Don't change people, change the smell of the place

Digital transformation -together with Artificial Intelligence- is one of the most used and abused buzzwords. The focus is often on why digital transformation is imperative for companies of any size and how integrating digital technology into all areas of a business will change how you operate and deliver value to customers. There is more than this. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure. To mention an old quote but still valid: "Organizational Culture eats strategy for breakfast". And Digital strategy for lunch and dinner.

So, how do you actually influence company culture?

The fundamental core element of culture is the basic underlying assumptions. It means our values and beliefs, often not explicitly shared or declared. The underlying assumptions are what determines our company culture. We absorb those assumptions daily while working in the organization: by listening to them, responding to them, and acting according to them.

But can you affect or change others' basic underlying assumptions?

Yes, you can affect them, but it's pretty difficult to change them radically. Each person has her own intrinsic, worthwhile desires, and beliefs. Individuals do not change fundamentally, who they are, without any severe personal crisis of some kind. But changing people's underlying assumptions is probably the wrong goal.

Getting people to experiment something new has a lot less to do with changing people and has a lot more to do with changing the context.

What you can do is to focus on creating an environment where people will feel stimulated and comfortable changing their behavior.

The same individual behaves differently in two different contexts. It is the quality of management who create the right context around their people to improve their contribution to the company

Professor Sumantra Ghoshal, a great management thinker, would talk about the "smell of the place" - the context in which an organization operates - that can bring out the best or worst in people. He would illustrate it with a compare-and-contrast example of being in Calcutta on a summer morning - it's hot, humid, and drains you of energy- and being at Fontainebleau in spring: crisp mountain air, a fragrance of life, a spring in your step. Organizations are like that: they can lift you or exhaust you.

How the environment makes people feel translates into how they behave.

Bad context means that people feel that they are constrained to follow strategies and processes, considered not as opportunities but as a box of constraints. That they have to comply with the infrastructure of systems, planning systems, budgeting systems, financial systems. That management is there to control them. As a result, people do work just by contractual obligation.

Clearly, these values don't create the right context for people to proactively create change, take the initiative, contribute to building a company able to compete in the future.

As opposed to constraint, compliance, control, and contract, the companies able to provide a context where people can better contribute to the company, are acting on four dimensions:

Stretch vs. Constraint: the sense that each person is trying to do more rather than less. This "smell" is the result of creating a new set of values, an aggressive ambition. It's not a moonshot (it could be demotivating), but a roof shot. It means to get the best out of teams and individuals by exploiting their, sometimes hidden, strengths. 

Self- discipline vs. compliance: to quote a management principle introduced by Andy Grove in Intel:

Agree or Disagree but Commit.

Leaders driving decisions should show up prepared to speak their mind freely, even if it means heated discussion. Conflict, tension, and debate are healthy as long as people focus on attacking the ideas and issues, and not one another. Committing means that whatever final decision is made, everyone must do whatever they can to implement it, regardless of whether they agree or disagree. Everyone is responsible for ensuring the work gets done.

Support vs. control: Managers are there to help people to win—the servant leadership model. Robert Greenleaf coined the term in an essay that he first published in 1970. Servant leadership seeks to move management away from "controlling activities" and toward a more synergistic relationship among parties. Servant leadership involves empathy, listening, stewardship, and commitment to professional and personal growth toward others.

Trust vs. Contract: trust at work means:

I know I'm in safe hands.

Even if I never met you.

Trust becomes even more and more relevant when digitalization means to work with remote teams. In a remote management scenario, trust needs to be more actively sought and managed rather than being a passive emotion.

Companies able to de-bureaucratize the work environment, enabling a context that facilitates embracing the digitalization, can gain a significant competitive advantage since they move more quickly to develop innovations, improved processes, custom mass production, and gain market share.

To improve the chances to succeed and to accelerate the company digitalization, you can take advantage of some catalysts:

• Treat people as assets, not as commodities
• Track and manage expertise explicitly and stimulate people to continuous learning
• Reward employees for risk-taking and activities that create learning and improvement
• Focus on creating value for customers and customizing relationships
• Co-create value with customers

Now, there is no simple and grand formula that can be applied across companies. Shaping the company's culture is more art than it is science.

The effort of creating engaged, authentic work cultures should be a genuine endeavor in and of itself. A culture that mimics another organization won't achieve long term results.

The goal must be to carve your own path, in that unique way that makes sense for your company, your industry, and your employees. This path should be the one that not only fits best and endures the longest, but also achieves the best results.