Corporate Claim Culture - Benefit or Burden?

Are you wondering why (utilities) companies are so reserved in providing information? More than once I asked (facing an incident) whether “there has been a problem with the central, or " I always got the answer, “not that we know of, but please tell me your problem." Afterwards I understood that there was indeed a problem, an incident but it remained implicit. And now, after a new incident, I finally understand what is causing this attitude: the claim culture.

Culture is what a group of persons share in solving certain issues. A “Claim-culture” is a denomination of a singular cultural element, in this case the solution of claiming when problems occur. This term is used to describe a trend in society, but the term could also be used to describe a corporate habit.

Claims are born in society as a normal process in which the negative side effects of someone’s business or activity that affects another (third) party or someone’s belongings – like a product. Examples often point in the area of public infrastructure which is offered by a public organ (like a municipality) and the incident that takes place giving an opportunity to claim the damage that is caused. This could be a pavement that caused someone to break a leg. In the private sector the example could be that someone hit a shop display – not having taken into account a persons length - and got hurt.

More frequent examples are those where a group is affected by the activity of a single player; a telco provider that faced a downtime of half a day because of a fire in the central. Also the incident where a group of house owners is left without electricity for a day or so, causing all kinds of damages. All these incidents can be claimed.

The term claim culture refers to a situation that this processes of claiming is becoming the best-practice solution for incidents. There are (always) other solutions possible, but the path of claiming has become the way to solve these issues.

Companies also face this element of claiming. It is more important to find out WHO has caused the problem than to solve it and to keep a good climate. And this is exactly one of the side effects of such a claim culture: a hostile and closed climate.

This could be a relevant element for organization who deal with such a culture and which want to change this element. A motivator for changing such a culture could be the importance of (organizational and individual) learning. There should be an acceptable trade-off between the costs of learning and the benefits. But on average and especially in case of claim-cultures, the balance point in the direction of hiding information and knowledge. For learning it is wise to open up. Paying for one’s mistakes is a normal fact of life.

In claim cultures (society) you will indeed have to pay, but in corporate claim cultures this emphasis is not nesessary and even inhibiting a corporate learning process. Instead of just "paying" for a mistake and getting it over with, mistakes are covered-up. This flow is the result of a cultural process where learning is subordinate to the claim. An organization can not serve both.

In the end, paying will pay-off more than covering up mistakes which will become evident anyhow and which cause a bad image costing much more on the long term.

Whether utility companies should adapt a more transparant approach when dealing with incidents remains a question. A simple question, what would they loose?

© 2007 Hans Bool

Article Source: http://www.content.onlypunjab.com

Hans Bool writes articles about management, culture and change. If you are interested to read or experience more about these topics have a look at: Astor White or sign-up for our newsletter.

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