Managing a Corporate Cultural Slide

It has become accepted wisdom in the corporate world that at one time or another every business will be forced to make radical changes. In fact, there is a blossoming industry of consultants and advisors who are equipped to help companies execute and survive these inevitable upheavals. But the authors propose that there is a better way to ensure that your company doesn't get ripped apart by radical change: Make sure it never needs it. What CEOs don't realize, say the authors, is that they could prevent their businesses from confronting the risks of wholesale change if they knew enough to identify and make smaller changes before too much friction builds up inside the company. Leaders and their management teams must be alert to -- and willing to confront -- early signs that the company's internal culture is not consistent with how it used to be, or how the leadership thinks of it. Making preemptive moves is never easy, because the signs are subtle and do not show up in traditional financial metrics. Shoring up a company's sagging identity is almost never a financial priority on par with, say, buying a new piece of equipment.

The authors explain which indicators CEOs should monitor and take seriously (turnover rates, for example, or changes in the profile of new hires) so that they can make rational decisions as they are warranted, rather than waiting until panic sets in and countless changes are unavoidable. Such incremental shifting poses its own challenges: It's hard to convince others to join the movement when the culture in question looks healthy, but doing so will spare the company from the tough task in the future of having to reinvent itself. Given the choice, wouldn't most leaders prefer a low-level struggle with change rather than a fierce smackdown?