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The New Corporate Cultures.

The New Corporate Cultures By Terrence E. Deal and Alan A. Kennedy Published by Perseus Book, Reading, Mass, 312 pages, $26.00

TERRENCE DEAL and Alan Kennedy's The New Corporate Cultures: Revitalizing the Workplace After Downsizing, Mergers, and Reengineering, argues that the economic pressures of the last 15 years have destroyed the cultural fabric of many major corporations. While these cost-focused strategies have boosted short-term share price, the authors believe that long-term value may suffer, as executives paid short-shrift to the people in their organizations whom they rely on to get the job done. The book focuses on the effects of these managerial trends, with interesting anecdotes and relevant evidence.

In 1982, Deal and Kennedy collaborated on the pioneering Corporate Cultures: The Rites and Rituals of Corporate Life -- the work credited with putting corporate culture on the radar screen. In the years since, there has been a deluge of books on this now-mainstream subject, including John Kotter and James Heskett's Corporate Culture and Performance and James Collins and Jerry Porras's Built to Last. The latter two works supplied quantitative evidence to support Deal and Kennedy's original findings: They demonstrated that companies with strong cultures outperform "run-of-the-mill" enterprises by a significant margin. Given the slew of new works and the economic transformations of the past two decades, Deal and Kennedy decided to revisit the issue of corporate culture.

Their new book opens with a restatement of the thesis of Corporate Cultures: "Companies that focus on their people and create a social environment -- or culture -- in which employees can thrive achieve superior, long term business success." A robust culture, according to Deal and Kennedy, builds on shared values and beliefs held by both the company and its employees. A mission statement that incorporates these values must be etched into the consciousness of all employees, not etched into corporate coffee mugs, posters, and other meaningless "corporate graffiti." Ritual and ceremony ensure that a company's culture consists not only of intangible beliefs but also meaningful communal activities. An informal communication network reinforces these bonds on a day-to-day basis.

After outlining the elements of a robust culture, Deal and Kennedy detail how it has fared in recent years. The central part of the book contends that cost-saving measures practiced with increasing intensity have placed corporate culture "in crisis." Often, the only employee problem that gets significant management attention is stock-based executive compensation. Repeated downsizing leads to resentment of those re leased and acute insecurity of those remaining. The loss of corporate identity has not only gutted the workplace of meaning; it has fostered hostile relationships between employer and employee.

The final and most constructive part of The New Corporate Cultures outlines the various measures that senior management can take to help rebuild fragmented cultures.

Deal and Kennedy draw their anecdotes and examples from a consistent set of companies primarily in the airline and computer industry. While this makes the book an easier and more entertaining read, one cannot help questioning if their assertions apply to other companies and other industries.

Throughout their diagnosis of the current crisis in corporate culture, Deal and Kennedy attack "young consultants" who are usually the advocates of downsizing and other cost-saving strategies. Their critique never progresses further than oblique references and only weakens their argument. If consultants are part of the crisis, then their role must be explained; if not, why mention them?

Deal and Kennedy emphasize corporate culture to such an extent that the reader wonders if profit and profitability ever enter into their equation. Only after the book is more than two-thirds done do they protest that they "never argued that building and nurturing an appropriate culture was management's only mission."

Despite these problems, The New Corporate Cultures provides a penetrating assessment of the difficulties facing corporate cultures in the late 1990s. Deal and Kennedy not only diagnose these problems, they offer alternative models as viable solutions. The probing analysis of the modern employee's search for meaning in and out of the workplace ensures that this book is more than a sequel but an enduring contribution to management and leadership.

Marc A. Feigen is the managing partner of Katzenbach Partners LLC, a management consulting firm based in New York. He co-authored a DIRECTORS & BOARDS special report, "The Human Capital Audit: The Missing Element of Merger Strategy," released in July 1999.
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Title Annotation:Review
Author:Feigen, Marc A.
Publication:Directors & Boards
Article Type:Book Review
Date:Jun 22, 1999
Words:722
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