Managing the Contradictions in Your Culture
I attended a stellar conference last week called AMSFest—it’s a niche event focusing on association management software companies and their clients (I was speaking on the connection between technology and culture). One of the best panel presentations at the event was on the impact of private equity funding in the industry. There were some funders there, as well as some CEOs who were running software companies that had been bought by private equity groups—and in the audience were many of the clients of those very same companies. It made for a very interesting conversation, to say the least.
As I listened to the software CEOs, I was hearing a LOT of what sounded like spin to me. Their narrative was clear. Private equity is a good thing, PE firms only buy good companies, and sure, the goal is to build up the purchased company and sell it in about 5 to 7 years, but of course that doesn’t mean that they focus only on the short-term—their reputation would be damaged if they didn’t build these companies up for long-term success. Yes, they look for efficiencies and to propagate “best practices” across their purchased organizations, but that doesn’t mean they don’t care about innovation. Everyone knows that software companies must be constantly innovating, so don’t worry about that.
I call bullshit.
Sorry, but you can’t just throw out all those contradictions and expect me to just believe it. Let’s play some of those claims out in the real world. For example, the long-term/short-term thing is not something you can just declare to be in balance. Everyone in that company you just bought knows you’re going to sell it in 7 years. You can tell them that you ALSO value the long term, but it seems clear that the first priority is going to be getting the company ready to sell. Short term is inherently valued MORE than long term. That means that employees, down the road, will be faced with some choice about how to respond to a situation—one path favoring long term capacity, and one path favoring short term—and you KNOW which one they will choose (short term). That’s what culture does. It clarifies what’s valued, and that drives behavior.
Now, the CEOs were not lying to us. They really do believe in supporting these companies in the long term. But they are not fully confronting the nuances and contradictions within their cultures and what is truly valued. If they did, they’d make a clearer call about the short-term/long-term thing. State clearly that you value the short term, because it’s obvious to all of us. And then tell me what controls you are putting in place to make sure the long-term gets ENOUGH attention. It won’t get more, and it won’t even get equal attention, but tell me how you’re managing that.
But sitting up there and saying “It will all be okay, just trust us” doesn’t work in this day and age. Both your employees AND your customers are now expecting you to have a much better handle on your culture. How’s that going for you?