Tuesday, August 7, 2012

Culture is a Cash Cow

I read an excellent article that my dear colleagues Ed Nangle and Charlette Stout brought to my attention last night.  It's by Pamela Babcock, entitled, "Penn State's Organizational Flaws Make for a Perfect Storm."  (sorry it's on shrm.org have to be a member) It is a GREAT article on the impacts of culture and HR's stature has on an organization.  I liked it so much I read it twice.

Regarding the culture, a 267 page FBI report talked about a janitor witnessing Sandusky assaulting a young boy in the locker shower but not reporting from fear of being fired.  The FBI investigator Louis Freeh stated, "If that's the culture on the bottom, God help the culture on the top."

One recommendation from the report on culture was to:
Vigorously examine the culture to create a stronger sense of accountability among its elders.  The report also calls for more transparency of university management and integrating the intercollegiate athletic program into the broader university community.  

All I have to say on that is, Ya think?????

The report also talks about elevating HR's position within the University as it is not seen as a strategic function.

Another example of a breakdown in culture is that in my own hometown.  The Atlanta School cheating scandal.  I wrote a blog post on that topic here.  It breaks my heart.  How many people in a system have to turn their head, a blind eye, compromise their own ethics because of fear?  Think of Enron,  same situation different company.

So let's pretend the ethical reasons to have a culture of accountability don't compel one to make sure organizational culture promotes key values.  Let's think about the cash.

1) How much money has the Penn State debacle cost the taxpayers?
2) How much money has the Atlanta Cheating Scandal cost the taxpayers and how much future earning potential have these kids lost because they were not educated properly?
3) How much did the demise of Enron cost everyone?

So this begs the question.  If an FBI agent understands HR's role in making sure a culture is strong, accountable and healthy why doesn't anyone else?

I am not sure but managing one's culture seems like an excellent way to add to an organization's bottom line and establishing a competitive advantage.  Think about those that get it right....how much is that worth?

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