Culture within a law firm—or any company, for that matter—is created organically and gradually.
Although founding partners and CEOs can try to mold and move its business culture in a certain direction, ultimately, culture becomes the product of multiple employee personalities and professional decision-making over time.
The idea that business profits and successes are often intertwined with the type of culture a firm espouses can be a terrifying thought for powers-that-be. To improve business practice, do you look to change your firm culture? Or, do you change your future plans around the culture that’s already been established?
Recently, the Harvard Business Review Blog wrote a profile about the culture of one of America’s largest healthcare companies, Aetna. Apparently, in the early 2000s, Aetna was in a financial bind, bleeding $1 million each day to cumbersome processes, gigantic overhead costs, and some unwise business acquisitions.
“Many of the problems Aetna faced were attributed to its culture—especially its reverence for the company’s 150-year history,” wrote the authors for the HBR Blog.
“Once openly known among workers as ‘Mother Aetna,’ the culture encouraged employees to be steadfast to the point that they’d become risk-averse, tolerant of mediocrity, and suspicious of outsiders.”
See, steadfast and risk-averse are not necessarily bad for business. But, when Aetna looked to grow—to merge with a lower-cost healthcare provider, U.S. Healthcare, and all the processes that came with it—the conservatism of Aetna’s employees clashed with the more aggressive strategies of its new business partner.
And, slow and steadfast became synonymous with lazy and low-yielding. Losses made it ever more apparent that something—or somebody—had to give.
When John W. Rowe, MD, assumed Aetna’s fourth CEO position in five years in the late 2000, eyes rolled. But, unlike his predecessors, Rowe was able to turn around the business in three key ways:
- Rowe sought feedback from employees at all levels to provide input on business strategy and change.
- Rowe listened and applied these conversations to a financially-sound and realistic business plan.
- Rowe presented his plan for a turnaround to the company’s employees in a way that fit with the culture—as opposed to fighting it.
“This time, without ever describing their efforts as ‘cultural change,’ top management began with a few interventions. These interventions led to small but significant behavioral changes that, in turn, revitalized Aetna’s culture while preserving and championing its strengths,” explains the HBR Blog.
“For instance, the New Aetna was specifically designed to reinforce employees’ commitment to customers—reflected in the firm’s history of responding quickly to natural disasters. Rowe also made a point of reinforcing a longtime strength that had eroded—employees’ pride in the company. During one question-and-answer session, a longtime employee said, ‘Dr. Rowe, I really appreciate your taking the time to explain your new strategy. Can you tell me what it means for someone like me?’
Not an easy question. After a thoughtful pause, Rowe replied, ‘Well, I guess it is all about restoring the Aetna pride.’ He got a spontaneous standing ovation from the hundreds of attendees.”
Too many companies try to change and revamp culture to fit business strategy, as opposed to the other way around. When culture is, in fact, frequently the best accelerator and energizer for CEOs, according to the HBR.
But, in addition to this important point, the story about Aetna’s turnaround also contains valuable lessons about leadership as demonstrated by Rowe.
First, employee feedback—especially at low ranks—affects firm policy in a positive way.
It can’t be said enough that total employee satisfaction leads to higher monetary returns.
Plus, leaders are often too far up on the professional hierarchy to see or understand the flaws in their plans on the ordinary, everyday level. Thus, associates, of every degree of experience, should be given a voice, representative, and seat at the business development table.
Second, Aetna perceived its conservative culture as a liability, not an asset. Law firms may struggle with the same mindset—that tradition is less valuable than new technology or change.
Not so. In fact, Rowe realized that Aetna’s longtime strength—commitment to customers, patients and physicians—was the missing link. Once he resurrected Aetna’s priority in people, the company took off and its culture rose with it.
In law, maintaining a personal and loyal relationship with your clients is key to success. Business incentives are not always tangible—at its base, law is a service industry job. Aetna remembered to give precedence to the needs of its customers, as law firms should, too.
Finally, Aetna knew it needed change. After all, constant innovation is vital for company growth. But, depending on your culture, this change may need to arrive over time. The pace by which a company innovates is unique.
Younger, more liberal law firms may be able to embrace change more quickly than older, more traditional ones.
When it comes to culture, there exists a vast spectrum of professional values. Like Aetna and Rowe, law firms should identify, embrace, and then reinforce its cultural values when creating business strategies for a more successful future.