Leadership story: Lesson of the rowing team why company culture is important

There was once a giant battle for the market share between a Japanese and an American company. Both were trying to buy the same family company which would shift the tide of market share into one or the other’s favor. The family company had the final word about which company they would end up doing business with. The man in charge of the family company wanted to see which management team would be the best fit for them. So he decided he would make his choice based on the results of a few competitions in rowing. He chose rowing because it was a team sport that required strength, tactics, mental discipline,  organizational, and analytical skills. He was sure that he would get the right sense of the company culture this way. The companies accepted the condition and started preparing right away. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese team won by a mile. The American team was very discouraged and depressed, so they decided to investigate the reason for the crushing defeat.

Shortly after the defeat, the American company formed a management team made up of senior management to investigate and recommend appropriate action so the team would win the next race. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Not sure what to do with this information the American company hired a consulting company and paid them a large amount of money for a second opinion. They advised that too many people were steering the boat, while not enough people were rowing. Based on this the management team decided to prevent another loss to the Japanese, by reorganizing the team into 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the person rowing the boat a greater incentive to work harder. It was called the “Rowing Team Quality Program”, which included concert tickets, dinners, and other small perks for the rower. There was also a discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices, and bonuses for good results. The Japanese company didn’t change a thing, they just built on what they already implemented.

Soon it was time for the next race. The American company was sure they had this in the bag. But to their disbelief, the Japanese won by two miles this time. Humiliated, the American management immediately fired the rower based on his unsatisfactory performance. A bonus was paid to the supervisors, superintendents, directors, and managers for the strong leadership and motivation they showed during the preparation phase and as an incentive to find a better rower for the next race. The consulting company prepared a new analysis which showed that the strategy was good, the motivation was great, the restructuring was executed correctly, but the tool used was sub-standard and had to be improved. The Senior Executives got paid big fat bonuses for their work and the next racing team was outsourced to India. The family company saw enough to determine what kind of company culture which company had. Based on that they decided to go with the Japanese company.