Any organization, any human organization, from a family, a village, a nation, develops its own culture over time. From the smallest family business on the corner to global multinational companies. operating in many countries and time zones, over time each corporation develops its own unique identity. Now a lot of organizations try to develop a foundation. that's based on core values.
As you see in this slide, here's a set of core values that came from the annual report of a leading corporation. They're good ideas. They're things like communication, respect, integrity, excellence. Who could argue with those?
Those corporate values are engraved in stone in the corporate headquarters and appear... in their annual report. But it's important for us to remember that those are Enron's corporate values. Just because they stated the corporate values didn't mean they lived them and that had severe consequences for the corporation, for its people, and for its customers. The lesson from that is that not only do we have to aspire to a set of values and principles that are at the core of our organizations.
but we also have to make sure that we walk the talk and put those ideas into action. There are many different definitions of corporate culture, and here's some of our favorite ones to get our discussion started. The first one is that culture is the way we do things around here. That means it's hard to explain to outsiders.
You have to be here for a long time before you know just how things do work around here. and there's this unique characteristic of every organization that's hard to imitate. It develops over time, and you create a unique identity for your corporation.
Second definition is that culture is the code, the core logic, the software of the mind that organizes the behavior of people. It's about the mindset. Until we have the mindset, we can't take the innovative new action.
structures and plans that we need to put our strategy into action. So first comes the mindset, then comes the behavior and structure. Together with those we create a system that guides our organization.
The third definition here is that culture reflects the lessons that we've learned in the past that the leaders think are important enough to pass on to the next generation. next generation. So the lessons are learned through hard work over time and we make decisions about what do we pass on, what's the wisdom that we pass on for the next generation in our organization.
And the last one, my favorite definition, culture is what we do when we think no one's looking. In our hearts and minds, we have some priorities, we have some principles ourselves, we have some learned resp... responses and good old human nature that determines how people will behave when no one's looking. If you don't create that type of mindset, behavior, and value system in the people in your organization, you're at a distinct competitive disadvantage.
One way to think about the culture of an organization is that it's like the iceberg that's pictured in this slide. Only about 10% of it's above the water that's visible that we can see at the first glance, 90% of the icebergs below the water. We don't see it until it's too late. When you hit the iceberg, the part that sinks the ship is the part below the water that we don't see.
That's what you as a leader need to understand and to manage, that what we see above the water is reflected in the values, beliefs, and assumptions that have built up over time and then that are not visible to us the first time that we look. As the next slide shows, these values and culture are built up over time, and they represent the lessons that we learn that we think are important to pass on to the next generation. It's this interesting mix of both the lessons and the survival process that we're learning as we survive, as a team, as an organization, as a group, and that's what we're doing. we preserve over time and pass on to the next generation. That means that as a leader, we're always trying to understand how the values that we've created in the past, because in some ways culture always has to be looking backwards.
That's where we came from. That's our history. That's where the principles were developed.
But as leaders, we also have to be experts at projecting those values into the future and adapt. and changing so that the values of the past that form our foundation help us to meet the challenges of the future.