In the eyes of the law, a company is a person. It has various legal rights: it can own property, it can sue or be sued, and so on. But does a company have a personality in more than a legal sense?
Yes, say some observers, though their understanding of what makes for a corporate personality varies. The 2003 documentary film The Corporation, for example, contends that if companies could be put on a psychiatrist’s couch, they would be diagnosed as psychopaths. On a more constructive note, Decision Technology Group, a British research group, recently created a four-factor model (Honest, Innovative, Prestigious, Powerful) that defines corporate personality as how companies are perceived. The group reports strong correlations between the four factors and various financial measures; profitability is related to prestige, for example, and total shareholder return is associated with honesty.
Here in the United States, management consultants at Booz Allen Hamilton Inc. operate a Website profiler that enables companies to identify themselves as one of seven distinct types, ranging from Passive-Aggressive (very bad) to Resilient (very good). And Sandra Fekete, president of Fekete & Co., a Columbus, Ohio-based marketing communications firm, has developed a diagnostic tool that classifies corporate personalities along the lines of the well-known Myers-Briggs instrument used by many personnel departments. To make the results more concrete, Fekete may help a company translate its assessment into a persona — in the case of one construction company, “Pop,” an ultradependable fellow who wears jeans, loves rare steak and cold beer, watches David Letterman and “60 Minutes,” and prizes his reputation.
No doubt many businesspeople will regard such notions as nothing more than consultants’ fantasies. But Fekete and Gary L. Neilson, senior vice president in Booz Allen’s Chicago office, say their assessments have converted many skeptics. Invariably, they say, CEOs validate the corporate personalities revealed through self-assessments, even when the revelation may come as a surprise to them. And the assessment is more than a mere exercise: corporate self-knowledge, say consultants, is essential to running a business.
“The CEO’s job is to help that [corporate] person become all it can be, and the [management] team is there to help that person, too,” says Fekete. Among the important benefits that come from recognizing the corporate personality, she says, are consistency of mission, a shared framework for decision making, an understanding of information gathering and work style, and an ability to identify who the company’s ideal customers, employees, and suppliers are.
Sick or Healthy?
“I believe it’s definitely real,” says Neilson when asked whether companies have a distinct personality, or identity. According to Neilson, a company’s personality almost always belongs to one of four “unhealthy” kinds — Passive-Aggressive, Fits-and-Starts, Outgrown, or Overmanaged — or three “healthy” types: Just-in-Time, Military Precision, and Resilient. (He notes that most companies are mosaics of more than one type, with one personality trait dominating.)
The seven organizational types evolved from Booz Allen’s collective consulting experience, says Neilson. They are shorthand explanations of “why some companies hit the ground running, while others stumble over their shoelaces.” Corporate personalities are formed by combinations of four key factors: decision rights (who decides what), information (who knows what), motivators (how people are rewarded), and structure (what the organization chart looks like).
At one end of the personality spectrum is the Passive-Aggressive company, where building consensus for change is easy, but actually implementing change is hard. Accountability is ill-defined, while performance information may be scattered or in silos. Incentives may reward the wrong things or send mixed messages. And the organizational structure tends to be overlayered.
“The passive-aggressive company often forms over 30, 40, 50 years,” comments Neilson. Even after identifying the problems with the four factors, it’s difficult to set such a firm in the right direction, says Neilson, “unless there’s a big shakeup.”
At the other end of the spectrum is the picture of health: the resilient company. Here, everything is well aligned. Employees know what they are responsible for, and motivators encourage desired results. Information is passed seamlessly across the company. “The leader may not be charismatic, but he gets things done,” says Neilson. “There is a clear environment of accountability.”
Two years ago, Booz Allen had the bright idea of composing a 19-question “organization personality” test based on the four factors and posting it on a Website (www.OrgDNA.com). Since the profiler went live in December 2003, Booz Allen has recorded some 35,000 responses, representing more than 1,000 companies in 23 industries. Unfortunately for Corporate America, most respondents belong to one of the unhealthy types. (Booz Allen does not collect information on specific companies.) But the good news, says Neilson, is that unlike people, companies can change their personalities.
Since companies do have different personalities, solutions to their problems will necessarily vary. Neilson warns of falling into what he calls the “GE trap” — adopting a business practice simply because an admired company like General Electric uses it. “The idea is to understand who you are,” says Neilson, then find a fix tailored for that particular corporate person. (Neilson and co-author Bruce A. Pasternack describe their typology and approach to organizational change in a book to be published later this month, called Results.)
Consensus of Experiences
To Sandra Fekete, who authored a book called Companies Are People, Too, no corporate type is right or wrong, good or bad. That attitude reflects the philosophy of the Myers-Briggs Type Indicator personality inventory, which she has adapted to assess corporate personalities in four respects: organizational focus (extroverted or introverted), information gathering (sensing or intuitive), decision making (thinking or feeling), and work style (judging or perceiving).
Since 1998, Fekete and her associates have helped more than 200 small and midsize companies, including all of her clients, discover what kind of personalities they have. No interviews are required; selected employees individually complete an assessment comprising 84 questions, each with two possible answers. (Sample: “Our company reacts to change: [a] quickly, [b] after giving it some thought.”)
The results are aggregated and expressed in one of the four-letter types of Myers-Briggs. There are 16 possible personality types, and so far Fekete has found 13 among the companies taking the test. For example, “Pop,” aka Elford Inc., a Columbus, Ohio-based construction company, has an ESTJ personality that amounts to a “playing-by-the-rules” company. “They get in the trenches, they roll up their sleeves, they’re with you every step of the way,” comments Fekete.
Do prospective test-takers ever find this personality stuff a little, well, silly? “That’s pretty common, actually,” says Fekete. But she adds that every company that has undergone the assessment has agreed with the results, no matter how unexpected. Indeed, those who might assume that a company’s personality reflects its CEO’s are in for a surprise: such a match happens in only 15 percent of cases, says Fekete. In Elford’s case, the first CEO who took the test was an “options-open” type, she says, in contrast to the company’s logical, no-nonsense personality.
Moreover, in four cases out of five, the CEO sees the organization differently from the other employees who take the assessment, says Fekete. “That’s a big ‘Aha!’ moment,” she says. Such a disconnect may be the source of blurry strategic focus or operational confusion. But once everyone is on the same page — once the traits and preferences of the corporate personality are compared with those of management and employee teams — a company can finally begin to become the person it truly wants to be.
Edward Teach is articles editor of CFO.