The Flying CEOs:

Blindly Creating Industry Macro Cultures and Not Knowing It!

The Flying CEOs: Blindly Creating Industry Macro Cultures and Not Knowing It!

In November 2008, CNN media giant published: “Big Three Auto CEOs Flew Private Jets to Ask for Taxpayer Money”, and with that newsfeed exposed the practice of big business seeking governmental cash bailouts to survive yet failing to recognize that flying in lavish style, and getting caught, was a slap-in-the-face to the taxpayer. It not only exposed this pitiful practice of self-interest but also how industry macro-cultures shape the behavior of even those in the C-Suite.

CNN reported, “There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they’re (CEOs of General Motors, Ford and Chrysler) going to be trimming down and streamlining their businesses,” Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

“It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious.”

The US Congress, and the rest of America, were not impressed.

Now, what led these CEOs to fly in style, and unfortunately expose themselves and their organizations to the public backlash? Well, it all started with blindly adopting accepted norms and behaviors in the auto industry, and not thinking about or even considering the impact it has, or optics, with certain external communities, like the general public. These norms or practices, as in this case, flow from being part of and / or creating a macro-culture.

So, what is an industry macro-culture?

We often hear terms like organizational culture, business culture and corporate culture being used in reference to drivers or inhibitors of business performance.  An entire industry – management consulting – has even developed more broadly to help companies understand and, in some cases, improve their workplace culture!

We can broadly define contributing factors that shape culture as a set of values, norms or behavioral patterns that influence the way company workers interrelate and how the organization functions.

Within the management literature is a less-used term that may help us conceptually and contextually understand this phenomenon of the Flying CEOs:  inter-organizational macro-culture.  An inter-organization macro-culture are practices that extend across a common industry, such as manufacturing, banking, education, consulting, etc.  These macro-cultures can remain fixed for extended periods of time if no external stimuli are introduced, resulting in a detrimental influence on organizational performance, and by extension, industry performance.  External stimuli, or mitigating factors, can take the form of external culture experts to help uncover areas of deficiency and introduce new thought into the mix.  By bringing in external stimuli, companies or industries could break the curse of self-perpetuating paradigms.

The development of interorganizational macro-cultures often stems from the backgrounds of their leaders creating the norms.  In industries dominated by few companies, it begs the question if organizational norms exist, or more pronounced industry norms found within the macro-culture?  The old adage of an organization reflecting its leader is very appropriate when analyzing this concept.  The concept of interorganizational macro-cultures may be linked to the management of these organizations by managers that have shared experiences, values and norms through educational institutions, social networking and working within specific industries for extended periods.

Many organizational CEOs may have attended the same business schools or belonged to the same professional or industrial associations.  Perhaps these CEO’s have memberships to the same golf courses or frequent the same restaurants?  Inter-organizational values and norms held by managers within industries can significantly influence organizational cultures; minimizing the distinction between organizational practices within industries.  Even if an employee were to leave General Motors for a position at Ford or Chrysler, would the difference be pronounced?  Would this employee experience a ‘culture shock’?  Would leaving JP Morgan Chase to go to Goldman Sachs have the same effect?  However, leaving General Motors to JP Morgan Chase would certainly induce culture shock.  Private sector versus public sector.  You get the idea.

These inter-organizational macro-cultural dynamics may have dire consequences to industries that survive based on rapid adaptation to the consumer market and indeed may lead to the potential failure of entire industries.  The banking and automotive industries being recent examples.  If all the leaders interpret market signals, eternal influences and the dynamics of the industry in the same way, there is a strong likelihood that they will react in the same manner.  If this reaction is flawed, then the entire industry will suffer.

To the flying CEOs, it didn’t even occur to them that they were doing anything wrong…

Rzultz Tip to Reader: Change starts with you. In order to influence or change the way a team, an organization, a community, or even an industry behaves or leads, first think about the impact that you can have to create the change you want. It’s always about your results. Over and out!


Reference: CNN Article –