CommonSense Blog

The Impermanence of Corporate Culture

By Jack LeMenager | Nov 08, 2013

About seven years ago, a friend of mine – I’ll call him “Bob” – joined a Silicon Valley start-up, which I will call “Dot.Com.” He was among the first employees and knew he was taking a huge career risk. But he was footloose and fancy-free at the time, young, newly divorced and feeling the urge to start fresh in a new city, with new challenges.

Seven years later, he’s one of the veterans. In the office, he often wears a San Francisco Giants jersey with the number “11” because he’s Employee #11 – that is, the eleventh person to join the company that now numbers nearly a thousand employees in locations from the Bay Area, to Austin, New York, Boston, London, and Singapore.

His company is about to go public and he stands to reap an immense financial windfall from his tens of thousands of stock options. Yet, he’s eager to leave.

Asked why, Bob replied that the company isn’t the same as it was in its founding days. He explained that the sense of camaraderie that infused and inspired the core team as it worked long hours and struggled to launch its web-based services model has evaporated. In its place are policies, procedures, politics, and hassles – and not a lot of fun, he adds.

We pressed the question, wondering whether the culture of the organization had changed. He looked puzzled. “Culture?” he asked. “Look. All I know is that we worked hard, we worked long hours, and we played hard. We had a strong sense of mission that we would conquer the world. We went about it in a single-minded way, as a team.”

Riding the roller coaster

That Bob is now leaving is not an uncommon phenomenon in that world. Previously successful start-ups like Apple, Microsoft, Google and countless others have experienced mass migrations around the time of their IPOs. Newly and comfortably wealthy, a lot of their leading talent felt free to cut the strings, desirous of riding that roller coaster again. So there’s that aspect, too – that desire to experience the thrill of creation once again.

But the transience that is a corporate culture intrigues and invites further exploration. How does a company culture form? What sustains it? Is culture permanent? Does a company culture evolve with time? How? Why?

The short answer is, a culture is no more static and definable than is the business organization in which it lives. We know from experience and observation that static businesses ultimately cease being. In that change and challenges will always assault organizations, remaining an unchanged operation is a recipe for eventual failure. So the culture of the organization evolves with the changes and challenges that the business confronts and surmounts.

Not to put too much of an egghead spin on it, but it helps to read what an academic has to say on the subject. According to MIT’s Edgar Schein, one of foremost scholars on culture, organizational culture is “a pattern of basic assumptions – invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration – that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.”

Phew!

It’s a Darwinian thing

Okay, that’s a long-winded (but accurate) way to describe the internal dynamic of a team as its members confront the issues and tests that comprise the foundation of an enterprise’s creation. As Schein goes on to point out, the culture of an organization evolves – in fact, it must evolve – to adapt to the evolution of the world in which it operates. Again, as noted here (and more famously by Charles Darwin), a failure to adapt is to accept expiration.

So if we think about the many external inputs that impose change on organizations, it’s obvious why a culture evolves. As Bob’s company grew, its opportunities expanded. The size, sophistication and demands of its growing customer base grew too. What satisfied Dot.Com’s early customers – many of which were also small companies – wouldn’t work for the far more demanding and exacting Fortune 500 companies it was now servicing.

Bob’s company hired additional staff to help tackle and solve the fresh unknowns, problems and challenges its newer customers brought it. And with each new staff member came a new way of approaching such challenges. Those new approaches may or may not have meshed with the culture of the previously small company.

With each new challenge, with each new staffer, the culture changed just a little. Amassed over the seven years of an improving balance sheet, with dozens and then hundreds of new employees being added, the culture known by Bob and his teammates from the early days had evaporated.

Is that a good thing? Well, if Dot.Com is a thriving business, solving heretofore-unsolvable problems for other businesses, then yes, it’s a good thing. But if you’re Bob, longing for the fun days of being in a startup, it probably isn’t. No wonder it’s time for Bob to move on.

Change is a good thing because with it comes growth, success and profitability. And an evolving culture.