Leaders create corporate cultures – newspapers are no different

As more phone hacking stories emerge, News International’s line that it was all down to rogue operators is looking less tenable by the hour. In the past few days, some of those involved have broken ranks and given us some revealing insights into the organisation’s culture.

Here’s former News of the World journalist Paul McMullan:

You’re only as good as your next story, they used to do a byline count at the end of the year and if you didn’t have enough it was goodbye.

And Glenn Mulcaire, a private investigator for the paper:

Working for the News of the World was never easy. There was relentless pressure. There was a constant demand for results. I knew what we did pushed the limits ethically. But, at the time, I didn’t understand that I had broken the law at all. 

Corporate cultures are based on shared assumptions. Clearly the prevailing assumptions at the News of the World said that this sort of thing was OK, so much so that people didn’t even stop to wonder whether they were doing something illegal.

As I have said before, people rarely deviate very far from corporate norms when they are in pursuit of corporate goals. There is no such thing as a rogue operator. When there is relentless pressure to do whatever it takes to make the numbers, some people take that literally and break the law. Often, managers collude with such behaviour in that OK-but-just-don’t-get-caught sort of way. If rogue behaviour really was counter-cultural, managers would slap it down after the first few incidents. When people have crossed the line repeatedly, it is because the corporate culture approves, at least tacitly, of their behaviour.

And who creates and maintains an organisation’s culture? As the great Edgar Schein told us, leaders transmit and embed culture. Demanding, high-pressure environments like that at the News of the World don’t just happen. Leaders make them happen. As Schein also found, one of the most effective ways of transmitting cultural norms is the behaviour of senior managers. When they behave in a certain way, everyone else will too.

That’s not to suggest that News of the World managers hacked phones but they certainly created the culture in which such practices became acceptable. They would have worked hard to maintain such a competitive and performance-driven environment and they would have monitored the results closely. It is inconceivable that they were not aware of the behaviours their culture encouraged.

When companies get caught doing things that are illegal or immoral, they often try to individualise the problem, expecting us to believe that it was just one or two bad apples in an otherwise decent organisation. Investment banks blame rogue traders, newspapers blame rogue journalists. It’s all rot, of course. High performance cultures, by definition, monitor performance. Their managers might not know in detail who has done what but they set the targets and they know what people do to achieve them.

The financial crisis didn’t happen just because a few bankers went a bit mad and the hacking of mobile phones didn’t happen just because a few journalists lost their moral compasses. Both happened because their organisations created cultures, and systems of reward and punishment, which encouraged such behaviour. Employees don’t just decide to behave unethically of their own accord; they do so because everyone else is doing it and their bosses reward the results.

Columbia University’s Journalism Review said yesterday that the News of the World was a “corporate culture gone mad”. I don’t agree. This was not a company in some sort of meltdown. It was a highly controlled and highly effective operation. It could not have been so unless its managers knew what they, and their employees, were doing.

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6 Responses to Leaders create corporate cultures – newspapers are no different

  1. Pingback: Leaders create cultures – and newspapers are no different - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Doug Shaw says:

    Rick I think this is a great post. I don’t agree that folk rarely deviate from corporate norms when in pursuit of corporate goals. In my case, I often find deviation from the norm essential in order to achieve my most meaningful work. It’s no wonder I’ve got no mates!

  3. Pingback: #Hackgate Rolling Blog (2) « Slugger O'Toole

  4. Prateek Buch says:

    How very true – and for that reason there must be a full, independent and transparent enquiry into this whole squalid affair, an enquiry which encompasses corporate culture @ NOTW & News International

  5. PinkPolitika says:

    As ever, thanks for the analysis Rick.

    I might add here that the issue of culture (acceptable ideas and behaviour) has an even more fundamental aspect, when we start to get dissonance between what we’re exhorted to believe by those in power, and what the official line (rational judgements, evidence-based policy…) might be.

    In that respect I find the current transition towards political moralising of concern. My reasoning is this: http://pinkpolitika.com/2011/07/05/when-morals-are-substituted-for-money-and-vice-versa/.

    I can see an inadvertent move here towards a rather scary political / public culture arising from the declarations of politicians who really ought to know better, but want to fudge matters which would cost (them) a lot to address properly.

    These political moralists don’t, I think, consciously intend to make us perceive money as more important than real human need, but that’s what their pathetic, counter-evidential pronouncements on issues such as single parent families actually do.

    There’s an intolerance developing which often has a grain of truth somewhere, but is being used to ‘save’ (i.e. keep, put big value on) money at the cost and risk of vulnerable people. Not nice.

    If you like, it’s the other (of course less personally nauseating) side of this ‘corporate culture’ thing we’re discussing above.

    As I’ve said before, beware. There’s cultural change in the air which we all need to consider (and sometimes counter) very carefully.

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