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Who Is Responsible for Culture?

If you’re someone who likes discussing culture, the news has been rich with topics lately. I had lunch with a former CEB colleague who is a good friend, and we talked about some of the recent corporate scandals and culture and when the seeds of disaster get planted.

One of the things I’ve realized is that we’re all two bad decisions away from homelessness. The corollary to this realization is that all companies are two bad decisions away from being splashed on the cover of the Wall Street Journal in a bad way. When you look at everything that’s been written about the most recent misconduct-related scandals, it’s clear that the circumstances surrounding the misconduct were entrenched in the culture long before anything went wrong.

Uber has an interesting opportunity as a start-up. If Travis Kalanick is open to learning and changing, as his CHRO and Uber Board directors have promised he is, he has the rare chance to turn the culture at Uber around pretty quickly. This would be a remarkable accomplishment, given that it has nearly 7,000 employees. My cynical streak (which I fight every day) whispers that Uber doesn’t have any real reason to change. It’s making money, and it’s poised to be a leader in the hotly contested self-driving car market. The recent brouhaha could be interpreted as a PR blip to be managed, endured, and outlasted.

Spackling over the rot rather than cleaning it out is a reasonable strategy to follow, given where Uber is in its life cycle and the priorities of its owners. The problem is that when you have a culture where employees don’t believe that misconduct will be punished, misconduct proliferates. And you don’t get to decide which kinds of misconduct proliferates. The downside of prioritizing profitability over doing things the right way will bite a company sooner or later. Uber is getting into the business of self-driving cars. What happens when an engineer in the self-driving cars division takes what seems like a minor shortcut at the time? If you’re Volkswagen, you end up paying billions of dollars in fines and a compliance monitor gets splashily assigned to you and even more splashily leaves a year later, leaving the impression that your culture is irretrievably broken. If you’re GM, people die.

But the consequences for Volkswagen and GE came years and years after someone made the instigating bad decision. And at the time, the decision was choosing something easy/cheaper/wrong rather than something difficult/more expensive/right. Who’s responsible at organizations for making sure that the hard-wiring is in place to avoid future calamities with a long time horizon? Who’s responsible for prioritizing culture and thinking through the long-term consequences of easy/cheaper/wrong?

My answer is that it starts and ends with the CEO. I’d love to know what yours is.