The Rope Begins to Fray
Our neighbors recently invited us to go out on their boat with them at a local lake. With four children in tow (two of theirs and two of ours), we set off on the vast reservoir that is the primary source of drinking water for the Raleigh-Durham area. I spent most of the time sitting in the back of the boat enjoying the cool breeze as we zipped around the water. We occasionally stopped to take a quick dip in the lake. However, the majority of the time was spent whipping the children to and fro on a large flotation device called a “hotdog” that looked like a…hotdog. The hotdog holds up to three people and was attached to the boat by a nylon rope. Occasionally the boat captain would take sharp turns and make large wakes that would toss the children off of the hotdog and into the water. We all had a good laugh watching the kids wipe out. While the rope attaching the boat to the hotdog appeared to be brand new, I took notice of the section of the rope looped around a hitch on the boat. This part of the rope was frayed while the rest of the rope was in perfect condition. While I think the rope probably had plenty of life left in it, it occurred to me that as the rope began to fray more and more, it would eventually break, but it would be impossible to predict the precise moment at which the rope would finally give in. All that was visible to me were signs of fracturing (i.e. broken threads in the rope).
An organization’s culture is much like a rope–it is made up of hundreds or thousands of threads that when woven together form a strong cord. But, even the best of ropes fray and little strands eventually break. A few broken threads isn’t a problem. However, there should come a point at which anyone looking at the rope can judge that it could snap at any moment, again without being able to say precisely when it will break. If the rope breaks carrying kids on a hotdog being pulled by a boat, the chances are that no harm will befall them. But when an organization’s culture breaks, the organization can be sent into a tailspin from which recovery is impossible.
Espoused Values Vs. Values-in-Use
Organizational cultures break down as the distance between espoused values and values-in-use grows, and the behavior of individuals no longer reflects espoused values. Cultural values are like currency—currency only has value if someone is willing to accept it. If the values of an organization no longer have currency, there is no incentive to uphold them, and they become just as worthless as a Canadian quarter in an American vending machine.
The people who are most responsible for ensuring that an organization’s culture is healthy are its leaders. And the key for leaders is to pay careful attention to the alignment between why an organization exists, the values that flow from that, and the subsequent behaviors that individuals within the organization manifest based on those values. As I said previously, there are always going to be a few frayed threads on the rope, and likewise, there is always going to be some incongruence among an organization’s purpose, its values, and the behavior of individuals within an organization. A wise leader will neither overreact to the occasional trivial incongruence nor will she sit idly by while the rope rapidly frays.
I have personally had the opportunity to work in an organization when the rope snapped. In the case of the organization where I worked, its leaders neither understood nor could they articulate the unique purpose for the organization’s existence. While there was a very robust attempt to define the organization’s values, this was moot because the values were not bound to the purpose of the organization. An organization’s purpose is like its gravitational pull—without it, things just float away. Without a clear understanding of the organization’s purpose and associated espoused values that aligned with that purpose, people started to lose a sense of how they were supposed to behave in the most literal sense. People actually did not know what their jobs were or what they were expected to do. The rope snapped, sending the organization into a tailspin. In this particular case, the reason the culture suddenly broke was that its leaders were paying attention to the execution space (i.e. how to do things), and had become so preoccupied with it that they took their eyes off the why.
Case in Point: United Airlines
Another organization that appears to be undergoing a very public cultural collapse is United Airlines. One could dismiss the many negative headlines United has generated over the past several months as bad luck. But it’s not bad luck; it’s bad leadership, in my opinion. Simply put, I believe the leadership at United have been so focused on other things (probably profit margins) that they’ve stopped paying attention to the organization’s culture. As espoused values and values-in-use began to drift apart at some point in United's recent history, incidents started to occur as a result of behaviors related to unhealthy values-in-use (again, the greatest value probably being profit margin).
The first public sign something was amiss at United was when Dr. David Dao was forcibly removed from an overbooked United flight in early April. Some have argued that Dr. Dao should have complied with police orders to deplane. I tend to agree that disobeying police orders is usually not going to end in your favor. Nevertheless, that argument misses the point. The problem is that United sold the same exact thing to two people: one seat on the same flight. The rationale for this practice has been explained to me. I understand there are algorithms that can more or less predict how many people will not show up for a flight, allowing airlines to know by how many tickets they can oversell a flight. And I also understand that overselling flights helps to keep fares lower by ensuring that airlines can fill every seat and maximize the profit for a given flight. But the algorithms didn’t predict Dr. Dao resisting or people taking video of the dramatic encounter, resulting in a public relations nightmare for United.
Even though overbooking flights is a common practice for airlines, I believe United still could have handled the situation better. But United’s choice to use the stick instead of the carrot suggests an organization in the throes of a cultural meltdown with no grounding in humane values. The fact of the matter is that people rarely fly these days to gaze at the earth from 30,000 feet above. People usually have somewhere to be. A wedding. A funeral. Work. A family reunion. A vacation. In other words, bumping someone from a flight is not a trivial matter. I don’t know how much United would have had to pay for people to voluntarily give up seats on Dr. Dao’s flight. But I do know that at some point the cost of not being somewhere would have been worth the opportunity of $600, $800, or even $1000. While that’s a lot of money to shell out to get someone off a plane, Mr. Dao and others who have been bumped from flights are not the ones at fault and therefore should not have to accommodate the airlines.
In another example of United’s broken culture, a mother was forced to carry her 27-month-old son on her lap during a long flight. While the mother had purchased a seat for her son for a sum of $1000, United gave the seat to a standby passenger for $80. Never mind that carrying an infant over 24 months on your lap is against FAA regulations. I’m sure United was happy to compensate the passenger for her inconvenience. But that United is suffering from a breakdown in its organizational culture is already painfully obvious and compensating the passenger in question–while the right thing to do–is not going to reverse their meltdown.
I too had a rather unpleasant encounter with United in mid-June this year. My family and I were supposed to fly from Raleigh to Houston for a family vacation. We miscalculated our travel time to the airport and arrived too late to board the plane. That was our fault, and we did not expect United to compensate us. We decided to book last-minute seats on another carrier. However, upon leaving the gate where we missed our flight, I asked the gate agent if missing this flight would in any way affect our return flight. Without hesitation, the agent looked me in the eyes and said "absolutlty not". Her response seemed to make sense to me. After all, we had paid for roundtrip tickets, so our return fares were included.
The day before we were scheduled to return home, I decided to double check our itinerary, only to be met with an error code indicating that the booking reference was invalid. I called United, and it was explained to me that because we missed our outgoing flight, our entire itinerary had been canceled. I was completely taken aback but managed to stay calm as I discussed the issue with a United representative. He explained that the United Contract of Carriage indicates that a missed outgoing flight on a roundtrip booking voids the return flight. He then chastised me for not reading the Contract of Carriage, in which the terms and conditions are clearly spelled out indicating that I was in the wrong. I told him that I had not read the Contract of Carriage but instead relied on the word of a human being—a duly employed representative of United Airlines, whose word I believed. The representative told me that it wasn’t a big deal and that he could rebook the flight, but that we would have to pay change fees of $200 per person. There were four of us, so that would have come to $800, which is roughly $200 shy of what I paid for the entire roundtrip fare to begin with. The representative lamented about how he talked to customers every day who make these kinds of mistakes because they simply didn't read the Contract of Carriage. The United Contract of Carriage is 56 pages long and consists of 37,642 words.
To the representative’s credit, he eventually agreed to waive the change fee after about 45 minutes of a polite if frustrating back-and-forth conversation. The fact is that this representative had within his power to waive the change fee from the moment I explained our situation. Instead, he castigated me for not reading United’s novel on their terms and conditions. When the word of an employee (i.e. the gate agent who assured me our return flights would not be affected) is not sufficient for a customer to rely on and instead the company hides behind 56 pages of legalese to extract dollars from customers who have already paid for something, that organization has a problem. In United’s case, it's a broken cultural compass.
Balancing Profit with Other Needs
The first line of the “United Customer Commitment” (what I would call the organization’s “constitution of values”) states: “We are committed to providing a level of service to our customers that makes us a leader in the airline industry.” While this rather nebulous statement can be parsed in ways that are not flattering to United, I’m willing to grant them the benefit of the doubt and assume what they mean to say is that they are committed to serving the customer. But apparently, as evidenced in the many public brouhahas United has experienced over the past three months and my own experience, I can only conclude that the espoused value of customer service is completely divorced from United’s values-in-use. My diagnosis is that United’s values-in-use compass, as manifest in the behavior of its employees, is pointing to money first. In other words, it would seem to me that United’s primary purpose for existing is to make money. I do not mean to suggest that there is anything wrong with profit being a core goal of an organization. However, profit must be balanced by other purposes that transcend what is on the very bottom of Maslow’s hierarchy of needs–survival. Yes, money allows us to survive. But when it becomes the only or even the primary motivator for an organization, the rope will fray and eventually break, and you won’t be able to predict when that moment comes unless you are paying attention to the rope and adjusting appropriately to avoid excessive fraying. And chances are, if your bottom line is the bottom line, you’re not even looking at the rope.
There are myriad examples of organizations who’ve lost their way and broken their cultural compasses either because they had not clearly defined their direction or because their direction by default became making money above all else. Take the example of Wells Fargo, where the bank was encouraging the opening of additional accounts in members’ names without their consent. Take Bernie Madoff. Take Enron. Even if you’re working in the finance industry, it is imperative that your organization has a purpose that transcends our basest human needs. Every organization needs a genuine why that has to do with more than the financial bottom line. Otherwise, the vaunted values embossed on large brass plaques (i.e. the espoused values) will not drive employee behavior. Instead, the gap between what leaders etch in marble tablets and do in deed will lead to cynicism within the organization, rot, and an eventual collapse of the organizational culture. It’s a painful thing to experience from the inside and an ugly thing to observe from the outside.
Accountable Leaders Create Accountable Cultures
The good news is that every organization has a choice about building values into its culture that create virtuous cycles of behavior. But these values must be lived by organizational leaders, and the leaders must hold each other accountable to living these values. This is simple, but I admit it’s not always easy. Nevertheless, the laws of nature will always prevail, and an organization that tolerates and encourages vicious cycles of behavior due to base values or the absence of purpose beyond profit will eventually find themselves in the tailspin of cultural collapse.
So, how do you predict the moment when an organization’s culture is going to snap? You can’t, so keep your eye on how much the rope is fraying...