of Daimler Chrysler), are undergoing wrenching downsizing.  

Thousands, many second and third generation employees, have lost their jobs.  Michigan’s economy has nearly been brought to its knees, with the highest unemployment rate (6.9%) in the country.  This reckoning has been coming for years.  Changing leaders never seemed to stem the steady decline.  

Beneath the headlines and short-term restructuring shocks, a silent shift is occurring within these huge companies.  A shift which is a danger signal as disturbing as the quieting of a canary in a mine.

Once proud companies that attracted the best and the brightest to their management ranks, the domestic auto companies are losing today’s talent and the ability to attract tomorrow’s top talent.  Notably, significant numbers of women executives are choosing to leave the industry, as I wrote in an opinion piece for Automotive News (see Oct.  22nd link on website).  Crain’s Detroit Business expanded on the theme this week, “Uncertainty leads to exits . . . execs look for greener pastures” (www.crainsdetroit.com).  

Before I commented publicly on the industry’s loss of women leaders, I spoke to nearly three dozen high-level automotive women, many who have recently left for other industries. Although they prefer not to be quoted publicly, they were quite blunt about the automotive work cultures, telling me:

“Management doesn’t even realize how they self-select people just like them.”

“Male dominated thinking remains at the core of how decisions are made and things get done.”

“It’s a fight every day.”

“The culture doesn’t know how to receive creativity and innovation.  People who try to put it forth have to brace themselves for combat.”

“When times are tough, they are unwilling to take a chance with people.  They stick with their comfort levels, guys who are part of “the team” and operate just like them.”

“It is hard for somebody not like them to have much impact.”

“We’ve really gone backward.”

“The culture is never going to change until significant numbers of women and minorities move into high levels of management.”

“Women know a lost cause when they see it.” 

Survival in the fiercely competitive global auto industry, of course, is Job One.  But right on its heels in urgency is the transformation of these old economy corporate cultures to environments that can effectively attract, develop and retain 21st century talent. 

We all know there’s a talent shortage coming.  A “war” for top talent on the horizon.  But the next generation of emerging leaders, the most diverse the business world has ever seen, won’t settle for static, traditional, homogeneous work cultures.   

Old economy industries, such as the U.S. auto companies, have nearly century-old work cultures, which are male-dominated, hierarchical, and depend on well-developed networks of personal connections for work to get done. They are insular environments, where careers are built over decades and the levels on the corporate ladder are well-defined. Those tapped and developed as future leaders somehow look and operate very much like those doing the tapping and mentoring.  Loyalties run deep, developed through many years of working together through the ups and downs of the industry.  Thus, the good old boys network. 

Culture is about the way work gets done.  How people work together.  How information is shared.  Respect for individuals.  The way creativity is channeled.  How debate plays out, as intellectual wrestling for breakthrough thinking or political power struggles.  It’s about who and what are rewarded.

Survival in a fiercely competitive global business has to be Job One for U.S. automakers.  But transforming their cultures, which have become dead weights in their race to restore these once proud companies to health, has to be Job Two. 

Culture, in my book, is the oxygen that everyone breaths.  It can be energizing or toxic.  The faster you need to run, the better your oxygen supply must be.  How are the canaries doing in your work environment?

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