"At its heart, this perspective maintains that the essence of a company is not what it sells or how it operates, but rather who the company is - its character, culture, personality."
"Action follows the character. More than anything else it is company's character that determines its prospect for future success. If its people are committed to success, if they have the temperament to withstand adversity and setbacks, if they possess the maturity to know when one path is leading nowhere and recognize that it is time to follow another-then this company, like start-ups that General Doriot favored, will always find a way to triumph."
This is true even in sports. The difference between Australian and other cricket teams, is not the presence or absence of star players. It is rather a lot to do with character. As Hammer says, "In sports it is the spirit of franchise that leads to success-both the spirit that inspires players to superior performance and the spirit that prompts the team to attract and recruit the best players, to devise the best strategies, never to let up, and always to find a way to win."
Hammer offers following five key themes to assess a company's character.
Open inquiry: Does this company tell the truth? Can it accept unpleasant news and reject conventional wisdom? Are problems relentlessly traced to their roots, no matter whose ox is gored, or does politics rear its ugly head? Only companies that face reality and admit that the old model is obsolete will create a new one. Jack Welch nails it when he says, "We must face reality as it is, not as we wish it to be."
Morale: Do the employees believe in the company or do they suffer from corporate cynicism? Personal performance is never motivated solely by monetary rewards. A pride of belonging and sense of connection make people dig deep and deliver their personal best. Cynicism is hard to quantify but easy to recognize. Do people respect senior leadership or is it the object of contempt? Are communications from headquarters dismissed as empty platitudes or taken seriously? Does the mission/vision/values statement mean something or is it just corporate hot air? Do former employees come back to the company? Is their any alumni association? These are sign of high morale
Humility: Is the company arrogant? Do people take their success for granted? Do they behave as if their past triumphs guarantee the future? If so the company will never survive. An organization that will adapt to shifting circumstances is never complacent. As Michael Porter puts it, "The best companies are always worried." Hammer says, "When I visit a company whose people are aware of their past success but do not dwell on it, who understand that their current strengths merely position them to compete in the future, then I know I've found a company that has the potential to be for a long while."
Learning: Are learning and experimentation organized disciplines in the company or are they haphazard practices? Learning organizations are not made out of slogans and speeches but through explicit policies & processes and institutionalized, measured goals for learning and experimentation. Does the company have such goals? Are managers measured against them? Are funds made available for experimentation that may yield results only in very long run or is there only relentless pursuit for short-term financial results? Are mistake punished or are they examined for new insights? A company's legends are as revealing of its culture as folk tales are of a society's culture. Is an unsuccessful innovation of past years now described as a disaster or as an interesting experiment?
Sustainability: Even if a company scores high on all the above themes one more point remains to be examined. Are these virtues the creation of one individual or are they an intrinsic part of the organization? Will they last or will they fade? A Company that is dependent on greatness of its CEO is a company that will not survive the CEO's departure. However, if the leader has created an enduring company character, one that is the very fabric of the company, then the enterprise will endure.
"These themes are complex to evaluate. You cannot tell, for instance, if a company is humble or not by inspecting its balance sheet or by conducting a customer survey. Evaluating a company's character requires close scrutiny: meeting the management, talking at length with employees and customers, reading all available materials. This is not easy. But as the effort so the reward; superficial analysis yields superficial understanding. There is no substitute for hard work."
"The best way to judge a company is the same way you would judge a person - by what's on the inside, not by what shows."
"What really determines a person's long term prospects for success is character: work habits, resilience, tenacity, ambition, and willingness to learn. Since a company is at its core a group of people, try evaluate it in terms of the group personality of these people."
As Charles Handy says, "If we are to cope with the turbulence of life today, we must start by finding a way to organize it in our minds. Until we do that we will feel impotent, victims of events beyond our control or even capacity to understand."
