Sprint, Poster Child for Dysfunctional Culture
Sprint became an early and dominant player in telecommunications. They seemed to have it all going for them, as they built a headquarters campus roughly the size of Paris. It turns out that they should have spent that money on fixing their culture and its strategy (culture’s natural outflow).
Since 2007, when the current CEO took over to “fix” the company, the S&P has lost roughly 18% of its value. Sprint has lost 80%. Their current “strategy” involves paying $600 for IPhones (over $30 billion worth) and selling them for $200, which should give them a breakeven point around the mid-point of the century. The board, we’re told, wrestled with this. The real question is, “Why weren’t they laughing?” They do have a parallel strategy – suing AT&T over its potential merger with T-Mobile. You know when your approach to competition is to use the federal government as a hammer on your peers that you are at the ugly end of your life. As a bonus, they’ve managed to get the approach to lawsuits changed, so the government can now allow, invite or encourage competitors to join in anti-trust suits.
What went wrong? The same thing that continues to go wrong. James Carville told Bill Clinton that “It’s the economy, stupid.” In organizational life, “It’s the culture, ….” Sprint is notorious for paying people a lot of money to do nothing, creating a non-competitive, entitled culture. At the same time, it managed to change course and lay off so many people so many different times that it created a personally competitive, fearful culture. A lot of people with no real voice, fighting to be the last one standing.
Culture is king. If it is designed well, it can lead to great things as you go about Building Passionate, Thinking, Pure-Performance Organizations. Smart, experienced people – of which Sprint has had very many – can commit, trust, challenge, innovate, and talk about the truth, all on the way to building something that doesn’t make incomprehensible decisions and take wildly unproductive actions. I have met many current and former Sprint employees, and I almost always think 2 things: 1) What a potential powerhouse, and 2) What a waste. Good people get locked into the pay and benefits, even as they get locked into a cultural death spiral.
What’s the solution? It’s all about what we call Cultural Design. We have spent nearly 30 years looking at hundreds of organizations and thousands of leaders up close and personal. We’ve seen what works and doesn’t work to produce a culture that not only yields pure-performance but does it in a sustainable and continuously renewable way. The Sprint board made the mistake of thinking it was all about marketplace strategy and having a strong CEO who likes to be on television. But it isn’t. It’s all about a culture that is so strong, so dynamic, so honest, so intelligent, so focused on results that if there’s a way to win it will find it.
Sprint is a current extreme example of dysfunctional culture, but great leaders realize that the default position on culture is dysfunctional. Without design, without building in the 40 attributes that define a truly winning culture, as a leader you get whatever human nature can serve up – seldom at its best, often at its worst. With good design, as long as you have a real market to serve, good results are as sure as the turning of the earth.
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