Sunday, November 13, 2005

Drake Case

The Drake Case is so typical of new company start-ups. It begins with people who are not satisfied with their current jobs. They all get together and find solace with others who feel the same way and are sure that they can do better. So they set out to create the kind of company that “should” exist. They don’t want any of the bad characteristics of their current employer and are sure that a few simplistic principles will help them solve their problems.

However, once they start the company they discover several important lessons. First, they themselves have tutored in the ways of their former employers. Many of the situations they face are new to them and they have no experience except the last company. So they begin doing things the way their old employer did. Second, they underestimate the degree to which a company is former by the dynamics between the people. The company culture is not something that one person can force on a group. It is something that the group adopts in order to function. That adopted behavior is designed to allow people to function and deal with problems from their perspective. Third, the external business and social environment dictates many behaviors. Government regulations, financial reporting, work routines, and hundreds of other norms that are outside of the control of the founders come to play on the culture of the company.

The four founders of Drake may be able to avoid one or two mistakes at their former employers. They had better select the really important ones that have significant leverage. From these they are hoping to stimulate an organization in which the other employees will adapt other different behaviors. The CEO has already begun disrespecting and distrusting the person he hired to build the culture.

I suspect that the four founders do not really want a company that has a new culture for everyone, but just a new culture for themselves. Now they are the bosses, they set the rules, they get the attention, and they get the profits. The culture probably looks pretty good for them now, but everyone else may not be able to tell any difference.


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