Artifacts—Encountering Ciba-Geigy

My initial encounter with this company was through a telephone call from its head of management development, Dr. Jürg Leupold, inquiring whether I would be willing to give a talk to its annual meeting in Switzerland. Ciba-Geigy invited their top 40 to 50 worldwide executives along with one or two outsiders to a three-day meeting held at a Swiss resort. The purpose was to review strategy and operations and to stimulate the group by having outside lecturers present on topics of interest to the company. Dr. Leupold had asked me to give lectures and do some structured exercises around my research on career anchors at the 1979 annual meeting of its top executives (Schein, 1978, Schein & Van Maanen, 2013). The CEO, Dr. Samuel Koechlin, liked the fact that this research had shown that people are in their jobs for different reasons (the career anchors), but that in each kind of job one could be creative.

Koechlin was Swiss, but he had spent part of his career in the company’s U.S. subsidiary and had become interested in all the emphasis he had observed in the U.S. culture on creativity and innovation. He requested that I visit him prior to the annual meeting to discuss how best to use the career-anchor exercise and to “test our chemistry with each other.” I made a special flight to Basel to spend the night with him and his family. We decided that the career anchor booklet and job or role planning exercises were to be translated into German so that all the participants could do the exercise and discuss their career anchors at the annual meeting. I would lecture and draw out the implications for creativity and innovation following the exercises.

I was “briefed” by further phone conversations with Dr. Leupold whose first name was Jürg, but I never felt it was appropriate to use that. I learned that the company was run by a board of directors and an internal executive committee of nine people who were legally accountable as a group for company decisions. The chairman, Dr. Koechlin, functioned as the CEO, but the committee made most decisions by consensus. Each member of the committee had oversight responsibility for a division, a function, and a geographic area, and these responsibilities rotated every few years. Both Ciba and Geigy had long histories of growth and had merged in 1970. The merger was considered to be a success, but there were still strong identifications with the original companies, according to many managers. The CEO of Novartis when I asked him in 2006 how the Ciba-Geigy/Sandoz merger went said: “That merger is going fine, but I still have Ciba people and Geigy people!”

My first visit to Ciba-Geigy headquarters offered a sharp contrast to what I had encountered at DEC. I was immediately struck by the formality as symbolized by large gray stone buildings, heavy doors that were always closed, and stiff uniformed guards in the main lobby. This spacious, opulent lobby was the main passageway for employees to enter the inner compound of office buildings and plants. It had high ceilings, large heavy doors, and a few couches in one corner to serve as a waiting area.

Upon entering the Ciba-Geigy lobby, I was asked by the uniformed guard to check in with another guard who sat in a glassed-in office. I had to give my name and state where I was from and whom I was visiting. The guard then asked me to take a seat and to wait until an escort could take me to my appointed place. As I sat and waited, I noticed that the guard seemed to know most of the employees who streamed through the lobby or went to elevators and stairs leading from it. I had the distinct feeling that any stranger would have been spotted immediately and would have been asked to report as I had been.

Dr. Leupold’s secretary arrived in due course and took me up the elevator and down a long corridor of closed offices. Each office had a tiny nameplate that could be covered over by a hinged metal plate if the occupant wanted to remain anonymous. Above each office was a light bulb, some of which showed red and some green. I asked on a subsequent visit what this meant; I was told that if the light was out, the person was not in; if it was green, it was okay to knock; and if it was red, the person did not want to be disturbed under any circumstances.

We went around a corner and down another corridor and did not see another soul during the entire time. When we reached Dr. Leupold’s office, the secretary knocked discreetly. When he called to come in, she opened the door, ushered me in, then went to her own office and closed the door. I was offered some tea or coffee, which was brought by the secretary on a large formal tray with china accompanied by a small plate of excellent cookies. I mention that they were “excellent” because it turned out that good food was very much part of Ciba-Geigy’s presented identity. Whenever I visited offices in later years in Paris and London, I was always taken to three-star restaurants.

Following our meeting, Dr. Leupold took me to the executive dining room in another building, where we again passed guards. This was the equivalent of a first-class restaurant, with a hostess who clearly knew everyone, reserved tables, and provided discreet guidance on the day’s specials. Aperitifs and wine were offered with lunch, and the whole meal took almost two hours. I was told that there was a less fancy dining room in still another building and an employee cafeteria as well, but that this dining room clearly had the best food and was the right place for senior management to conduct business and to bring visitors.

Ciba-Geigy managers came across as very serious, thoughtful, deliberate, well prepared, formal, and concerned about protocol. I learned later that whereas DEC allocated rank and salary fairly strictly to the actual job being performed by the individual employee, Ciba-Geigy had a system of managerial ranks based on length of service, overall performance, and the personal background of the individual rather than on the actual job being performed at a given time. Rank and status therefore had a much more permanent quality in Ciba-Geigy, whereas in DEC, fortunes could rise and fall precipitously and frequently with job assignment.

In Ciba-Geigy meetings, I observed much less direct confrontation and much more respect for individual opinion. Meetings were geared to information transmission rather than problem solving. Recommendations made by managers in their specific area of accountability were generally respected, accepted, and implemented. I never observed insubordination, and I had the impression that it would not be tolerated. Rank and status thus clearly had a higher value in Ciba-Geigy than in DEC, whereas personal negotiating skill and the ability to get things done in an ambiguous social environment had a higher value in DEC.

Analytical Comments. It was striking how different the initial encounters with this organization were from my first contacts with DEC and how hard it was from the beginning to determine whether this was a reflection of the Swiss-German macro culture, the effect of chemical technology (the basis of all their products), or the history of the company (which included the major merger of Ciba and Geigy), or the fact that the current leader had been “Americanized” through his years in the U.S. subsidiary.

I had the impression that things were very tightly organized and carefully planned; still, to meet Koechlin at his home with his family and spend the night contrasted sharply with my DEC experience. In my entire time as a consultant with DEC I never met any members of Ken Olsen’s family nor the families of any other executives. It highlights the fact that even a concept like “informal” or “formal” can mean very different things in different macro cultures.

Whereas in DEC, kitchens and food were used as vehicles to get people to interact with each other, in Ciba-Geigy food, drink, and graciousness were handled very formally and carried additional symbolic meaning having to do with status and rank. Various senior officers of the company were pointed out to me, and I noticed that whenever anyone greeted another, it was always with their formal titles, usually Dr. This or Dr. That. Observable differences in deference and demeanor made it fairly easy to determine who was superior to whom within the organization. It was also obvious that the tables in the dining room were assigned to executives on the basis of status and that the hostess knew exactly the relative status of all her guests. I got to know a number of these executives over the years but another artifact was that I had to learn not to greet them in the dining room. If they acknowledged knowing me it would tell their peers that they needed consultation help, which apparently might be seen as a sign of weakness.

I reacted differently to the Ciba-Geigy and DEC environments. I liked the DEC environment more but could not decide whether it was the congruence with my U.S. identity, my experience in DEC that valued my more informal style, or the excitement of being in a start-up setting helping a company to grow versus trying to influence a very old culture to become more innovative. In performing a cultural analysis, a person’s reactions are themselves artifacts of the culture that must be acknowledged and taken into account. It is undesirable to try to present any cultural analysis with total objectivity; not only would this be impossible, but a person’s emotional reactions and biases are also primary data to be analyzed and understood.

I did not realize at the time that I was also confronting in these two companies an archetypal organizational issue: first, how to turn rampant creativity and innovation into a stable productive system and then, once a level of stability had been established, how to recapture some of the innovative capacity that is needed when a mature company faces changes in its technological, economic, and market environments. This issue has become a central focus of researchers on organizational structures and processes and has led to the concept of the “ambidextrous organization,” which is to be able to both maintain its “old” business while simultaneously creating and protecting a new innovative business until it becomes mature and enables the company to survive in a new environment (O’Reilly & Tushman, 2016).

Espoused Beliefs and Values

Beliefs and values are usually elicited best when you ask about observed behavior or other artifacts that strike you as puzzling, anomalous, or inconsistent. If I asked managers in Ciba-Geigy why they always kept their doors closed, they would patiently and somewhat condescendingly explain to me that this was the only way they could get any work done and that they valued work very highly. Meetings were a necessary evil and were useful only for announcing decisions or gathering information. “Real work” was done by thinking things out, and that required quiet and concentration. In contrast, in DEC real work was accomplished by debating things out in meetings!

It was also pointed out to me that discussion among peers was not of great value and that important information would come from the boss or someone more technically expert. Formal and academic authority were highly respected, especially authority based on level of education and experience. The use of titles such as “Doctor” or “Professor” symbolized respect for the knowledge that education bestowed on people. Much of this had to do with a great respect for the science of chemistry and the contributions of laboratory research to product development. In Ciba-Geigy, as in DEC, a high value was placed on individual effort and contribution, but in Ciba-Geigy, no one ever went outside the chain of command and did things that would be out of line with what the boss had suggested.

In Ciba-Geigy, a high value was placed on product elegance and quality, and, as I discovered later, what might be called product significance. Ciba-Geigy managers felt very proud of the fact that their chemicals and drugs were useful for crop protection and creating the fertilizers that helped third-world countries deal with starvation, for curing diseases, and in other ways that helped to improve the world. The company had a clear worldwide identity that seemed to inform almost everything it did.

Assumptions—The Ciba-Geigy Company’s Cultural Paradigm

Many of the values that were articulated gave a flavor to this company, but without digging deeper into assumptions, I could not fully understand how things worked. For example, the artifact that struck me most as I worked with this organization with the mandate to help it to become more innovative was the anomalous behavior connected with a memo I had written based on my learning how the company was successfully managing a difficult down-sizing process. I asked my contact client, Dr. Leupold, the director of management development, to distribute my memo to those managers he thought could most benefit from the information. Because he reported directly to Dr. Koechlin, he seemed like a natural conduit for communicating with those divisional, functional, and geographic managers who needed the information I was gathering. When I would return on a subsequent visit to the company and meet with one of the unit managers, without fail I would discover that he did not have the memo, but if he requested it from Dr. Leupold, it would be sent over almost immediately.

This pattern was puzzling and irritating, but its consistency clearly indicated that some strong underlying assumptions were at work here. When I asked one of my colleagues in the corporate staff unit that delivered training and other development programs to the organization why the information did not circulate freely, he revealed that he had similar problems in that he would develop a helpful intervention in one unit of the organization, but that other units would seek help outside the organization before they would “discover” that he had a solution that was better. The common denominator seemed to be that unsolicited ideas were generally not well received.

A third piece of information was that corporate marketing kept proposing integrated programs for all the divisions, only to be shot down with the comment: “How could there possibly be common training for Agri sales/marketing people who are slogging around in muddy fields talking to farmers, and well dressed MBAs visiting doctors in their hospital offices.”

My colleague and I had a long exploratory conversation about this observed behavior and jointly figured out what the explanation was. At Ciba-Geigy, when a manager was given a job, that job became the private domain of that individual. Managers felt a strong sense of turf or ownership and made the assumption that each owner of a piece of the organization would be completely in charge and on top of his or her piece. Managers would be fully informed and make themselves experts in that area. Therefore, if someone provided some unsolicited information pertaining to the job, this was potentially an “invasion of privacy” and possibly an insult, as it implied that the manager did not already have this information or idea. The powerful metaphor that “giving someone unsolicited information was like walking into their home uninvited” came from a number of managers in subsequent interviews.

By not understanding this assumption, I had unwittingly put Dr. Leupold into the impossible position of risking insulting all his colleagues and peers if he had circulated my memos as I had asked. Interestingly enough, this kind of assumption means that even he could not articulate just why he had not followed my instructions. He was clearly uncomfortable and embarrassed about it but had no explanation until we uncovered the assumption about organizational turf and its symbolic meaning.

I realized that there was very little lateral communication occurring between units of the organization, so that new ideas developed in one unit never seemed to get outside that unit. If I inquired about cross-divisional meetings, for example, I would get blank stares and questions such as “Why would we do that?” Because the divisions were facing similar problems, it would obviously have been helpful to circulate some of the better ideas that came up in my interviews, supplemented with my own ideas based on my knowledge of what went on in other organizations. But here was a good example of a process that might work in the U.S. culture but might not even be considered in another macro culture. Of course, the irony in this example is that if I had understood this cultural characteristic I would have obtained a list of managers from Dr. Leupold and sent my memo directly to all of them. They would have accepted it as coming from the outside paid consultant and might even have viewed it as evidence that they were getting something useful from the outside expert.

Putting my interviews and direct observations together permitted me to construct a cultural paradigm for Ciba-Geigy, allowing, however, for the fact that I did not have nearly as much information in this instance as I had in the DEC case. Because these assumptions were not as tightly linked as the DEC ones, I present them only as a list.

1. Scientific research is the source of truth and good ideas.
2. The mission is to make a better world through science and “important” products.
3. Truth and wisdom reside in those who have more education and experience.
4. The strength of the organization is in the expertness of each role occupant. A job is one’s own turf.
5. We are one family and take care of each other, but a family is a hierarchy and children have to obey.
6. There is enough time. Quality, accuracy, and truth are more important than speed.
7. Individual and organizational autonomy are the keys to success so long as one stays closely linked to one’s “parents.”

Analytical Comments. Ciba-Geigy had grown and achieved much of its success through fundamental discoveries made by a number of basic researchers in the company’s central research laboratories. Much of its basic culture could be attributed to the macro culture of chemistry, which is a formal hierarchic discipline in which experimentation has to be done carefully to avoid explosions, fires, and bad odors. DEC was based on electrical engineering in which “fooling around” was not only possible but often desirable.

Whereas in DEC truth was discovered through conflict and debate, in Ciba-Geigy truth had come more from the individual wisdom of the scientist or researcher. Both companies believed in the individual, but the differing assumptions about the nature of truth led to completely different attitudes toward authority and the role of conflict. In Ciba-Geigy, authority was much more respected, and conflict was to be avoided. The individual was given areas of freedom by the boss and then was totally respected in those areas. If role occupants were not sufficiently educated or skilled enough to make decisions, they were expected to train themselves. If they performed poorly in the meantime, that would be tolerated for quite a while before a decision might be made to replace them.

In DEC if an individual was failing in a job the assumptions would be made that it was a mismatch rather than a personal failure and the individual would be allowed to negotiate a new assignment. In Ciba-Geigy, individuals would be expected to be good soldiers and do the job as best they could, and as long as they were perceived as doing their best they would be kept in the job. In DEC the individual was expected to negotiate his or her areas of freedom and then take full responsibility to report if things were not working out so that the job could be renegotiated, leading to a much more fluid job structure and much more vertical and lateral communication around work issues. Both companies had a “tenure” assumption that once people were accepted, they were likely to remain unless they failed in a major way or did something illegal or clearly immoral.

Both companies talked of being families, but the meaning of the word family was quite different in each company. In DEC, the essential assumption was that family members could fight, but they loved each other and could not lose membership. In Ciba-Geigy, the assumption was that parental authority should be respected and that children (employees and subordinate managers) should behave according to the rules and obey their parents. If they did so, they would be well treated, taken care of, and supported by the parents. They should not fight, and they should obey the rules and never be insubordinate.

Vertical and horizontal relationships in DEC were more personal whereas in Ciba-Geigy relationships were clearly more formal. This raises the interesting question of whether those differences reflected organizational culture and history or whether they reflected the macro cultures of the United States and Swiss Germany. If language is one of the major artifacts and characteristics of a national culture, one would note that English is a much less formal language than German, reflected even in the fact that in German the pronouns “du” and “sie” are used to differentiate how personal the relationship is meant to be.

In DEC, lifetime employment was implicit, whereas in Ciba-Geigy, it was taken for granted and informally affirmed. In each case, the family model reflected the wider macro-cultural assumptions of the countries in which these companies were located.

After I understood the Ciba-Geigy paradigm, I was able to figure out how to operate more effectively as a consultant. As I interviewed more managers and gathered information that would be relevant to what they were trying to do, instead of attempting to circulate memos to the various branches of the Ciba-Geigy organization through my contact client, Dr. Leupold, I found that if I gave information directly, even if it was unsolicited, it was accepted because I was an “expert.” If I wanted information to circulate, I sent it out to the relevant parties on my own initiative, or, if I thought it needed to circulate down into the organization, I gave it to the boss and attempted to convince him that the information would be relevant lower down.

If I really wanted to intervene by having managers do something different, I could accomplish this best by being an expert and formally recommending it to the CEO, Dr. Koechlin. If he liked the idea, he would then “order the troops to do it.” Inasmuch as he liked the career anchor idea, he ordered that everyone do the exercise for the summer program, but he mandated that in the following year all upper- and mid-level managers were to do the career anchor and job/role analysis, order their subordinates to do it, and then discuss it with them as part of the executive career development process. More will be said about Ciba-Geigy subsequently, but for now we need to explore the nesting concept again and ask a bigger question about macro cultures.

Summary and Conclusions

In the preceding two case analyses, I have tried to illustrate how organizational culture can be analyzed at several levels: (1) visible artifacts; (2) espoused beliefs, values, and behavioral norms; and (3) taken-for-granted basic underlying assumptions. Unless you dig down to the level of the assumptions, you cannot really decipher the artifacts, values, and norms. However, if you find some of those assumptions and explore their interrelationship, you are really getting at the essence of the culture and can then explain a great deal of what goes on. This essence can sometimes be analyzed as a paradigm in that some organizations function by virtue of an interlocking, coordinated set of assumptions. Whereas each one alone might not make sense, the pattern explains the behavior and the success of the organization in overcoming its external and internal challenges.

We should not assume that even these paradigms describe the whole culture, nor should we assume that we would find the same paradigm operating in every part of the organization. How general the assumptions are throughout the organization should be investigated empirically depending on your purpose. As a researcher trying to describe a whole culture, your needs for completeness would be quite different than if you were an employee or customer dealing with a local unit. If you are a manager trying to change the culture or are considering a merger or acquisition, it is the essence, the DNA of the culture, that you would be most concerned about. I discovered these assumptions as a helper and consultant primarily through observation and exploring with inside informants some of the anomalies that I observed. It is when we do not understand something that we need to pursue vigorously why we do not, and the best way to search is to use our own ignorance and naïveté.

What are some the lessons to be learned from these cases, and what implications do they have for leadership? The most important lesson for me is the realization that culture is deep, pervasive, complex, patterned, and morally neutral. In both cases, I had to overcome my own cultural prejudices about the right and wrong way to do things, and to learn that culture simply exists. Both companies were successful in their respective technological, political, economic, and broader cultural environments for a long time, but both companies also experienced environmental changes that led to their disappearance as independent economic entities.

In both cases, the powerful influence of early leaders and historical circumstance was evident. Cultural assumptions have their roots in early group experience and in the pattern of success and failure experienced by these companies. Their current leaders strongly valued their cultures, were proud of them, and felt it important for members of their organizations to accept the assumptions. In both organizations, stories were told of misfits who left because they did not like the way the company operated, or who were not hired in the first place because they either would have been disruptive or would not have liked it there anyway.

In both companies, leaders were struggling with changing environmental demands and were facing the issue of whether and how to evolve or change their ways of operating, but this was initially defined as reaffirmation of portions of the existing culture, not as changes in the culture. Though the companies were at different stages in their evolution, they both valued their cultures as important assets and were anxious to preserve and enhance them.

Finally, it is obvious that both companies reflected the national cultures in which they operated and the technologies that underlay their businesses. DEC was a U.S. company of creative electrical engineers evolving a brand new technology; Ciba-Geigy was a Swiss-German company of mostly highly educated chemical engineers working both with very old technologies (dye stuffs) and very new bio-chemical processes (pharmaceuticals). Electrical circuits and chemical processes require very different approaches and timetables for product development, which was pointed out to me many times. An important implication is that culture cannot really be understood without looking at core technologies, the occupations of organization members, and the macro-cultural context in which the organizations exist.

The major differences resulting from size, age, and leadership behavior were evident and will be spelled out more specifically in Chapter 11.