Recognise This! – A “successful” company culture in the short term can still lead to long-term organisation failure if the roots are rotten.
What do you do when you’re a fast growing, innovative and profitable start-up company ready to launch an IPO, but your negative company culture is a serious threat to your future success?
That’s the challenge faced right now by Zynga, makers of online games like Facebook’s Farmville and Mafia Wars. A New York Times article on this struggle noted:
“But that culture, which has been at the root of Zynga’s success, could become a serious liability, warn several former senior employees.”
These are just three of the results of the challenging culture at Zynga noted throughout the article:
- Employees are ready to leave as soon as the IPO is complete so they can cash-out on stock options. Competitors are already actively recruiting to this end.
- Other key employees have quit abruptly mid-project due to overwhelming culture.
- A highly prized acquisition target was lost (though Zynga offered far more money) because of concerns about the culture.
How has Zynga ended up in this situation? The insight of a competitor in the same industry (who themselves had to settle lawsuits brought by employees due to the culture and work environment) is likely correct:
“We’ve learned that when companies treat talent as a commodity, the consequences are severe,” said Ms. Toledano of Electronic Arts. “It takes years to repair a reputation.”
It takes years to build (or rebuild) a culture, too. I outlined how organisations can do so successfully at any stage of a company’s life, and organisations with such cultures would do well to take note. As the article points out:
“Zynga has made efforts to change its ways. … Still, rivals say Zynga will have to do more to bolster its image, or risk losing its appeal as an employer at a time when resources are scarce. Zynga’s towering public valuation — a boon for investors — may only further dissuade recruits, who may turn to younger start-ups with more potential.”
It’s not too late for Zynga. The article also points out ways the organisation is working to turn around its culture, including manager training and coaching (from the CEO on down) on how to better motivate, inspire and engage employees. I would also strongly encourage Zynga to look at its employee recognition programmes to create a more frequent positive feedback loop that relies on the appreciation and recognition of peers as well as managers.
What kind of company culture do you work in today? Does it help employees achieve corporate objectives in a positive way (a culture of recognition) or does it crack the whip to wring the most out of employees regardless of the potential loss of talent and engagement?
