4 Secrets Of Strong Organizational Culture - “Smell Of The Workplace”

Re-posting this article originally written by Sourabh Soni on LinkedIn Pulse couple of months back.

Recently someone has shared with me an amazing video on YouTube explaining the concept of “Smell of the Workplace”. This was a brilliant speech delivered by Professor Sumantra Ghoshal, a management guru, a thinker, an author, a theorist, at the World Economic Forum several years back. This video is about transformational leadership and is a must-watch for all leaders -- irrespective of your company doing well or not. In this article, I am attempting to discuss key learning from this visionary.
Professor Ghoshal used the metaphor of “smell” to refer the corporate environment and culture and explained what should be the top-management mindset to improve the “smell” of the workplace for the sustainable success of the organization.

The same individual behaves differently in two different contexts and it is the quality of management who create the right context around their people to improve their contribution to the company.

Professor gave an example of “Downtown Calcutta in Summer” which makes him feel tired due the high temperature and humidity. On the other hand, while being a same person, the smell of “Fontainebleau Forest in Spring” makes him feel re-vitalized and energetic. Professor explained how the corporate environment are analogous and how top-management’s strategy, organization, process, infrastructure, policy etc. can leads to “smells” viz. constraint, compliance, control and contract. He suggested that management can shift the environment by “revitalizing” people as opposed to “changing” people by creating a right “context” around them viz. stretch, discipline, support and trust to maximize their personal contribution to the company.

In next few sections of this article, I am attempting to provide you a complete transcript of the mentioned speech/video in the very own words of Professor Sumantra Ghoshal.
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Revitalizing People

Individual do not change fundamentally, who they are, without any serious personal crisis of some kind. But the conclusion again for us, perhaps, key conclusion is that is the wrong question to ask. Revitalizing people has a lot less to do with changing people and has a lot more to do with changing the context that companies, that senior managers, that people in this room, create around their people. Now, context some manager called it “the smell of the place”, it’s a hard thing to describe. And let me try to describe it, the best way I (Professor Ghoshal) experience it, to my personal experience if you wish!
I teach at the London Business School, I live in London, have done so for years and half. And before that, I lived at Fontainebleau in France for about eight years. But when one look at me and then one at sound of my accent then you will know I do not come from either of these two wonderful places in the world. I come from India, from eastern part of India. My hometown is a city of Calcutta (now called Kolkata). So every year, I go to Calcutta in the month of July. That’s the only time when my children have a summer vacation. Calcutta is a wonderful town in winter, in autumn and in spring. But summer! Well, the temperature is 102, 103. The humidity is about 99%. And I feel very tired, most of my vacation I am tired, I am indoor.
I have to live in Fontainebleau and this I genuinely challenge you – go to the forest of Fontainebleau in spring, go with the firm desire to have a leisurely walk and you can’t. The moment you enter the forest that there is something about the crispness of the air, something about the smell of the trees. You want to jump, you want to jog, you want to catch a branch, run, to throw a stone, to do something.

“Bad” Context Around People

And that I believe is the essence of the problem. The most companies, particularly large companies have created “Downtown Calcutta in Summer” inside themselves. And they complaint that they say you are lazy, and that you don’t take initiatives, and that you don’t do take cooperation, and that you are not changing the company. This is not about changing me, I have a lot of energy in spring in Fontainebleau and I am a bit tired in Summer in Calcutta. And that’s the issue, to change ultimately beyond all these abstraction of strategy, of organization, the process. And at the end the issue is, how do we change the context, how do we create Fontainebleau forest inside companies. What’s the typical context, the “typical” may be a too stronger word, but what’s the context that you find in many companies. Not at their esoteric level, where most of the people in this room sit, but from the perspective of front line person, the sales man in Lyon. Top management creates strategy, Chris talked about it, and how does it come down to this front line person, to me -- the sales man in Lyon.

• Constraints - it tells me, so, by products, by customers, it tell me what I can do by box of constraints. The smell – and I am trying to relate this metaphor. We all see it, we entered a place in first five minutes we get a smell, you get it in a hum of people, you get it in quality, the color. The smell is constraint.

• Compliance - the companies create this elaborate compliance infrastructure of systems, planning systems, budgeting systems, financial systems. All of these boils down, by the time it travels down to me - the smell - it create to me is compliance. That I have to comply.

• Control – my relationship with not just my boss, but with entire management infrastructure, is one of control. It exist to control me.

• Contract - we repeatedly used the word, your job is a personal contract, relationship with a company is a contract, budget is a personal contract, transfer price is a contract.

“Good” Context Around People

So, the constraint, compliance, control, contract - that is the smell we create. That’s what I live in and then we say, you got to pro-actively create change, you have to take initiative, you have to cooperate. Where are we going to get those behaviors. What we found in our research, on the other hand, is few companies, that created an environment of, that we describe as the dimensions of stretch, discipline, trust and support. And let me take a minute or two to explain them.

• Stretch as opposed to "Constraints" - When top-management doesn’t create a strategy that boils down as constraints, but rather creates an exciting set of values, an aggressive ambition. All of which creates a smell of stretch. Not stretch that we want to be a 100 billion dollar company or anything. But the stretch in the sense that the every individual, all the time, is trying to do more rather than less.

Stretch is trying to do more rather than less

• Discipline as opposed to "Compliance" - Not, not compliance of all the systems that create compliance. Not compliance but discipline. Embedding norms of self-discipline and that you can see that in companies. You can see where day-to-day behavior is shaped by that embedded norms of self-discipline. Self-discipline is, yes, it meeting the budget but it’s much more. It is if meeting starts at 9.00, everybody there at 9.00. Its people collectively agree to a decision in management committee, even if you individually you disagree you do not start challenging that decision or unraveling it immediately outside in the corridor. In Intel, you see this norm – agree or disagree but commit. Yes people debate, people argue, but at the end the decision is taken and then agree or disagree but commit, is a self-discipline. 

Agree or disagree but commit, is a self-discipline

• Support as opposed to "Control" - Also, not control, but support. The whole role of senior management changes, when they are not seen as those exercises control but those who exists to with one purpose alone viz. to help me win! By access of resources, by coaching, by guidance.

Management (including boss) are all there To Help Me Win!

• Trust as opposed to "Contract" - Any finally not contract but trust. And the trust more than this very contractual sense in which we use the word trust. Trust, in the sense, that if you carry that card. I may in Australia and you may be in United States, might be I never met you. But since you carry a card is good enough for me to let go of safety business at usual and then fly knowing that you will be at safe pair of hands at the other end.

Trust - knowing that you are at safe pair of hands

Quality of Management

So, stretch, discipline, support, trust and I will invite you to don’t take those words, don’t intellectualize those words but try to sense the smell that can be created if those are the norms or behaviors.
And our research says two things.
Assertion 1, it is possible to create that smell in companies. There are companies, companies that were part of our sample. 3M is one example, where management can create this smell and protect it for long period of time. That’s assertion one, it is possible to do it and protect it.
Assertion 2, it is also possible, for a determined management, that is inherent of more of “Downtown Calcutta in Summer” to convert it to “Fontainebleau forest” to new context. And while we do not know, how to react very well from the discussion this morning, some of that been done in their companies, but we have seen others it has been possible.
And the statement that we would make is ultimately -- what’s test of quality of management of a company. Performance we know is very noisy measure. This to our mind, is a real test of quality of management. The context that manager’s creates that shape the behavior of people to stretch, to discipline, to trust and support.

A real test of quality of management is - the context that manager’s creates that shape the behavior of people to stretch, to discipline, to trust and support.

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