What is the potential impact of an organizational culture in which employees tell their bosses what they WANT to hear instead of what they NEED to hear? Or one in which they don’t speak up at all?

What happens when an organization maintains a traditional, old-school, top-down, command and control, management-based culture rather than a more open and transparent, cutting-edge, bottom-up, leadership-based one?

One vivid example is the current crisis at Samsung as detailed in today’s New York Times article, “Samsung Galaxy Note 7 Crisis Signals Problems at Korea Inc.” – although better described by the article’s print edition title: “A Top-Down Breakdown: How a Rigid Culture May Have Helped Lead To a Crisis at Samsung.”

Among the key points mentioned in the article (summarized/paraphrased below) regarding how Samsung’s dysfunctional culture contributed to, if not caused, its current crisis:

• Samsung, like South Korea as a whole, fosters a rigid, top-down, hierarchical, micromanaging, hidebound [i.e., unwilling or unable to change because of tradition or convention] culture that stifles innovation, buries festering problems, and evades accountability;
• Samsung engineers and mid-level managers are seldom allowed to second-guess management goals set by senior-level leaders…and their “no questions asked” corporate culture has grown more inflexible in recent years;
• Managers constantly feel pressured – out of fear of losing their jobs – to prove themselves through the accomplishment of short-term goals at the expense of long-term objectives;
• Supervisors often use harsh and violent language when communicating with their staff, creating a climate of fear and intimidation;
• Racing to accomplish over-ambitious goals in order to get the Galaxy Note 7 to market, extensive product testing and other safety-related measures related to the design and manufacture of the modified batteries were disregarded;
• And in its race to beat Apple, Samsung, rather than innovating new products, pushed its existing technologies beyond their limits to the point of failure;
• South Korean culture encourages and expects top talent to enter and adopt the norms of companies like Samsung, rather than possibly launching their own start-up companies, thereby further inhibiting entrepreneurship and innovation. As the article states, they are trying to identify and appoint the next Steve Jobs, rather than creating a societal culture that would enable and empower the next Steve Jobs to emerge.

In one of my favorite business books, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't (apologies for the language, but that’s the title) by Stanford management professor Robert Sutton, he tells this memorable story based on the research of Harvard’s Amy Edmondson (who coined the term “psychological safety”) regarding the impact a toxic organizational culture has on the behavior of its employees:

The results of a hospital leadership and productivity study determined that nurses who worked for administrators who had been identified as good leaders committed MORE (not less, but more!) mistakes than those who worked for bosses who were identified as jerks (i.e., a-holes). The initial conclusion: Managers who are tough jerks – even if it may be unpleasant to work for them – got the best results from their people.

Although, not quite.

Upon further analysis, what the results actually revealed was that the nurses who worked for good leaders did not MAKE more mistakes – they REPORTED more mistakes when they were made! This way they could be remedied, documented, learned from, and not repeated. They were encouraged to, and rewarded for, bringing mistakes out into the open rather than sweeping them under the rug.

The nurses who worked for the jerks lived in constant fear, and were so terrified of acknowledging or admitting mistakes when they occurred that they did everything possible to ignore them and/or cover them up for fear of the repercussions.

So the question is: What are you measuring and rewarding in your workplace: mistakes COMMITTED, or mistakes REPORTED? And are you creating a culture of openness and accountability and trust where people feel free to speak up and speak out…or are you the next Samsung waiting to happen?

Similar stories have been told about co-pilots who failed to speak up to more senior pilots when they could and should have, resulting in crashes; students not speaking up to teachers if/when the teacher may be wrong; children not feeling empowered to question their parents, etc. When there is hierarchy, when there is an imbalance of power and/or rules against questioning authority, when there is a culture of fear and intimidation, when there are penalties for speaking up, or for speaking out of turn, or for being wrong, you are potentially creating a recipe for failure…and even disaster.

As management guru Peter Drucker wrote: “What gets recognized and rewarded is what gets done.”

There are many lessons we can take from the Samsung story, but as my professional focus tends to be on management, leadership, teams, organizational development, and innovation, the question I’d like to leave you with is this:

What kind of culture and climate is your organization creating, through its norms and practices…and are you creating a culture of ownership, empowerment, accountability, and leadership at every level…or are you in the process of writing the next cautionary tale?