How to avoid a culture crisis

It can often take a corporate scandal to alert people to potential problems, but much can be done to promote a healthy organisational behaviour and develop resilience against insidious cultural problems. Alder Media explore recent examples where organisational culture has been cited as contributing factors to the crisis that occurred.

There is a persistent and dangerous disparity between the way in which organisations think they view culture, and the way they influence and manage it.

It has become de rigeur to blame all manner of catastrophic failures on ‘a cultural problem’, as if invoking some disembodied set of norms and behaviours that exist outside anyone’s control creates distance from the culpability, and so is the total answer to everything.

It isn’t.

The fact is that those at the heart of an organisation – who should be setting the cultural climate – can often be blind to problems mounting up around them, and the results can be calamitous.

Taking responsibility

General Motors sustained serious reputational damage after mishandling the issue of an ignition fault that would eventually be found to have cost lives. In 2014, the company’s CEO, Mary Barra, said an internal investigation found: ‘a pattern of incompetence and neglect’ that led to 11 years of delays in recalling millions of cars.

Former US federal prosecutor, Anton Volukas, was deeply condemnatory of a lax culture that pervaded GM when he wrote his investigation report. He revealed that while everyone engaged on the ignition switch problem had the responsibility to fix it, nobody took on that responsibility. Despite the issue having been investigated, and the fact it touched numerous people at GM including engineers and lawyers, nobody had raised the problem to the highest levels of the company. Volukas condemned GM for a string of failures that had led to fatalities. Worse, GM did not disclose the fault. Nor was it discovered by regulators, or transport safety agencies: it only came to light after a lawyer in Georgia sued the company on behalf of the family of a woman who died in a car crash believed to have been caused by the ignition fault.

Papers were released that laid the situation bare, many law suits followed, and GM ended up dismissing 15 employees, including executives. Mary Barra did her best to weather the storm, but she had to acknowledge that central to the problem was her people’s belief the fault was merely a customer satisfaction matter, rather than one fundamentally to do with safety.

Cabin pressure

Best practice is to aim to build an effective culture in every sub-group and team. The circumstances surrounding the crash of Asiana flight 214 at San Francisco airport in July 2013 brought this into sharp relief.

Asiana is one of South Korea’s two main carriers. The crew of one of its Boeing 777s mismanaged the approach to the airport, but the real culprit here was the airline’s cockpit culture.

An investigation report into the crash – which killed three passengers and injured 187 – made some astonishing assertions, especially about an organisation operating in a safety-critical industry:

  • Challenging the pilot might have been considered disrespectful.
  • Pilots would not wear sunglasses, even in high levels of glare, because to do so was  deemed ‘impolite’.
  • No member of the professional crew intervened until seconds before impact, by which time it was too late.

Waiting for someone else to take action merely reinforces the prevailing culture and embeds more deeply whatever flaws in that culture are there already.

Some obvious questions, then: does everyone in your organisation feel confident, willing and mandated to take appropriate action if the circumstances warrant it? Does the corporate culture, explicitly or by default, tend to favour hesitation and passivity? Is whistleblowing encouraged and supported, or is it viewed as career suicide?

Societal factors

Societal traits and national culture come into play at corporate level, too.

The most scathing report on the Fukushima Daiichi nuclear power plant meltdown in 2011, was written by Kiyoshi Kurokawa, a medical doctor and professor emeritus at Tokyo University. It followed a six-month investigation that clocked up more than 900 hours in hearings and interviews with more than 1,100 people.

Professor Kurokawa wrote: ‘Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience, our reluctance to question authority; our devotion to ‘sticking with the programme’; our groupism; and our insularity.

‘What must be admitted – very painfully – is that this was a disaster ‘made in Japan’. Had other Japanese been in the shoes of those who bear responsibility for this accident, the result may well have been the same.’

The commission of inquiry: ‘…found ignorance and arrogance unforgivable for anyone or any organisation that deals with nuclear power. We found a disregard for global trends and a disregard for public safety.’

The company running the plant, the government and the regulators were all censured for collusion and lack of governance.

Corporate awareness

Booz & Company (now Strategy&) is an international strategy consulting firm. In 2013, it conducted a culture and change management survey among 2,200 global participants that lifted the lid on corporate attitudes to culture. It found:

  • 84% of respondents believed their organisation’s culture was critical to business success.
  • 96% said some form of cultural change was needed in their organisation.
  • 56% believed their organisation needed a major overhaul of its culture.
  • 45% did not think they had the capabilities required to deliver lasting change.
  • 57% were sceptical that any change was possible because of failed efforts in the past.

So, there is plenty of awareness of – and certainly lip service paid to – the importance of positive culture, but huge gaps can appear between intent and execution when it comes to creating, sustaining and nurturing the right organisational culture.

It can often take a corporate scandal to alert people to potential problems, but much can be done to promote a healthy organisational behaviour and develop resilience against insidious cultural problems.

Specialist external consultants – by their nature untainted by a prevailing culture – can be well placed to diagnose cultural problems and to recommend action based on a range of intelligence-gathering activities such as: anonymous surveys; focus groups; face-to-face interviews at all levels in the company; working with the board; a reputation audit involving stakeholders; and benchmarking against industry best practice.

These measures can and should identify problems and allow you to address them.

It is wise not to wait for lightning to strike.

Article written by Anthony Longden of Alder Media. Contact Anthony at

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.