Culture. Few business attributes are so critical to success yet so imprecise, as in, "We must get our culture right, if only we could figure out what it is." Companies and their IT organizations often talk about cultivating a culture of collaboration and innovation, even if they're not clear about the means, or even the ends.

The last two CEOs of Hewlett-Packard, it is said, were casualties of their refusal to fit into and foster the company's established culture of walk-among-the-troops leadership, distributed decision-making, and work-life balance--the acclaimed "HP Way" laid down in the 1950s by founders Bill Hewlett and Dave Packard. Critics of the past two HP chiefs, including some longtime board members, chafed at Carly Fiorina's and Mark Hurd's autocratic, impersonal styles (not to mention Hurd's expense reporting practices). But critics of the critics wonder if HP's cultural credo has become something of an excuse for doing things the same old way. Even first-class cultures must adapt and evolve.

Vanguard Group, the No. 1 company in this year's InformationWeek 500 ranking, has refined its culture of IT innovation over the past several decades. Early on, it was a fast follower--not much of an IT innovator but a reliable provider of IT capabilities. Later, as Vanguard staked out a leadership position in the mutual fund industry, it formalized its process for producing technology-based innovations, under a centralized lab, but that work tended to stray from the company's core business priorities. Today, its five-person innovation group coordinates ad hoc teams of company volunteers, whose leading-edge IT work is tied more directly to business needs but who still are counted on to deliver "wow" breakthroughs in mobility, social networking, and other areas. Vanguard's innovation culture continues to adapt and evolve, one reason we think it's worthy of our top ranking.

That's not to say that one culture fits all. The innovation culture at the No. 2 InformationWeek 500 company, InterContinental Hotels Group, is a bit more open-ended. IT employees are encouraged to experiment with a range of new technologies at IHG's innovation lab in Atlanta. "As long as they don't burn down a hotel or electrocute a guest, those are the only two rules that really apply," jokes CIO Tom Conophy. "We don't want to curtail their thinking." However, the most promising information technologies don't sit in the company's virtual petri dishes for long. IHG's Crowne Plaza property next door serves as a technology test bed for a range of hot new systems and applications.

Looking at innovation on a macroeconomic level, InformationWeek surveyed 624 business technology professionals about the factors limiting U.S. IT leadership. Among the 427 respondents who think the U.S. is losing or has lost its high-tech lead, a healthy percentage cited cultural reasons: a societal culture that emphasizes other high-paying professions over IT professions (cited among the top three reasons by 24% of survey respondents) and a corporate culture where tech workers no longer are "hungry" enough to out-innovate counterparts based abroad (cited by 21%). There's no pat solution, but it starts with more rigorous science and math education, more serious workplace training and career development--and, from the start, more hands-on parenting.

The wrong culture, or even a stagnant one, can cripple or kill a company or industry. The stakes are that high.

Rob Preston is VP and editor in chief of InformationWeek. You can write to Rob at rpreston@techweb.com.

Rob Preston,
VP and Editor in Chief, InformationWeek
rpreston@techweb.com

To find out more about Rob Preston, please visit his page.

To access the complete InformationWeek ranking and a range of related stories and research, go to informationweek.com/iw500.