05 Aug Climate Change IS Important

Greater problems of focus and leadership inherent in an organization, just like the daily meteorological phenomena called “weather” are really driven by climate. Weather describes dynamic conditions that can change day-to-day, challenging and often defying prediction and control. Climate, on the other hand, is constant; it is the physical environment in which weather phenomena occur; thus it’s the thing that’s really important to understand. As it’s important to know, for instance, whether we want to or don’t want to live in a particular geography.

A fundamental difference between physical climate and organizational climate comes to mind almost immediately, however. No matter how hard we try (save for the highly incremental efforts to reduce global warming) we cannot change physical climate. Organizational climate, on the other hand, can be changed. It’s slow, and it takes the right leadership, and it takes a holistic and systemic focus. But it can be changed, and I’ve seen it change, but not as often as I’d like.

One example of climate change and its effects can be found in electronics retailer Best Buy. The retailer was facing stiff competition (soon to be come less stiff with the upcoming exit of Circuit City) and employee turnover rates exceeding 100 percent annually. The company, as most in retail tend to do, had very strict requirements about employee attendance and hours – all the way up through the management ranks. In 2007 the company decided to let people have some choices as to how they achieve goals, and allowed 60 percent of its headquarter staff to work on flex hours, as an example. It was a huge cultural change; and later measures indicated employee productivity increased by 35 percent in areas affected by this and other changes.

Unfortunately, I find more examples of climate change working in the other direction; employee focused companies bow to the competitive pressures of Main Street competition and Wall Street short-term financial requirements. They take the sorts of things Best Buy put into place away from their people. They centralize decision making and trim staff, overloading the remaining workers. They reward cost cutting behavior over true innovating behavior. American industry – and particularly the high tech industry – is loaded with examples of negative climate change. Ask yourself – is the climate in your organization getting better or worse? Better or worse for innovation?