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    Organizational Culture: more important than we think

    September 12th, 2005

    Back in business school, one of the most amazing statistics that I learned was that organizational culture was the primary culprit in derailing 1/3 of all corporate mergers. 1/3! I was surprised that such a "soft, fluffy" thing could become such a huge factor. But it did make sense - it's why so many mergers look so enticing on paper, but end up failing so miserably.

    My previous boss always used to say, "Management is in charge of really only 2 things: culture and structure." Since he didn't have an MBA at the time (and I did), I thought I'd inform him: what about strategy? competitive intelligence? what about strategic planning? He just kinda smiled and I thought I had him. But upon further reflection, I'm realizing that maybe he's right. All of those things are important, but they end up falling under structure and/or culture - i.e. strategy & intelligence & planning have to be built into the organization.

    And now, thinking about hospitals - when you look at the 100,000 or so deaths that happen as a result of accidents, how many of those are really a product of a poor organizational culture? Aren't many of these errors really a result of people not communicating or people fearing the wrong things? These are org culture fundamentals, aren't they?

    When we look at some of the best books written on leadership and hospital management, strangely, they take a disproportionate amount of space to address organizational culture. For example, the series I did on If Disney Ran Your Hospital was primarily about reloading the culture. Hardwiring Excellence by Quint Studer spends a lot of time trying to help you create a success-breeds-success culture. When MBA students study the success of Southwest Airlines, they come to the conclusion that "culture" is their source of competitive advantage - it's unique, it's lasting, and others can't copy it.

    So why doesn't anyone in healthcare talk about this more? Especially as the tidal wave of consumerism bring more change, how much more will we have to be organizational culture architects?

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