Robyn Massey: How important has corporate culture become recently?

James W. Cortada: For the past several decades, corporations have focused so much attention on satisfying stockholders and senior executives that they often forgot that there were also other stakeholders they needed to support: customers, communities in which companies operated, and society at large. Management is beginning to realize that they have to broaden who they serve—or get regulated, forced, and punished into doing so. Corporate culture—how a firm operates—is crucial to that transition from a narrow focus on stockholders to a broader stakeholder’s perspective. So examples of how this was—is—done successfully are urgently needed.

Massey: Why study IBM? Wouldn’t it be more relevant to look at, say, Google, Amazon, Facebook, or Apple?

Cortada: IBM has over a century of experience developing, implementing, and understanding the results of corporate culture at work—more than most widely known companies. It has lessons to teach us about what works, what does not, and what could. In the book, I show how IBM’s culture aligned with its business imperatives for most of its history, allowing it to operate with a variety of stakeholders in mind and not simply prioritize stockholders. I identify key lessons that managers can learn from IBM’s experience and apply to their organizations today.

Massey: How did you get interested in corporate culture? It sounds so fuzzy—especially since most executives want specific tactical recommendations, as you have argued in your earlier books about management.

Cortada: I spent nearly forty years working at IBM at multiple levels of management and divisions. That experience showed me what corporate culture is about, the way it works, and how it can be changed, improved, or damaged. I learned lessons, too, from the many customers and clients I worked with over the years. I am also a professionally trained historian—for years, I have been doing research on business history and writing books and articles about the role of information, culture, and IBM. Inside IBM pulls together all my findings in a narrative history of one of the iconic firms of the twentieth and early twenty-first centuries; it sharpens our understanding of what corporate culture is precisely about.

Massey: So, what are some of the topics you explore in this book?

Cortada: Let me begin by saying that, when you do such a study, your impression of a company really changes. In IBM’s case, the reputation of being a serious, no-nonsense, usually well-run firm changed in interesting ways. For example, from its earliest days, senior management had a good idea of what they wanted in their corporate culture because they had all worked in other firms that already had developed these. So, how management created that culture worldwide became an important story to tell. For another, I had to include chapters that explained how employees were trained, nurtured, and made successful for decades, and how their families were nurtured too, with benefits, medical coverage, and so forth. Employees were not always serious, so I have an entire fun-filled chapter on their humor and jokes; another that explains their rituals; and a third about what their stuff tells us, such as IBM-branded coffee mugs, pens, pins, and clothing. Because IBM wanted the world to think about computers the way it did, I include a fat chapter covering its century-old massive publishing program, which I argue made IBM the second largest publisher in the world after the U.S. government. I include a chapter on corporate values and image, too. At IBM, these two issues bordered on religious belief, motivating employees to do the “right thing” by their customers, communities, and societies in over 150 countries. There is so much to talk about thatI could have made this book twice as long.

Massey: What advice would you give to other companies about corporate culture?

Cortada: First, the day a company or government agency comes into existence—and I mean that day—so too do the beginnings of a culture inside the organization. So, you have a choice: let it happen on its own by accident and hope for the best, or develop it purposefully by articulating corporate values, describing expected behaviors, and implementing programs and actions that support your intentions. Second, there is a great deal of business and psychological research that can be applied effectively to develop and nurture a corporate culture. Third, when you align your corporate culture with your business strategy and with the desires of the societies in which you operate, you increase the odds of being successful. Fourth, if you take your eye off the ball and let the culture deteriorate or change in ways that do not support a sound business strategy, then you run the risk of going out of business, or simply doing poorly. That happened to IBM in the 1980s and again in the 2010s. In both instances, cultural problems were faced and fixed, and financially the company resumed its long history of success. Finally, the head of the firm must personally lead the development, implementation, and monitoring of culture; every employee must take responsibility, too, for living it and improving its effectiveness. Anything less by either party will condemn the organization to failure. In short, take corporate culture very seriously.

 Massey: I noticed that you included several chapters on what you call “material culture.” What’s that all about?

Cortada: A big point I make here, largely for business historians and professors of business management, is the same point made by archeologists: objects give a society (or a firm) an identity, and they communicate values and messages—so it is worth studying them and using them. I describe the links, for example, between corporate cultures and lapel pins and coffee mugs. Archeologists and sociologists have known about the links between objects and cultures for two centuries—and they apply to businesses too, not just to ancient civilizations. I include an entire chapter on the role of IBM postcards and how they helped bond customers to IBM for decades—yes, that’s postcards of factories! Secret: every major American and European country used postcards too, along with baseball caps, mugs, and logoed pads of paper.

Obviously photocopied cartoons and sarcastic emails are also part of the material culture story, such as when someone makes snarky comments or draws cartoons critical of managerial practices and bureaucracy. The lesson for management is that stuff delivers messages. I know that when I walk around wearing a beat-up old IBM baseball cap that (a) I am a human billboard for the company at no cost to it and (b) because it is weather-worn, you could assume I know a lot about computing, fixing your next door neighbor’s PC, or downloading an app on to your phone. All of that, of course, should be seen as an overstatement of my capabilities, but not the fact that you are reminded of the existence of IBM when wandering around a farmer’s market on a Saturday morning!

Massey: What would you say are the top three things you’d like the reader to take away from your book?

Cortada: First, corporate culture is real. When it is well managed and used, it can improve an organization’s performance, and when it is not, it can seriously harm performance. Second, there are proven ways to leverage corporate culture, and IBM’s experience demonstrates best practices and lessons for all manner of organizations. Third, as enterprises are compelled by regulators, customers, and societies to contribute more than simply profits for stockholders, how they leverage their corporate culture will determine their fate. There really is no other option because large enterprises really do need to align with the values and expectations of their markets and the societies in which they operate. That is hard to do because it often involves playing the long game, avoiding the quarter-by-quarter mindset that has been instilled in generations of managers in order to meet the needs of more people who are affected by your products and services than you might otherwise have to deal with. I end the book with a chapter-length summary on achieving corporate success through strategic use of corporate culture, citing IBM’s long experience.

Massey: You have been a student of business practices and corporate culture in high-tech industries for a half-century. Do you think the recent buzz about AI will affect corporate culture? Are there any final messages you’d like to share, in general?

Cortada: Funny you should ask about AI because I am currently studying the role of information as it exists today and, obviously, in relation to AI. While AI has made a recent leap in its ability to interact with humans in the way people think and talk, it has been developing and evolving over many decades. So, everyone take a deep breath. History teaches us that (a) AI capabilities will be used incrementally—if quickly—as a tool as its functions improve; (b) folks pushing fake news will use AI as much as folks who want to use it as a productive tool; and (c) AI will be used to define, shape, and either help or hurt corporate cultures. It will join the humble company baseball caps and coffee mugs as part of corporate culture in action.

Finally, my work on corporate culture is not over, so I include my email address in the book and ask that readers continue the discussion—write to me.