Return to Nicholas Johnson's Iowa Rain Forest ("Earthpark") Web Site

Return to Nicholas Johnson's Blog, FromDC2Iowa
 
 

[Note: This material is copyright by the Press-Citizen, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Iowa City Press-Citizen.]

I believe knowing about VeriFone's history can help us understand better the problems facing the University of Iowa and the Iowa state Board of Regents.

The importance of culture

VeriFone was already a world leader in the electronic payment business when in 1997, Hewlett-Packard, another successful and larger company, purchased it. Soon after becoming part of the "HP family," VeriFone started losing customers. During the next four years, its losses worsened until HP finally sold it. Now, just five years later, VeriFone, is again the world leader in this industry, consistently beating expectations and outperforming its competitors.

What caused this change? Culture!

Said one analyst at the time, "The HP culture gummed up VeriFone and sucked the oxygen out of it." Once VeriFone was free of the HP culture, it resumed its rapid growth.

It is important to note that HP is a successful company led by skilled managers. But the culture that works well in one industry often does not work well in another. While the HP managers knew how to make HP successful, they were ignorant of the culture that made VeriFone successful -- and this ignorance nearly destroyed a great company.

The university business

The university is a "business" whose main products are the advancement of knowledge and the creation of people who seek truth by thinking for themselves while respecting other opinions. Successful faculty don't know many things, but they do know how to produce these products. These products require a specific culture.

Some people may think that faculty are acting like spoiled children when they complain about following a procedure that differs from the way things are usually done at the university. No doubt HP managers made a similar assumption about complaining VeriFone employees.

However, to be an effective regent one needs to be able to discern when such complaints represent a natural reluctance to try something new and when they represent a defense of the culture that makes a university successful. This is impossible if you don't know what a university culture is.

Admission of a mistake

One example of the university culture is how faculty respond to admissions of a mistake. During the recent Faculty Senate meeting, a faculty senator from the medical school was told that he made a mistake interpreting state law. He smilingly apologized and said his action indicates what happens when a physician tries to be a lawyer.

His admission was greeted with good-natured collegial laughter. Why? Because all successful faculty have made mistakes! To be successful in the "business" of advancing knowledge and having honest discussions, you need to recognize and admit your inevitable mistakes. There is no room for "fudging the truth." Not surprisingly, few things can lose the respect of faculty more quickly then when a person makes a mistake and tries to hide it.

The corporate culture

Faculty sometimes disapprovingly label the regents as having a "corporate culture," with its focus on costs and benefits and maximizing short-term efficiency. Their disapproval overlooks the fact that actions that satisfy only the university's culture are not financially sustainable in today's economy.

The average university faculty salary is several times greater than the average Iowa worker's salary The typical Iowa business has had to reinvent itself several times to stay competitive in the global market. Legislators often demand immediate results to justify their funding actions to voters. Since the regents need funds from these groups to sustain the university, they must respect the culture of these groups as well.

The power struggle

People who are self-interested likely will see the current problems as a power struggle. Let us hope that those in the position to correct this problem do not adopt such a superficial and simplistic view. Let us hope that the leaders from all the involved parties will have the desire to understand and respect cultures different from their own. Let us also hope that they have the courage to apologize for the mistakes that they made and the talent to identify creative solutions that meet the needs of the various cultures involved.
_______________
Jay Christensen-Szalanski is a member of the Press-Citizen's Writers' Group and a professor of Management and Organizations at the University of Iowa.