Your Company’s Culture is: How You Make Decisions

Being closer to the end of my career path than the beginning, I have a sample size of what it’s like to work for a dozen different high-tech companies. Some have been more successful than others, some were fun to work for, some not so much, and a few set out to change their industries, and did.

The one thing I am most sure of is that while many companies talk about their culture, the real test of whether that’s lip service or real is this – a company’s culture is a direct result of their decision-making process. And the corollary: If you examine a company’s decision-making process, you’ll know what that culture values.

I’ll even go so far as to give this advice: When you are interviewing a company in considering working there, be sure to ask each interviewer, “How do decisions get made at this company?”

Decision-making generally comes down as one of two kinds: Distributed and Hierarchical. In a Hierarchical system, information and ideas move down from the top of the org to the bottom. In an orderly hierarchy a person at any level only works with their boss above them, and their team, at their level, or their reports below. I got a very clear message about hierarchical when working at Kodak when I sent an idea by email to someone two levels above me – a storm of reminders to “follow the process” and “respect the structure” ensued.

Information and ideas can flow up a hierarchy, but there are many forces downward that make it rare for good ideas to actually get heard, which is why you hear stories of serendipitous conversations between people far apart in the structure, where a ceo hears a great idea from someone many levels lower only by a conversation at a party or at their kids’ soccer game.

For those of you who know me, it won’t surprise you that people like me don’t do well in hierarchical structures. And if you’re reading this you might be like that as well. Of the three roles in an organizational hierarchy there are workers, and managers, and executives. Hierarchical structures rely on information hiding, and context limiting. The classic middle manager keeps their position by holding information received from above and releasing it on a “need to know” basis, and provide value upwards by summarizing status information. Creo made a conscious decision to not hire managers, just leaders. Leaders are part of a team, they can contribute to the team in ways other than holding meetings and asking how things are going.

The strangest decision-making culture I encountered was one which valued every person having a voice. While being able to express an opinion does let people feel heard, they had no way to resolve disputes when opinions differed, and put no less weight on a developer’s opinion of a marketing program than the product manager. To be able to take action and move forward, there need to be areas of expertise where people with the education or experience, whose job descriptions include the responsibility for a business growth area are empowered to make decisions.  Having every voice feel heard means that no idea goes unheard, it doesn’t mean freezing the company into doing only what everyone agrees with.

The more inclusive kind of decision-making culture is Distributed. Distributed decision making requires a wide and open sharing of company objectives, costs and revenues. Distributed decision-making relies on having smart employees who can make very good decisions if they have the same context and data as the executives. Professional managers who try to keep their team “in the dark” so they can “focus on what I tell them to do” find distributed environments difficult to show their value.

Another measure to consider when interviewing a company you are considering joining is talent capitalization – how well does the company make use of the talent that it has hired. Malcolm Gladwell describes this powerfully in his book Outliers. To unlock employee talent and turn it into profitability, the culture needs to identify where the talent pools are, and adapt itself to decision-making that lets that talent flourish and drive the company forward. The most amazing result of the Creo 360 review process that ranked everyone in the company on a scale of how much they contributed to the company’s success as determined by the people they work with was this – each year there were people who had some major contribution to the success of the company that had no relation to their position in the hierarchy. They were people with a talent, who saw an opportunity to make a contribution to the company, worked in a culture that (at least) didn’t prevent them from doing that thing, and in an example of rare karmic justice, got recognized for that accomplishment and received a block of stock options as large as people well up the salary scale of hierarchy.

Here’s the thing: When you interview and you’re given your chance to ask your questions, here are two to have on your list:

  • How does you company make decisions?
  • How do ideas get captured, reviewed, and implemented?