Catch-22 of Strong Corporate Cultures: GroupthinkArticle published on October 12, 2015
By Clare Trapasso
Asset managers may strive to craft strong corporate cultures to help differentiate themselves from competitors, but shops don’t want a workforce of lemmings, either.
Firms such as AB (formerly known as AllianceBernstein), Morgan Stanley, Putnam Investments and Broadridge Financial Solutions strive to keep their cultures from falling subject to Groupthink, with tactics ranging from rewarding managers who encourage staff to express opinions to having C-suite executives meet with employees of all levels to gather input.
“[Combating] Groupthink is really about making sure managers value diverse thought and see the business case for diversity,” says Peg Sullivan, global head of talent management at Morgan Stanley. Such diversity transcends race and gender to include communication style and problem-solving approaches, she says.
Morgan Stanley kicked off a culture program earlier this year where about 1,800 global managing directors at the New York–based wirehouse met for half-day sessions to discuss the importance of the firm’s culture and how to build upon it.
Those conversations are now happening among the firm’s 56,000 employees in 43 countries, says Sullivan. The company is tracking the conversations to ensure that each division and office is thinking about the firm’s culture.
New staff training and performance reviews of managers incorporate elements meant to reinforce the importance of fostering an environment where people feel free to express their opinions, she says.
“We encourage people to challenge one another,” Sullivan says. “That’s how you get the most innovative ideas.”
“A lot of companies will hire people more for fit, which means they hire people more like them,” she says.
Managers need to bring on individuals with a mix of experiences and backgrounds and be careful not to ostracize those who challenge the status quo. Otherwise, workers with opinions are apt to bite their tongues.
“Groupthink can lead to disaster,” she says.
One sign of a culture of too much of the same can be when parties come to consensus too quickly. She recommends that when a decision needs to be made, groups split into two teams to argue each of the pros and cons.
“It’s easy to convince ourselves we’re doing the right thing when everyone is arm-in-arm on it,” Shirkani says. But “that causes you to miss out on other perspectives or different ways of approaching problems.”
Putnam CEO Bob Reynolds regularly holds small group meetings with randomly selected employees across the organization to solicit their feedback on the company and what it could be doing better.
The Boston-based shop also holds town hall meetings where staffers are encouraged to ask questions and share their concerns.
“If someone’s comfortable at work and they like being here and they’re not afraid of their boss, they’re more likely to give you an idea on how to do something better,” says Peter Curran, Putnam’s chief of human resources.
Talented employees should be given the autonomy, resources and freedom from day-to-day busywork so that they can innovate, says Rich Daly, president and CEO of Broadridge Financial Solutions.
“You can’t just do the same thing over and over again and expect to be successful,” Daly says. “If you want to do things differently, you need to create a different environment.”
Employees with a vision for doing things differently should show how their ideas can be implemented and get buy-in from colleagues before presenting it to a manager, says Willemien Kets, an economics professor at the Kellogg School of Management at Northwestern University.
For those who want to counter ideas, Penumbra’s Shirkani recommends building business cases around their opinions, “instead of just saying, ‘I don’t agree.”
Managers should remember that differences in opinion don’t always signal cracks within a culture, says Kets. Robust cultures typically foster trust among clients and streamline expectations for how employees communicate and will be rewarded and treated.
“You want a strong culture, but also a culture that stimulates people to do things differently,” Kets says.
Three years ago, AB began holding focus groups and meetings to ask senior employees across departments what they believed the culture to be. CEO Peter Kraus then discussed the company's values with employees as he traveled to various AB offices.
“You can have a strong culture, but not necessarily a good culture,” Ashish Shah, AB’s head of global credit and chief diversity officer. “You want everyone growing in the same direction. You also want to make sure that everyone understands the standards with which you’re expected to operate.”
Partners at the organization meet with senior VPs quarterly to discuss, among other things, where the firm is falling short in its culture and where it is doing well. Over the last year, AB has also begun to train senior leaders on how to be inclusive.
A mix of role-playing and lectures aims to teach managers to recognize their own biases, such as the weight they place on statements made by soft-spoken employees compared to those delivered by staffers who speak up. They are also encouraged to solicit feedback from quieter team members.
Clare Trapasso is a print and multimedia journalist at the New York Daily News with experience writing breaking news and feature stories in urban and rural communities.“Making sure you’re asking people’s opinions, even if they haven’t been offered, is absolutely critical,” Shah says. “You have to have a culture that actually values that diversity.”
As a general assignment reporter on the Daily News’ Queens Bureau and Metro Desk, she covers everything from schools being closed, to naked bike rides, to grisly murders, local politics and everything in-between.
Prior to that, she was an Associated Press reporter in the wire service’s New Hampshire Bureau. During the six-month assignment, she covered state and national news and put together several multimedia projects. She also edited stories and wrote broadcast news.
She became passionate about journalism at the State University of New York at Purchase College, where she graduated with a B.A. in journalism in 2002. In her senior year, she created a campus women's newspaper called The Cycle.
After receiving her undergraduate degree, she joined the Peace Corps. She was sent to Independent Samoa in the South Pacific, where she learned Samoan and taught college-level journalism classes in the capitol.
When she returned to America, she began graduate school. In 2007, she earned a M.A. in Journalism from New York University. As a student, she interned for the Daily News and The Village Voice. After graduation, she did an internship in the Associated Press New York City Bureau.
Clare Trapasso is interested in writing stories that can effect change. She can be contacted at email@example.com.