Cult-ivation…

Over time, most corporate (and other) entities develop their own culture- ways of doing things or behaviours that in some way differentiate an entity from its competitors and peers. These can be both external and internal, with the former the “face” it shows to those outside it, and the latter the norms to which its managers and employees are expected to adhere or subscribe.

This is not to say that corporations somehow resemble the Borg Collective into which minds are absorbed and assimilated, but there are certainly what one might term “expected levels of adherence” which vary across organizations.

A corporate culture that grows and adapts is heathy as long as it does not begin to impinge upon the lives of its members to an extent that degrades their quality of life and personal autonomy.

It is perfectly reasonable for individuals to be told the company has established that, for its business model, a certain way of doing things has been found to be the most efficient and effective, and that, therefore, they are expected to follow such an approach themselves. However, sometimes such expected behaviours can veer off into what becomes something akin to a cult.

The standard definitions of a cult tend to involve “excessive devotion” to a particular person, object or belief; with the underlying implication that such “devotion” is misguided, unwarranted or potentially harmful.

In the business realm, there are some entities where it is arguable that the term “cult” should be applied- Apple (under the late Steve Jobs) and Tesla being examples where suspension of rational thought has been visible at times.

So, what characteristics should one look for in determining whether or not a corporation might also be a cult?

Terminology matters. Particular words or phrases take on a meaning that, elsewhere, might induce the “cringe factor” in an observer. Are Disney employees really “cast members”?

Similarly, the creation of company-specific rituals to which all employees are expected to subscribe is another characteristic. The Friday afternoon beer wagon is all very well, if it is simply an opportunity to unwind and socialize; but if attendance is, or is felt to be mandatory, it becomes a method of coercing behaviour.

An obsession with “fit”, or a certain set of personal characteristics, whether physical or intellectual, can be another clue. It is perfectly reasonable for a company that needs certain attributes in its employees (as long as they are not discriminatory) to emphasize those in its hiring processes. However, if everyone is a “clone” from whom identical behaviour is expected, one should begin to question what is going on. Discussion, differences of opinion and even open dissent (as long as reasoned and respectful) are essential characteristics of an adaptable organization. Cults depend upon stifling such behaviour.

So, one should always ask one’s self in a corporate (or, frankly, any other group environment), whether reasonable expectations have somehow crossed the line into coercion.

In the realm of (re)insurance, while there are certainly a number of towering and influential individuals, and entities that are widely admired for their single-minded focus, we would argue that there are no true cults. The Sage of Omaha certainly has cult-like status amongst the shareholders of Berkshire Hathaway, but a true cult requires an element of sanction for “disobedience”. No-one is compelled to own Berkshire Hathaway’s shares, nor transact with National Indemnity; and Mr. Buffett would, we are sure, scoff at the idea that anyone should feel compelled to follow his precepts.

Over the past seven plus years since it was established, those who know Awbury well would probably acknowledge that it has a distinctive corporate culture (as exists amongst our partners), with the points made above demonstrating the importance both of creating a proper balance between that culture and maintaining an openness to diverse opinions and positions. It is the blending of the two elements which is most likely to make and keep an organization successful; and is something that we at Awbury look for when assessing the non-quantitative qualities of our Obligors and Insureds.

The Awbury Team

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