CULTURE

When the BI ckBerrys light up: why firms ne lect their culture
Former SJ Berwin head David Harrel argues that law firms delude themselves when it comes t their own values
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The banking crisis and the revelations about mis-selling and Libor fixing, and the failures in the NHS, have highlighted the issues surrounding corporate and organisational culture. It is perhaps not surprising that the newly-formed Financial Conduct Authority has made business culture a particular area of focus. What is perhaps more surprising is that culture was not a central focus before. It is my experience, both as a partner in a law firm and then subsequently as a company director, that, while culture is talked about as being important, businesses are generally reluctant to examine and analyse their cultures with anything approaching the same vigour with which they might address their business strategies. It is

more pressing and imp issues, while I, to their embarked on some abst se philosophical and largely meaningless examinatioh of our corporate soul. There are a number 0 reasons why culture is not properly examined, but one reason is the context in which it come to be discussed. Culture and 'jalues discussions are frequently reserved for drowsy afternoon . sessions at the partners ,Iretreat or part of a team-building e~ercise, where managing partner's and team leaders, desperate to keep the session uPbe,t and motivational, encourflge a consensus around a number of aspirations and values. e all play along and, therefore it is not particularly surprising tl at we leave the session with a r newed

In the law, we build firms that have real personalities, more apparent to those who deal wth the firm than those within.
as if culture is an interesting by-product of the business but not related to the hard metrics by which success and risk are measured. I remember very clearly that when I initiated discussions on the subject at partners' meetings, I could see the faces of many of my former partners light up, not for the reasons I hoped, but from the reflected glow of their BlackBerrys. It was clear they saw this moment as an excellent opportunity to catch up on belief in motherhood generally and apple pie in particul Ir.It is little wonder those BlackBerrys light up. Another reason for sce~ticism about debates on culture afd values is that, for many bu inesses, the issue only surfaces at t e behest of the marketing departm~nt, who need something catcJy for the firm's brochure, or he branding consultants, wh advise that they cannot choose thl corporate colours or logo for the website without a list of 'vllues'.

Is 'innovative' pink or yellow? Only the consultant (and heaven) know. Focus groups are formed and we set out our 'values' in as pithy and punchy a way as we can, but ultimately we are engaged in an exercise that is less about who we are but more about how we want to be seen. Some of it is based in truth but much of it is wishful thinking. There is nothing wrong with being aspirational and, indeed, aspirations are part of a firm's culture, but where the actual norms of behaviour within the business are not reflected in the 'innovative, proactive, client focused but caring and loving' environment which we have described, then scepticism follows quickly. Ultimately, I believe the reason why so many businesses do not analyse their cultures with any real vigour is because, like analysis of ourselves as individuals, it is not an easy or comfortable exercise and, therefore, best avoided by listing a collection of values which, if repeated enough times, might possibly become a reality. The paradox in all of this is that, in the law, we build firms that have real personalities,

Illustration:

TOBATRON

26 Legal Business June 2013

CULTURE

more apparent to those who deal with the firm, such as clients, suppliers, recruits or even alumni than those within. I always ma e a point of asking the firm's vacatj-on students to describe the other (tity firms where they had spent th summer. Their responses were always unequivocal. One firm as hierarchical and formal, anothL~ open and honest, some pompohs, others warm or cold and so on Given that they had been enga ed in a two-week programme at e eh firm designed in part to showc se its attractiveness as a potential employer, and that the firms themselves were largely simil businesses, it was striking ha different each one had felt to t ese students. This might seem to be a pretty uninformed view whe seen through the lens of a universit student, but, in my experience culture is embedded widely] a business and its influenc and effect is often more app rent further down a busine s than it may be in the partners' boardroom However relucta t we may be to exami e our business culture , it is clear to me that organisations, and l<ljw firms in particular, build strong and distinctiv cultures which, like ur natures as individua s, have a very significa t influence on how businesses develop evolve. Culture act driver and a brake therefore it is prett obvious that it is 0jlY by having a clear and h nest understanding of th se factors that a busines can maximise its potentiaf understand its limitati ns, assess risk and bring about, or adapt to, change. How cultures are created is an interes ing subject in itself but believe that if one ants to get an understa of one's business culture, it is neces ary to ask some simpl questions. What oes

believe? What is important to the business and how are those important things interpreted and played out in the way the business behaves? What are the strengths and what are the necessary and corresponding vulnerabilities that attach to those perceived strengths? I joined the board of a small business some years ago that made a big play about the strength of their collegiate culture and it was clear that this was something that was deeply treasured by everyone. Indeed, it was part of the attraction for me in joining the board. However, as a newcomer, it became apparent that there was a reluctance to address issues of underperformance based on a fear that confrontation would in itself damage collegiality, whereas, of course it was the underperformance which was threatening their culture and not the confrontation. Once we recognised that collegiality was built on mutual respect and trust and not simply 'getting on', confronting the performance issues became easier and acceptable because we were acting consistently with our beliefs and values. The most robust business cultures are those where there is the closest connection between what they hold important and how they behave. It is not, in my view, a question of being good or bad, but being honest and genuine. For instance, a firm that recognises that it is a collection of egotistical bastards, only recruits bastards, rewards bastardly behaviour, and sacks anyone who demonstrates any common humanity may hardly be equipped for the care sector. But it will be more effective as an organisation and be clearer in its strategies, management and decision-making than a business that has rather more admirable aspirations and beliefs, but practices something different. In those latter businesses, strategies built around unconnected aspirations can become difficult to effect as the behavioural norms within the business can get in the way. This leads to management

and we all know that that has limited effect in a law firm. A business plan or strategy built on what a business demonstrably finds important, using the drivers in the culture, has a far greater chance of being properly executed and achieving its goals. What I have also come to recognise is that culture needs constant examination and management in order to ensure that it doesn't OSSifyor change, by neglect, in ways which are inimical to the continued success of the business. For all the beneficial power which culture can exert, it can have an equal and opposite effect, as every strength carries a vulnerability and vice versa. I am convinced that much of what we have seen in the financial sector is an emanation of a strong performance culture that was allowed by poor management to get out of control. Performance cultures by necessity carry risks and you can't eliminate them but you can build behaviours that mitigate the risk, provided that you have taken the trouble to understand the culture in the first place. The pace of change in the legal landscape is accelerating and the strategic agendas for all firms are becoming more challenging and pressing. I believe that those firms that absorb and adapt best to the changing environment are those who have a profound understanding of themselves, not just in terms of their skills and services but the strengths and weaknesses of their culture. Those who don't have such an understanding encounter greater difficulty in navigating through change as, to a large extent, they are flying blind. If it all feels too ethereal or metaphysical, might I suggest putting down the BlackBerry and cross-examining those vacation students. The author was afounding partner oj5I Berwin and senior partner between 1992 and 2006. He is currently chairman of 5avile Group and legal mentor at IDDA5. Other current roles include a non-executive directorship ofRathbone Brothers and a trusteeship of the English

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by megaphone and exhortation

National Opera.
June 2013 legal Business 2.7