Organizations must continually protect their culturesPosted by Albers Communications on May 6, 2011 |
This past Saturday, as I was milling around the Qwest Center Omaha with the rest of the 40,000 in attendance at the Berkshire Hathaway annual shareholders meeting, the voice of Warren Buffet penetrated my ear drum with a memorable sound bite.
He delivered one of his famous one-liners when asked what he had learned in the last year. His response – which drew appropriate laughter – was that he learned that he should let his Vice Chairman Charlie Munger write the next press release.
Of course, Buffett was referring to the press release that he handcrafted earlier in the year announcing that David Sokol had resigned from Berkshire Hathaway. This is the same press release that started a firestorm of questions, chief among them, whether or not Buffett has lost a step in his game. Critics believe that Buffett was too soft in the press release, praising Sokol for his work, instead of rebuking him for what appeared to be questionable transactions.
It didn’t surprise me to learn that Buffett writes his own press releases, but in this case, he probably would have benefitted from counsel outside the Berkshire bubble. Sometimes the corporate culture you have built prevents you from asking the difficult, but necessary, questions.
For example, if you have a consistent internal message to top management that their behavior must be ethical and beyond reproach – or there will be consequences – then it may become easier to assume that one of your top lieutenants, and heir apparent, is doing the right thing.
So when David Sokol comes to you with advice that Berkshire should look into purchasing a company in which he (Sokol) owns stock, it may not occur to you that he recently purchased the stock and that the transaction may breach your own internal insider trading prohibitions.
Berkshire Hathaway is not the only company that needs to take a lesson from this experience. All business owners and management teams need to treat their corporate cultures as precious commodities that require constant attention, nurturing and vigilance. It doesn’t matter if your company is a small local business or among the Fortune 100. You owe it to yourself, your employees and your stakeholders to hold true to your core corporate values, and surround yourself with advisors who will challenge actions that undermine your culture.