It’s funny how the big issues for leaders change over time. Here we are at the Fortune Global Forum in San Francisco, heart of the digital revolution, talking about our theme of Winning in the Disruptive Century – and virtually every discussion sooner or later returns to the issue of culture. Sometimes we hear it from the leaders of big, established companies like Levi Strauss’s Chip Bergh, Lockheed Martin’s Marillyn Hewson, or Charles Schwab’s Walt Bettinger. Sometimes the message is coming from cutting-edge tech entrepreneurs like Salesforce CEO Marc Benioff or Lending Club’s Renaud Laplanche, and sometimes it’s coming from the CEO of a 168-year-old heavy equipment maker, Siemens CEO Joe Kaeser. They’ve all concluded that regardless of their company’s age or industry, whether it makes jeans or software or loans, the key to its success is its culture.
“The most important thing I can do is get the culture right,” says Comcast CEO Brian Roberts. Benioff is building “a culture of trust” at Salesforce. Campbell Soup CEO Denise Morrison is deliberately changing her company’s culture to include “leadership courage” – willingness to take greater risks on new products and ideas as consumers grow more skeptical of Big Food. When Ram Charan and I asked attendees for their biggest concerns, many of them, across industries, said they were trying to build a culture of innovation.
That’s kind of surprising. We might have expected just the opposite – that quirky, unquantifiable human issues would become less important as the digital revolution remakes the economy. But in fact this is happening for a good reason. In the old industrial economy, work was more likely to be strictly defined and regimented; think of the assembly line worker tightening the same bolt in the same way as each car passed by, or the office worker who had to add columns of numbers or re-type letters all day. They either did the job or they didn’t. They were, in effect, human machines. Culture didn’t mean much, and most CEOs of the time weren’t interested in talking about it.
Today few workers do such work. Technology has advanced to the point where machines can now do much of the machine work in the economy, and people do jobs that aren’t nearly so strictly defined. Exactly what employees do from moment to moment and how much discretionary effort and ingenuity they put into their work is increasingly up to them. CEOs can try ordering them to be more engaged or creative, but it won’t work. Only the culture – the norms and values that are in the air they breathe, the kinds of relationships they have with other workers – can do that. Little wonder that every business leader now wants to talk about the company’s culture, and frequently wants to change it.
Siemens’s Kaeser said it well in explaining his culture-change efforts. “When I explain what I want to do, experts tell me to change our incentive compensation because people are motivated by money,” he says. “That is complete nonsense. You have to touch their hearts.” Believe me, CEOs didn’t used to talk that way. An unexpected effect of the digital economy is that now, they all do.
Main-stage sessions of the Fortune Global Forum are livestreamed at Fortune.com/globalforum2015. For information on specific sessions and timing, visit www.fortuneconferences.com. Full sessions from the main stage will also be available on demand on our Fortune Magazine YouTube channel. You can follow what’s being tweeted about it at #FortuneGlobal.
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