The Insider's Guide to Culture Change by Siobhan McHale
Juan Carlos Zambrano
Gerente de Finanzas @ Tecnofarma Bolivia | Coaching ontologico
1 LEARN THE INSIDER’S SECRET The Culture Disruptor
Few scandals in the history of business rival the 2001 collapse of Enron, the American energy company whose culture of greed and rapaciousness tumbled it from the pinnacle of success to the abyss of failure. Its leaders’ unethical and illegal behavior resulted in one of the largest bankruptcies in American history and triggered the dissolution of Arthur Andersen, one of the top accountancy firms in the world
This case illustrates the fact that you cannot legislate a strong, positive, vibrant, corporate culture. What, exactly, do we mean by corporate culture? Every executive I’ve ever met uses the term, but I’ve found few who can clearly and concisely define it. My definition of workplace culture is The patterns or agreements that determine how the business operates. A simplified version that I commonly use is: It’s how things work around here. No published policy can create a corporate culture. No document outlining an organization’s bedrock values can guarantee that people will faithfully practice those values. Culture emerges not from a proclamation or code of ethics but from how people, especially the organization’s leaders, behave day in and day out. As the sad story of Enron proves, it’s possible for even the most honest and upright worker to get ensnared in, and corrupted by, a bad culture
A bad culture can corrupt good people
In today’s hyperconnected world of instantaneous global communication, massive market disruptions, the expansion of an all-powerful urban consumer class, conflicts within the multigenerational workforce, and increasingly strict laws and regulations governing corporate behavior in some countries, it takes more than pretty words to instill the values that will successfully steer a company through volatile and uncertain times.
If you want a high-performing, agile, market-dominating company that gets results no matter what challenges it faces, you’d better create a culture that will get the job done. Simple enough, right? No. Actually, it’s a whole lot easier said than done. To paraphrase Louis Gerstner, the former chairman and CEO of IBM, turning a bad culture into a good culture is like teaching a herd of elephants to dance
UNDERSTANDING THE POWER OF CULTURE
Every culture, good, bad, or exceptional, exerts tremendous power in the workplace. A bad culture like the one at the music warehouse generates lackluster results. A corrupt culture like the one at Enron courts disaster while a good one ensures that employees perform to the best of their ability even when no one is watching. But people do watch! In today’s hyper-connected world, evidence of a company’s culture can go viral in a heartbeat
Culture can make or break your strategy.
Culture differentiates one company from another. Think of it as an organization’s personality, the set of unique attributes that give it life, make it stand out from the crowd, and give it an edge over its rivals; or, in the case of an Enron or my summer employer or a United Airlines, it can undermine an organization’s ability to create and sustain a competitive advantage
SEIZING THE ULTIMATE COMPETITIVE ADVANTAGE
If your company makes widgets, your competitors can copy your product or even disrupt your market share with something that makes your widgets obsolete. You may jump on every management theory that comes along, from Lean Six Sigma, business process reengineering, total quality management, management by objectives, and benchmarking to knowledge management, e-business, economic value-add, big data, etc., etc., etc. You’ll find a lot of company there. But no one can easily copy your company’s culture. This explains why all those executives surveyed by pollsters cite it as a major priority.
This makes culture change one of the greatest untapped sources of performance improvement in organizations. If you get the culture right, the results will follow. Leaders who focus on the conditions that produce success (the culture) stand a far better chance of delivering the outcomes they desire
If you take care of the culture, results will take care of themselves
What can leaders do to turn that around? They can construct and maintain a vibrant culture where people choose to bring their best selves to their work. This became especially important when the so-called millennials entered the workforce. This new generation did not want merely to come to work, punch the clock, go through the motions, punch the clock again, and go home. They wanted meaning and purpose in their jobs. The best cultures bestow that meaning and purpose
That’s the good news. Here’s the bad news: building a great culture takes courage to begin the change and true grit to continue
Culture change is the hardest work you will ever do.
Sadly, however, a McKinsey report published in April 2015 and titled How to beat the transformation odds, reveals that up to 70 percent of corporate change initiatives fail to deliver expected benefits. Throughout this book, I will detail many case studies where well-intentioned leaders embarked on a major culture change initiative they hoped would happen overnight, only to find it moving at the speed of a glacier and often with far-less-than-hoped-for results. You will learn why the popular conventional approaches simply do not work. And more important, I will offer a new methodology that I have developed, not as an outside consultant but as an insider charged with making culture change happen. It boils down to activating what I call The Culture Disruptor
ACTIVATING THE CULTURE DISRUPTOR
The Culture Disruptor describes the four steps in successful culture change: Diagnose what’s really going on, Reframe the roles, Break the patterns, and Consolidate the gains
This simple but powerful model captures the essence of the culture change process that we’ll explore in detail throughout this book. Let’s take a quick look at how The Culture Disruptor works, by using the ANZ as an example—one of the most successful culture change efforts I’ve been involved in.
DIAGNOSING WHAT’S REALLY GOING ON
The first step on The Culture Disruptor is to Diagnose what really going on, (this step is depicted by a stethoscope icon in Figure 1.1). Let’s look at how this step played out in the ANZ transformation that I was intimately involved in from the early 2000s, that created the bank with a human face
The consulting firm of McKinsey & Company had diagnosed a range of issues the company needed to resolve. My own investigations confirmed what was really going on in the organization: its people’s behavior had cost ANZ the trust of both its customers and the wider community. The bank had received complaints about a lack of transparency when it came to customer fees and charges
John McFarlane faced a daunting task the day he walked into ANZ’s banking headquarters to begin his tenure as the company’s CEO
McFarlane resolved to turn that attitude around. But where should he begin? A true turnaround in public perception would mean fundamentally changing the beliefs and behavior of ANZ’s thirty-two thousand employees, and that would take more than a fancy new mission statement and a slick public relations campaign
The new CEO decided to take a surprising first step in what eventually turned into a seven-year campaign to restore faith in his company. He would simply listen to the complaints of the bank’s customers, shareholders, employees, and community stakeholders. Too often, those voices had fallen on deaf ears
Behind the scenes, we were working feverishly to figure out the underlying issues. We found that a deeply embedded dysfunctional pattern was driving it all. Decisions about almost everything, even the day-to-day customer experience in the branches, came from on high. This meant that frustrated customers often waited weeks to get answers to even the simplest questions and concerns.
Of course, the employees who actually dealt with customers every day felt they couldn’t exercise any initiative to solve problems. So, who was accountable for the bank’s bad reputation? The order givers in the head office blamed branch staff. The order takers on the front lines pointed the finger at the head office. And around and around it went, with customers getting more confused and angrier every day. We decided that nothing would change until we dealt with this basic blame game
REFRAMING ROLES
The second step on The Culture Disruptor is Reframe the roles, or see the work through a different lens—depicted by a pair of glasses in Figure 1.1. First, let me explain what I mean by roles. I believe that the roles we play in life and at work influence our behavior just as powerfully as our personality
Take Sarah Connors, for example. She wakes up on Monday morning, hugs her husband, Mark, and bounds out of bed to get their nine-year-old twins ready for school. Chatting about the day ahead with Mark, she fulfills the role of loving wife. Pouring milk into the twins’ cereal bowls and checking for any symptoms of the flu, she fulfills the role of parent
Ninety minutes later, Sarah steps onto the train and settles into her usual seat before opening her laptop to review the day’s schedule at Mount Sinai Hospital in New York, where she works as head of the cardiology department. She loves her role as a team leader. On her morning rounds, Sarah talks with a group of first-year medical students, comfortably switching into her role as teacher. Later in the morning, she catches up with her boss to discuss the need for new imaging equipment in her department, and she effortlessly takes up the role of negotiator. When a colleague whisks into her office late in the day to ask her opinion about a troubling diagnosis, Sarah steps into the role of advisor
Imagine how Sarah’s behavior shifts as she moves into all the different roles she must play each day. By nature a rather quiet and reserved woman, she adjusts her behavior in ways that make her effective in each role. She doesn’t talk to her family the same way she talks with students, patients, colleagues, or her boss. How does Sarah manage to shift her behavior seamlessly across all her interactions with so many different people? She holds in her mind’s eye a map that guides and shapes her behavior. This mental map influences how she performs a given role
Sarah doesn’t let her personality dictate her behavior. This may seem like a fairly obvious point, but most leaders believe that personality governs human actions and that traits such as extroversion, introversion, shyness, gregariousness, dominance, and submissiveness rule an individual’s behavior. In fact, a whole army of trainers and consultants in the field of change management preach this sermon. Figure out personality types, then change them to support your transformation initiative. I think that’s the hard way to do it. It’s far easier, I believe, to accept people for who they are and work, instead, on reframing the role they need to play in whatever culture change you have initiated.
Leaders who work with and change how people frame their roles can accelerate organizational change. Rather than trying to change people’s personalities, they work to reframe the way people think about and take up their roles in the change effort
Modify the role, not the person
Acting on the belief that organizations don’t change, people’s behavior does, the CEO invited each and every one of ANZ’s employees to behave like leaders, or, to put it another way, to step into leadership roles that would help him build a more human, customer-centric culture. He summed up his expectation with a constant clarion call: You must lead and inspire each other. He realized that to change the organizational culture, you must start by reframing the people’s roles and mobilizing them to contribute to the change objectives
McFarlane began that process by sending more than thirty-two thousand people on a program that would reframe their roles and equip them with the specific skills they needed to create this new culture. As they learned how to build better relationships with one another and their customers, they gained self-confidence and pride and much higher levels of customer satisfaction
Their new relationship-building skills enabled them to replace the blame game with a sense of their own role in solving problems. This new take-charge-and-solve-the-problem mentality gradually transformed the workplace from a toxic and highly political work environment into one where people took initiative and worked together more effectively. Staff began to embrace the idea of turning the bank into a more human and caring place to work and do business
John skillfully reframed his role when necessary from top boss to visionary leader, change champion, customer advocate, colleague, and musician. Reframing roles is an important step toward bringing about change faster and with minimum disruption in the workplace, because—like trying on a new pair of glasses—it enables people to look at the world through different lenses and to shift the way they think about and do their jobs.
BREAKING OUT OF DEEPLY EMBEDDED PATTERNS
Old cultures, like old habits, are hard to break. Implementing The Culture Disruptor’s third step, Break the pattern (depicted by a broken chain in Figure 1.1.), John McFarlane oversaw a bank-wide restructuring effort he called Restoring Customer Faith. The project’s title highlighted the number one problem ANZ needed to solve
To tackle the old head office versus the branch network blame game that had so alienated customers and the community at large, the bank’s leadership team introduced a new operating model that reframed the roles of the warring factions and focused them on cooperation and joint accountability: We work together to serve the customer. Note how We replaced us versus them
The new operating model, designed to replace the old habit of pointing the finger at others for causing the bank’s number one problem, placed customers at the heart of everything the bank did. Now, everyone would take joint accountability for meeting customer needs while still delivering on financial imperatives (that good old bottom line).
Take, for example, the story of Ella, the ANZ bank teller. One day she fielded a call from Tim, a long-standing customer. Tim told Ella that he was so excited about his upcoming trip to South America that he had forgotten to pick up the replacement ANZ credit card he had ordered after his had been stolen. Ella, I can’t get to the bank. The traffic’s horrendous. My wife and I will be late for our flight!
Ella stepped in to his rescue. She calmed Tim’s frazzled nerves, hopped in a cab, and raced to Tim’s doorstep, where she handed him his brand-new card. Thank you, Ella! You’ve got a customer for life! That’s one moral of the story: delighting a customer. But the cultural moral was just as important: an employee feeling empowered to make a decision at the drop of a hat. Goodbye order taker, hello problem solver
Change came about because head office staff had abandoned their old role of order givers in favor of one in which they functioned as support providers.
CONSOLIDATING GAINS WITH THE CULTURE DISRUPTOR
Over the course of the next seven years, I worked with ANZ’s leaders to implement a radical transformation at the bank. The bank’s executives knew that deeply embedding the new culture into the very fabric of the organization would require constant effort and vigilance over the long term, which is the fourth step on The Culture Disruptor, Consolidate the gains, (depicted as an upward spiral in Figure 1.1). McFarlane and his leadership team continued to introduce initiatives that added momentum to the change journey, including a volunteer community service program that gradually regained the trust of local communities
ANZ’s community service program allowed bank employees to take a paid leave of absence in order to participate in community service projects
After a lot of hard work and no end of patience and perseverance, we did get the results we needed at ANZ. I analyzed the change success at ANZ (and other organizations), which led me to develop The Culture Disruptor. By following this model’s four basic steps, you can break out of the old ways to create a culture that delivers, grows, and adapts. McFarlane did just this when he led the transformation of ANZ from the lowest performing financial institution in the country to the number one bank globally on the Dow Jones Sustainability Index. Within seven years, profits more than doubled, with a share price nearly triple its earlier low point. ANZ was winning awards for leadership, employee engagement, and customer service. The firm had also become a magnet for talent, receiving more than ten thousand applications annually for its 250 graduate positions. Employees loved working at ANZ. Customers loved doing business there
2 NDERSTAND WORKPLACE CULTURE Debunking the Myths About Culture
BUSTING THE BIG MYTH ABOUT WORKPLACE CULTURE
Culture is how things work around here or how the place functions. It affects every aspect of your business, from how you develop solutions to how you sell your products or services to how you make your customers happy. It’s all about patterns of thinking and relating that tell people how to behave in an organization. And these patterns start to take hold the first day that people walk into the workplace.
How do I change them and move culture in the right direction?
Before he or any other leader takes one step toward changing an organization’s culture, he or she must grasp the basic understanding of its true nature. Sailors learn the sailing basics before they embark on a sea voyage. The captain must ensure that crew members understand, for instance, the difference between ‘port’ and ‘starboard’ before setting sail. Otherwise he puts the ship at risk of crashing or not reaching the end destination. Leaders must also grasp the culture basics before they embark on the change journey.
One popular belief holds that culture boils down to explicit values and behaviors. However, that assumption can get you into a lot of trouble. No matter how hard you try to change a culture by promoting new values (Be bold! Be innovative!), and then expecting your people to immediately embrace those values and alter their behavior accordingly, little, if anything, will change. To create true and lasting change, you must concentrate on the three key elements of workplace culture
FOCUSING ON THE THREE KEY ELEMENTS OF CULTURE
The Culture Disruptor with a box next to it titled Three elements of culture (Figure 2.1). I explained to Jonathan, You must focus on three key elements of culture in order to accelerate change—Mental Maps, Roles, and Patterns.
Leaders must learn about and leverage these three key elements in order to successfully change workplace culture
Here is a description of each element:
REDRAWING MENTAL MAPS
We carry around mental maps in our heads that help us make sense of the world. The maps include our expectations, thoughts, feelings, assumptions, values, beliefs, and needs. The mental maps that people hold may not be visible to anyone else, but they strongly influence how people think and feel about their work and the roles they take up
Mental maps influence how people see and take up their roles
So people won’t knock on my door to explain their deepest feelings about the changes I want to make. But I can’t expect much change if I do not deal with the hidden beliefs and assumptions that influence how they do their work
Mental maps are like the GPS in your car; they help you navigate your way in the world. They contain information about the various roles that you step into throughout the day, and they work fine, but sooner or later they can become outdated. You may need to download the latest information about the roles you expect people to take up to ensure that they don’t get lost during times of upheaval. Never forget that culture change can be a big upheaval
Actions happen in our head before we perform them in the external world. An architect sees a beautiful house in her mind’s eye before she sets pencil to paper. A basketball player imagines the ball swishing through the hoop before he throws it from the three-point line. A consultant pitching a proposal to a potential client rehearses it before she presents it in a meeting. A smart leader carefully thinks through a change initiative before she does anything to implement it
During culture change, you must help people redraw the mental maps that guide their role, so they can better navigate the change
Getting different results depends on your ability to shift these mental maps and enable people to take up a different role
TAKING UP THE RIGHT ROLES
The next element is role, the roles people play in doing their work. The role that your consultants have traditionally taken up may conflict with the way you want them to behave in a more innovative culture
Different results depend on taking up a different role.
All leaders face the same challenge. How do you get people to do the right thing when you’re not there to make sure they do? The leaders at Southwest Airlines solved that dilemma by inviting its people to take up the role of servant leaders when it came to meeting customer needs. This role framing had such a powerful impact that it led one Southwest employee to take such dramatic action, the story appeared in Time magazine. A passenger urgently needed to fly from Los Angeles to Denver to the aid of his daughter
En route to the airport, the grandfather found himself mired in traffic. He would not make it to the terminal in time. He finally reached the airport, but he despaired. Surely the plane had departed by then. When he rushed to the gate, however, he could not believe his eyes. There on the tarmac stood the plane to Denver, its pilot patiently awaiting his arrival.
When the grateful grandfather thanked the pilot for his kindness, the pilot nodded and said: The plane can’t go anywhere without me, and I wasn’t going anywhere without you. Now relax. We’ll get you there. And again, I’m so sorry for your troubles
Why did the pilot do that? It turned out that Southwest’s culture included more than its famous commitment to on-time performance. The role that Southwest’s people were expected to take up was that of servant leader who would always put customers’ needs first. No boss told the pilot to do it. The role that he adopted in the culture told him to do it
This brings us to the third key element of culture: the patterns that lie at the heart of workplace culture. Nothing will change until you fully understand and disrupt the existing patterns
DISRUPTING THE PATTERNS
The third element is the deeply embedded patterns in the workplace. These are the unwritten rules that can capture people as soon as they enter the workplace. People come and go from any organization, but the patterns remain pretty much the same. You must look below the surface to discover these invisible patterns
To show him what I meant, I asked several questions about the way Jonathan’s team had always operated. Then I sketched a diagram of the old pattern of behavior
When the business environment changes, you must change with it
It starts with you. You can disrupt the pattern by shifting your role from ‘approver’ to ‘innovation leader.’ That will trigger a shift in your people’s behavior and a switch in their role from ‘traditional thinkers’ to ‘innovative thinkers
Culture, he realized, was less about what happened (the behaviors) and more about how the workplace functioned (the patterns)—these patterns held the key to lasting change.
UNDERSTANDING PATTERNS AT A DEEPER LEVEL
What do I mean by patterns? They are the overriding, often unwritten rules that govern how people relate to one another and do their work. They share three characteristics:
Patterns can help the change. They can also ruin it. Productive and constructive ones provide a positive force that propels the organization to success. Creativity abounds. Honest and open communication stimulates creative collaboration; collaboration creates trust; trust binds people together; and care for one another stimulates respect for the needs of customers
In sharp contrast, destructive patterns create a toxic environment in which people ultimately fail to deliver results. Self-interest prevails. Exclusion fosters alienation; secretiveness breeds mistrust; mistrust engenders defensiveness; and an unwillingness to accept accountability for mistakes leads to blaming others when something goes wrong. No one worries about providing excellent service to customers
Constructive patterns inoculate employees against the ailments that can afflict and destroy an organization. Destructive ones infect new employees the minute they walk in the door. Both become deeply embedded in the culture, whether they arose in the organization’s early days or have gradually developed over time. When you decide to change the culture, you can depend on constructive patterns to help the cause. Destructive ones can thwart your efforts every step of the way
Patterns come in all shapes and sizes. Some you recognize right off the bat. Others retain their secrets and can take you by surprise when you uncover them
Think of patterns as the ways people relate to each other and the (often unwritten) rules of engagement. They are the agreements between the parts and the cocreated dynamics. You must typically look below the surface in order to discover them. People may come and go from your workplace, but the patterns tend to remain the same
Deeply embedded patterns lie at the heart of workplace culture. Nothing will change until you identify and deal with those patterns
Patterns, not explicit values and behavior, govern culture
Having spent many years studying and teaching the subject, I found that it takes time for most leaders to learn how to spot the patterns in their organizations. A paradox lies at the heart of the problem. On the one hand, patterns resist easy detection; on the other hand, they follow certain basic rules. Once you understand those rules, you can become a master at pattern detection
LEARNING TO SEE PATTERNS
You can find patterns everywhere: in nature, in families, in nations. They develop according to certain rules. Understanding the rules that govern them will help you grasp the way they work in organizations
Everything in nature follows a pattern you can see if you look closely enough. And once you see a pattern, you can figure out why and how it exists
In the human world, psychotherapists who study families have also examined the effects of patterns. Both positive and negative patterns tend to pass from generation to generation
RECOGNIZING THE INFLUENCE OF SOCIETAL PATTERNS
Societal patterns can strongly influence organizational patterns. If you’re dealing with patterns held collectively in a societal or national culture, then the job of changing an organization’s culture just got a whole lot tougher
Figure 2.7. Patterns Sit at the Collective Level
When it comes to putting more women in leadership roles, most companies in most countries must climb a very steep hill. While the patterns infuse a given organization with long-standing ideas about the supportive role of women in the workplace, centuries of human and national patterns dictate that women fulfill those same roles in society. That’s a deeply embedded pattern to break and often-unconscious beliefs to conquer before companies achieve greater gender balance in positions of power
During culture change successful leaders look for the big patterns that drive the culture. Only when you grasp the cocreated nature of the big patterns that are running your business and the connections between the parts (that are fueling these patterns) can you feel confident about changing the culture.
3 PREPARE FOR CHANGE Diagnosing Your Current Business Environment
Now that you understand the basics of workplace culture, Mental Maps, Roles, and Patterns, you can think about embarking on your own change journey. Embarking on culture change is similar, in some ways, to setting sail on a sea voyage. As the leader, you must know your destination, chart your path, make necessary course corrections, and constantly diagnose the full business environment before, during, and after the journey.
In an unpredictable, disruptive, and fast-changing business environment, perennially successful companies constantly reinvent themselves and their culture
Given the complexities of workplace culture, you must be fully prepared before you embark on this type of change. Before you move to action, I recommend that you carry out a comprehensive assessment of what’s going on in the broader business environment, as well as in the workplace
SCANNING THE MARKETPLACE
You may recall The Culture Disruptor, with the four steps for successful culture change
The most successful change leaders carefully examine both the internal and the external environment to determine exactly what’s going on inside their own organization (the subject of the next chapter) and in the marketplace. Externally, they zoom in on current trends and developments just beginning to appear on the distant horizon. The future may resist accurate prediction, but you can always detect little clues to the internal changes you must make in order to thrive long term
The business world is filled with examples of company downfalls, brought about by a failure to notice and respond (appropriately) to what was going on in the external environment
SEEING THE THREATS ON THE HORIZON
Successful leaders remain ever vigilant for potential opportunities and threats on the horizon. The threats can emerge slowly over time and be so subtle that they are hard to detect. Other shifts can happen rapidly and have a dramatic impact on the financial health of the organization. Although I use the word threats, often these challenges can be opportunities for the company to grow and evolve. Leaders can never become complacent to these shifts in marketplace dynamics. Contrary to the old saying, complacency has killed more cats than curiosity ever did
GOING BEYOND GOOD
In today’s fiercely competitive business environment, good is never good enough. Only excellence will prevail. But how do you determine what excellence means in your industry? Is it the financial result announced by your rivals? Well, the numbers provide a yardstick for measuring success, but yardsticks do not create disruptive value that will allow you to break away from your competitors. Cultures do. To figure out where you stand in relationship to everyone else in your competitive world, you need to look at the cultures that drive their success
ACCURATELY ASSESSING YOUR BUSINESS NEEDS
There are good companies and bad companies, good cultures and bad cultures, good workplaces and bad workplaces, but one rule always applies: Every company, every culture, and every workplace must deliver the business results an organization needs in order to keep its workforce employed, its customers delighted, and its community well served. You don’t change your culture for the sake of change, you change it to meet your business needs. That may seem excruciatingly obvious, but leaders can fail to make that connection
No matter how far your culture change initiative may take you, it always begins with one surefooted first step. And that first step must be in the right direction: toward your ultimate business goals
DECIDING HOW YOU WILL MEASURE PROGRESS
Leaders who set a change initiative in motion and expect it to move forward without a hitch can, like Ben Harkness, end up wondering why progress has slowed to a crawl or halted altogether. As with any long journey, you need to set a series of milestones or benchmarks that tell you where you stand along the path to your final destination. Determining the metrics at the start of the change journey, allows you to track your progress in changing your business from the current to the desired culture
You can’t change what you can’t measure
Whatever measuring process you use, you need to apply it to the right variables
How will you measure progress toward your culture goal?
4 DIAGNOSE THE CURRENT CULTURE Looking for the Big Patterns
If you occasionally suffer crushing headaches and frequent bouts of fatigue, you might worry that you’ve come down with a serious ailment, perhaps an impending stroke. When I couldn’t shake those symptoms, I went to see my doctor. After giving me a thorough checkup, she announced a surprising cure. Siobhan, you might need glasses.
The health of a corporate culture requires the correct diagnosis, one that goes beyond symptoms and knee-jerk conclusions to the underlying causes of the problem. What, you must ask yourself, is creating the noise? You must carefully assess the situation. And, of course, a second opinion always helps
When organizational leaders realize that they are dealing with a sick culture, they usually feel such enormous pressure to cure it that they make hasty decisions they soon regret
In the first step on The Culture Disruptor, Diagnose, you explore and pinpoint what really ails you. How do you avoid jumping too quickly to solutions when facing a crisis? How do you identify the real issues that are holding your business back from achieving its full potential? Until you see and address the underlying causes, you will continue to experience the reoccurring noise in your workplace
LEARNING BY WALKING AROUND
Effective change leaders don’t just sit on their perches high in the C-suite; they spend a lot of time walking around the organization, talking to people at every level in every functional area, and keenly observing how things work around here. They bring a good set of eyes and ears to the task, observing the ways of relating and listening carefully to what people say about their work, their colleagues, their department, their boss, and the company
Effective change leaders bring keen eyes and ears to the work
Observant leaders look and listen for subtle clues to a culture’s health. They know when tellers treat their customers with a dismissive attitude; they know when support staff sees authors as nuisances; they notice if a manager remembers the birthdays and employment anniversaries of every person on the team. As you walk around your business, try to see it with fresh eyes and listen with open ears. What you see and hear might surprise you
PRESSING THE PAUSE BUTTON
Impatience can kill a change initiative before it even gets started. As you try to figure out what’s going on inside your business, you can often find yourself under considerable pressure to implement a quick solution. A chorus of voices may be demanding decisive action. You worry that a delay will cost you the support of your board, your boss, your customers, your employees, your suppliers, and the general public. I have found, however, that when everyone is shouting for a quick fix, you should find the courage to hit the pause button
If you move too swiftly to solve a problem, you may only make it worse.
GATHERING MULTIPLE PERSPECTIVES
Each human being possesses a unique set of mental maps. No two people interpret reality the same way
You might be wondering what this has to do with culture work. A lot
If you want the full picture, you need to look at the culture through many different sets of eyes
What exactly do people from the C-suite to the front lines see? Successful change leaders ask that question over and over and over, until they gain a full picture of what’s really going on in the organization
Putting the different perspectives on the table helped the supervisors and senior managers to appreciate the alternative views of the situation and to move on to working together to solve their problems. Seeing the different perspectives is often one of the first steps towards solving complex culture problems, that impact multiple parts of a business or team
I must add a word of caution, however. You should conduct initial interviews and conversations with a promise of strict confidentiality. Otherwise, people may not open up and share their frank opinion about what’s happening in the organization. Later, when you bring people together to discuss the problem, you can offer anonymous points of view that will spark honest and open conversations in an atmosphere where people do not fear reprisal for offering negative opinions. It can be easier to discuss some of the complex issues associated with workplace culture, if an independent person (e.g. HR employee or external consultant), puts the topic on the table for discussion
ADDING UP THE NUMBERS
Talking to people gives you the soft data about what’s really going on: the ways of relating between the parts and subjective thoughts and feelings about their colleagues, their work, and the organization. While that provides extremely valuable information about what’s happening in the organization, it does not give you everything you need to get the whole story about the current culture. You need to add hard data, the facts and figures that give you something to measure. Remember: If you can’t measure it, you can’t change it. Quantitative information adds a crucial factor to a culture diagnosis, providing hard data to support the qualitative findings
This hard data about the soft stuff ?revealed a big gap between what was going on now and what needed to be going on in the future. I call this gap, culture misalignment. With numbers attached to the current culture at Waterworks, Chloe could set some specific, measurable goals
Whether you hire an outside consultant or ask your HR team to conduct a culture assessment, make sure that you do not begin to implement a culture change initiative until you have gathered all the data you need to make the best possible decisions about what to change and how to change it
UNDERSTANDING HOW PEOPLE INTERPRET THEIR EXPERIENCES
Human beings naturally wish to make sense of their world. We are sense-making creatures who are constantly gathering data and seeking to make sense of our worlds
As you diagnose your current culture, make sure you understand the meaning that people are giving to their experiences at work. What meaning do your people ascribe to events at work? What do people think about their work, their colleagues, and the organization? What makes them feel good? What makes them feel bad? You must know the answers to such questions before you launch a culture change initiative
SEEING THE BIG PATTERNS
I used a spiderweb as an analogy for workplace culture. The individual threads of the web are the behaviors but it is the pattern that connects these different strands. You must see the web (the pattern) as well as the individual threads (the behaviors). Unlike the clearly visible pattern of a spiderweb hanging from a branch in the garden, a culture’s patterns are not always so easy to see
Nothing will more quickly ruin a major change effort than a failure to see the patterns that govern how people relate to each other in the organization. In most organizations, the big patterns have become almost invisible. One of the main objectives of this first step, Diagnose, on The Culture Disruptor is to make the patterns visible. Failure to identify the big patterns at this stage, can mean that you take a wrong turn early on in the change journey. Once you correctly identify the patterns, you can greatly increase your chances of putting the right solutions in place that deal with the underlying issues (not the symptoms).
5 REFRAME THE ROLES Turning Everyone in the Organization into a Change Leader
KNOWING WHAT YOU CAN AND CANNOT CHANGE
One popular approach to altering behavior in the workplace addresses personality rather than role
There are three major influences on how we are wired to behave: instincts, personality, and role. Researchers tell us that we all possess powerful instincts that have evolved over millions of years. These include the instinct for survival, an instinct to connect with fellow human beings, and an instinct to protect our offspring. These drivers of human behavior have been so hardwired into our brains that we find it almost impossible to counteract them
We all carry around mental maps of the multiple roles we take up every day
We all use mental maps to guide our behavior. These maps define our roles and tell us how to act in various situations
When you decide to change your organization’s culture, it is often advisable to avoid trying to tackle hardwired instincts or asking people to change their personalities. Instead, focus on what you can more easily and more quickly change: the roles that guide people’s behavior in your workplace
So where should you begin reframing roles? It usually makes sense to start at the top, and then work your way down the levels of the organization
Compare it to a football team. If you want to field a championship team, you want to hire a management team that thinks and acts like talent recruiters. The management team hire a head coach to play the role of performance enhancer. The head coach assembles a group of assistant coaches who serve as skills trainers, teaching and inspiring the players to play like championship contenders. Even the junior employees on the sidelines think of themselves as attendants to champions rather than the mere watergirls or waterboys.
TAKING UP YOUR ROLE AS CHANGE LEADER
Over the past thirty years, I have asked dozens of senior leaders to describe how they view their role within the business. The responses have included
These executives did not describe their change role, despite the fact that they were presiding over major transformation efforts in their organizations. This begs the question, How can you expect a change initiative to succeed if you do not define your role as the ‘chief change officer’? Of course, all leaders must maintain a mental map that guides their daily work with respect to the basic requirements of running a business, but they must add to that map their role to lead the business from an old to a new culture, if necessary
It’s always tempting to keep on doing what you have always done, perhaps spending all your time attending to pressing business demands or putting out fires, but when you embark on a change effort, you must put your change initiative at the top of your daily to-do list. In my experience, that means devoting at least 20 percent of your time to leading and overseeing the change agenda, especially in the early days
TURNING THE LEADERSHIP GROUP INTO CHANGE LEADERS
By reframing the role of his leadership group, he had taken a crucial step on the change journey
Key change lesson: that a single, visionary leader cannot carry all of the responsibility for change
Even the most capable leader can’t lead culture change alone.
needs the support of a committed leadership group, working together on the transformation agenda. Every member of the leadership team must reframe their role to change leader in order to deliver the change
Successful change leaders understand the power of getting leadership alignment when it comes to the change agenda. The best leaders work hard to do that
MOBILIZING BUSINESS UNITS TO CHANGE
Astute change leaders reframe the role of entire business units in order to accelerate the change effort. Employees in business units tend to develop a shared a mental map of the role that they take up within the organization. Transformational leaders adjust these business unit roles, in order to bring about faster change
Successful change leaders realize that members of a business unit must replace current mental maps with new ones that support the change initiative. The simple act of reframing can help everyone pivot in the right direction during culture transformation
The CEO reframed the role of head office from order giver to support giver. This sent a clear message: Your job is to help the branches deliver better service to customers.
He also reframed the role of those working in the branches from order takers to service deliverers. This sent another clear message: Your job is to anticipate and meet the needs of our customers and the communities we serve.
Reframing the roles created a new pattern between branches and head office from Mistakes and errors are your fault to We work together to serve the customer
ALIGNING EMPLOYEES WITH THE MISSION
Do you think of yourself as an employee? The word suggests a certain pecking order that separates leaders from workers. During transformational change employees must be invited to make the change happen within their areas of responsibility. In the context of a culture change initiative, everyone, from the chairman of the board to the janitor, must adopt the role of change leader.
Patrick Houlihan, the leader of DuluxGroup understood the power of enrolling all employees in the change agenda. When Patrick took over as CEO in 2010, he launched a campaign stressing the newly designed values that framed the role of all employees to run the business as your own. To prove his commitment to that way of thinking about your job, he gave all his people the opportunity to own shares in the company.
By 2015, however, a careful analysis of the DuluxGroup culture revealed that his people were focused more on running the business than growing the business. Patrick decided to change that. He started with a program called Grow and Think Beyond that reframed the role of his people as Growth Enablers as well as Deliverers. He expected them not only to run the business but to grow the business by creating new products and entering new markets
Four years later, Patrick was seeing significant progress, especially when word of the amazing growth-oriented culture at DuluxGroup reached some folks who were looking to buy a major Australian company
This accomplishment provided incontrovertible proof of Houlihan’s ability to reframe the roles of his employees in order to create a culture that could deliver, grow, and adapt.
Houlihan knew the power of getting his people onto the same page of the change agenda. When the leaders at Nordstrom, the upscale department store, wanted to engage employees in their quest to create a truly customer-centric culture, they also redefined their role. But rather than producing a binder with hundreds of pages describing the behaviors the company’s leaders thought would make this happen, they formulated one simple rule. Showcased in the employee handbook, this rule reframed the role that each Nordstrom employee should play in the culture:
Rule #1: Use good judgment in all situations. There will be no additional rules.
This rule of good judgment in all situations invited employees to move from the role of shop assistant to the role of business owner. Rather than merely assisting customers with their purchases, Nordstrom’s people should own the outcome
This reframed role immediately influenced people to go out of their way to eliminate the pain points for customers. As business owners, they began to look with fresh eyes at their customers’ experience shopping at Nordstrom, from what customers saw the moment they entered the store to their experience with their purchases at home.
Underscore the word simple. Anyone hoping to engineer a culture change should summarize new roles in clear, concise, and compelling terms. You might recognize the Boy Scout motto: Be Prepared. Rather than suggesting that boys behave properly, the motto (or call it the reframed role) reminds them of the values that should guide their every action
Being Prepared
The Scout motto Be Prepared means remaining ready to do whatever you can to help others, It also means that a good Scout prepares to react quickly and effectively to each and every one of life’s challenges. From those two simple words springs a whole set of tenets that help a Scout live a full and worthwhile life as a physically fit, honorable citizen with a strong character
Can you craft a word or short sentence that captures the role you want your people to play in the change initiative? Don’t settle for the first one that pops into your head. It takes time to write a truly great one. Bear in mind Mark Twain’s apology for sending a long-winded letter to a friend: I would have made it shorter, if I’d had the time.
You can reframe roles in multiple ways. At Southwest Airlines, CEO Herb Kelleher defined the company’s expectations of employees in three organizational values:
Apple defined the service role that its store staff should bring to their interactions with retail customers. The acronym A-P-P-L-E makes it easy for employees to remember the steps:
Google relies on a mission statement to help define the role of employees: To organize the world’s information and make it universally accessible and useful. Susan Wojcicki, Google’s senior vice president of advertising, talks about the power of this mission statement to instill desired employee behavior. We use this simple statement to guide all of our decisions. Our mission is one that has the potential to touch many lives, and we make sure that all our employees feel connected to it and empowered to help achieve it. In times of crisis, they have helped by organizing lifesaving information and making it readily available. For instance, Google’s people launched a Person Finder tool within two hours of the 2011 Tohoku earthquake and tsunami that struck northeast Japan
Let’s say you want a customer service team to replace prepared scripts with a question-and-answer approach tailored to each customer who calls to complain about a product your company sells. Do you tell shy Cameron to become a more outgoing and curious person? No, you reframe his role to one of questioner and then show him how to ask questions that show empathy for the customer and get to the heart of any dissatisfaction with a product. Cameron does not become more gregarious, but he does learn how to replace his old role of script reader with the new role of questioner. Now he behaves in a way that displays his concern for whatever has upset the customer. What can I do to help you? Have I answered all your questions? Is there anything more I can do for you? We each hold a map in our heads that depicts the roles we think we need to take up in various situations, but we seldom write them down or share them with others
You might try this little experiment in role reframing. Write down a role you step into, say book reader. Then imagine revising your role from book reader to culture researcher. Adding that new role to your map does not mean that you will behave in an inauthentic way. It just means you are choosing to expand your behavior beyond your usual modus operandi. Now, rather than absorbing information about culture, you are thinking of ways you can apply what you are learning to your own change efforts
What does this have to do with aligning employees with the mission? Roles influence behavior. Stepping into the appropriate roles will prompt people to act in a way that produces desired changes. This basic tenet of effective leadership applies to any effort to change an organization’s culture. But, you may object, this seems so manipulative, getting people to act in unaccustomed ways, in ways that run counter to their normal behavior.
Not at all. Think about the roles you play in a given week. How do you behave at work, and how does your behavior enable you to do your job? If you work as a sales representative for a medical company, you dress and act in ways that help you build good relationships with the physicians you visit
Are you married or single? If you go out to a bar for a drink after work, you would behave one way if you hope to meet your future partner, and another way if you are going home to your spouse. If you work out at a gym or play a competitive sport, such as golf or tennis, you behave in ways that suit those activities. Now, suppose I ask you to help me deal with an emergency, perhaps helping people who have just survived a train wreck. Basically, I might be asking you to take up a role you’ve never played in your life. But you would probably try to step into this role and act in a way that meets the demands of this situation
6 TAKE CHARGE OF THE JOURNEY Becoming an Inspiring Change Leader
Ben Harkness, the CEO of BuildItPro, the underperforming infrastructure company we discussed earlier in this book, had grown impatient with the change initiative designed to create a more productive and commercial culture. We’re trying to become leaner and meaner, but we’re just getting fatter and slower, he complained me in one of our regular catchups. We can’t even get that new billboard up on the roof. To promote BuildItPro’s new brand, the marketing department had designed a beautiful image of speeding race cars that would show the world that the company had become a highly responsive and productive enterprise. Although he had approved the design four months earlier, the advertising billboard still hadn’t appeared on the rooftop. Ben shared his frustration with everyone but Henry Tucker, BuildItPro’s head of marketing. He didn’t want to have the difficult conversation with Henry.
I stepped into my role as Ben’s coach. I suggested that, by not giving feedback to Henry about the billboard delay, he may have been fueling the pattern of poor performance in the company. Ben got it immediately, Yes, I’ve got to lead by example and stop playing Mr. Nice Guy. That day, he pulled together his executive team and opened the meeting with a little speech about holding the necessary conversations about BuildItPro’s problems. Henry, where is that billboard? A lively discussion ensued. At the end, Henry promised he would get it done by the end of the week. Everyone who attended that meeting took the message about candid conversations back to their people.
Leaders must break the deeply embedded patterns in the culture
Ben was beginning to realize that culture change never happens until the leader steps up to break the prevailing patterns in the old culture. Leaders cannot simply stand on the sidelines and observe the journey. Their behaviors can either serve to fuel the old culture, or bring about a change to the new ways. If you take up the role of the business-as-usual boss, people may pay lip service to change and keep on doing what they have always done. Step into the role of change boss, and you can inspire people to get on board with the transformation. This brings us to the third step of on The Culture Disruptor, Break the patterns
Patterns are at the heart of workplace culture. When it comes to breaking old patterns, it helps to study how other leaders have done it. The automobile industry offers three excellent cases in point
TACKLING DEEPLY EMBEDDED PATTERNS
Remember Ben Harkness, the BuildItPro CEO we met again at the beginning of this chapter? Ben caught up with me to debrief the meeting he’d had with his leadership team that week, where he’d given Henry Tucker feedback about the billboard. Ben admitted: I’m having trouble with the tough performance conversations. I think I’ve always been trying to take up the role of Mr. Nice Guy.
Why’s that a problem? I asked with a smile. What has it got to do with BuildItPro’s performance?
Ben thought for a minute. Um, maybe people see me taking up the role of happy-go-lucky boss and think I’m OK with poor performance
I raised an eyebrow. And?
And Henry Tucker in marketing figured he could take his sweet time putting up that billboard because good old Ben wouldn’t do anything but flash that Mr.-Nice-Guy grin if he didn’t get it done in a timely manner
Yes. But before we explore that, let’s put it all in its proper perspective. We’re talking about patterns—it’s important to always remember how patterns fit into the scheme of things. Your mental map influences your role, your role shapes your behavior, and your behaviors help co-create the patterns in the culture. You can leverage these mental maps, roles, and patterns as you change the BuildItPro culture, I explained as I drew The Culture Disruptor in my notebook for Ben (Figure 6.5). Transformational leaders work with these three key elements of culture in order to bring about change.
I then shared one of my thoughts with Ben about one of the patterns at BuildItPro. One of the big patterns I see in a lot of companies, especially with new managers and executives, is the natural tendency to want to be liked. I call it ‘The Likability Pattern.’ Here’s what it looks like in your case. Notice how taking up the role of Mr. Nice Guy in the culture allows your employees to step into the role of underperformers. It’s easy to slip into the pattern, and it’s hard to break out of it
Ben almost jumped from his chair. Yes, that’s exactly what’s going on! It’s high time I changed the game! Can you draw a new pattern, one that makes accountability for performance the new way of doing things in the culture?
I nodded. Sure. I can do that. Look at the accountability pattern that emerges if you redefine your role as a performance manager, who gives achievers feedback and holds them to account for performance outcomes
Ben took that insight back to the office. With his new perception of how his role cocreated a pattern he needed to break, he began to give people frank feedback about their performance. He praised people who achieved the results that the company needed and he held people to account who did not meet his performance expectations. These constructive conversations were designed to help employees get better results. This coaching proved invaluable. Many underperformers began to show measurable improvement. Those who did not accept the new ways were encouraged to find more suitable employment elsewhere. Ben was no longer Mr. Nice Guy, but instead he had stepped into the role of performance manager who gave his people the constant feedback they needed to lift their performance at work.
It took time, but it worked. Within six months, his people were actually valuing the feedback conversations about their performance, racking up significant improvements, reducing mistakes and waste, and enjoying their roles as achievers. Does this sound a little too good to be true? It’s not
Never underestimate your power to change the culture, simply by changing your behavior.
While culture change requires a shift in your behavior, you cannot do it alone. You need the help of a team of co-creators. In order to persuade key stakeholders to enlist in that change effort, you must create a compelling case for change
MAKING A COMPELLING CASE FOR CHANGE
To convince people to join a change, that may involve some personal or business risk, you must build a case for why the transformation is important to your organization. People will not join the change effort unless they have a compelling reason to do so
The business case moves culture change from an optional extra to a must-have undertaking
Let’s assume you have made your case. You’ve rallied the team. Everyone is eager to create a better future. So, what’s your plan?
PLANNING FOR CHANGE
I always ask leaders who are beginning a culture change initiative an innocent question: What’s your plan? I’m never surprised when that question elicits quizzical looks or blank stares. In my experience a clear plan is often the missing piece during culture transformation. Culture change falls outside the comfort zone of some managers. These bosses can prefer to focus on the problems they know how to solve, rather than on the culture issues that they actually face. Nothing will doom a change effort more quickly than the absence a well-thought out plan of action.
As a manager, you would not dream of constructing a factory, implementing an upgrade to your IT systems, or opening a new store without a project plan. You would probably insist on reviewing this plan in detail several times before you embarked on the project. So why do bosses tolerate a lack of planning when it comes to changing workplace culture?
The answer to this question lies in the fact that many leaders feel more confident working on the technical challenges they face every day than they do the complex issues that surround something as ambiguous and difficult to manage as culture change. If they have trained as accountants, engineers, or chemists, those roles have become an integral part of their identity at work. You want help forecasting return on capital investment? No problem! You want a bridge built across that mile-wide river? Sure, I can do that! You want a new paint formulation that can resist the harshest weather conditions? You bet! But ask these highly competent executives to transform the culture in their functional area, and they stare like a deer caught in the headlights of a speeding road train
Culture is a complex, adaptive challenge, with no easy answers or ready-made solutions. It requires leaders who can plan a course of action, in the midst of uncertainty and ambiguity, because the change will not happen by itself or simply by publishing a new set of corporate values
Some leaders prefer to focus on the problems they know how to solve, rather than on the culture issues they face
Your culture plan examines your greatest levers for change. Should you restructure your organization to focus more intently on the customer experience? Would that require a new performance management system that measures the degree to which people take accountability for results? Does that mean you must revamp your training programs to emphasize the new values you want people to honor? What will the changes cost? How will you find the money to invest in these changes? Your own list should include the unique set of variables your plan must address. A word of caution: avoid making a long list of priorities. In my experience, you should initially focus on the top three.
When you set too many priorities, nothing gets done
A good plan doesn’t just describe what you will do, it tells you what you should not do. Good change leaders make the hard decisions and allocate scare resources to the highest priority areas. In any change effort, some people win, some lose. If your plan calls for elimination of a historical position or the cancellation of a pet project that conflicts with the tenets of the new culture, you need to prepare yourself to say no to people who rebel against the decision. Making exceptions will fuzz your focus on important steps and even detour you from the path to better results
Once you have developed your plan you may be eager to embark on the change, but I strongly advise that you pause and test the waters before you invest all of your time and energy and dollars in the full roll-out
TESTING THE WATERS
During an ambitious culture change, you will find few, if any, ready-made, easy solutions to the problems you are trying to solve. It involves so many uncertain and ambiguous elements that it pays to conduct experiments that will show you what works and what doesn’t work. I call these experiments lighthouse projects because, when they do work, they shine the light for everyone else who will eventually join the journey.
7 ENGAGE THE ENTIRE ORGANIZATION Mobilizing the People Who Do the Work
Hundreds of SpaceX employees have gathered around computer consoles at the Kennedy Space Center, waiting anxiously for the test flight of the Falcon Heavy, the most powerful space rocket ever assembled. SpaceX is the brainchild of its CEO, Elon Musk, the inventor of the revolutionary Tesla automobile. He has set ambitious goals for SpaceX: reduce the cost of space flight by returning the expensive rocket’s boosters to Earth, and take a major step toward his dream to colonize Mars. The rocket carries the CEO’s personal midnight cherry red Tesla Roadster, with a dummy astronaut nicknamed Starman sitting in the driver’s seat. To the underside of the sports car, workers have affixed a plaque bearing the names of every SpaceX employee who has worked on the Falcon Heavy project
Elon Musk built a passionate and high-performing culture at SpaceX that motivated talented people to reach for the stars. He did it by proclaiming an inspiring mission (on Twitter in March 2018): Life cannot be just about solving one sad problem after another. There need to be things that inspire you, that make you glad to wake up in the morning and be part of humanity. That is why we did it. We did it for you.
Your business may not aim for the stars, but it does something that customers want and need. Whether you manufacture children’s toys, play on a sports team, serve burgers at a local hangout, or build computers, you must find ways to do what Elon Musk did. In your continuing quest to break out of the old patterns, you must establish a mission that gives meaning to the work and motivates people to go above and beyond their mere job descriptions to fulfill this vision
MAKING THE WORK MEANINGFUL
Purpose. Like culture, it’s a simple but elusive word. No matter how you define it, however, it’s the fuel that drives every successful company’s performance engine
Success depends on purpose and meaning, but it also depends on the right people doing the right work at the right time
CHOOSING THE RIGHT PEOPLE
The people in your organization make all the difference in the world. But they need to align wth your culture
Leaders in great cultures focus on hiring the right people for the job
In successful cultures, leaders hire people who will bring the desired culture to life
Leaders in great cultures work relentlessly to find the right talent for their team. They also weed out those who don’t buy into the culture’s values and who fail to demonstrate them in everything they do. It may seem a little harsh, but great leaders are prepared to let talented people go, if they do not meet the culture expectations
That doesn’t mean that the right people always have the answers. No, the right people solve the right problems at the right time
TURNING EVERYONE INTO A PROBLEM SOLVER
Leaders in high-performing cultures realize that they don’t have all the answers. When problems emerge (and they always do), they rely on their people to come up with the best solutions. It turns out that the most creative and often surprising solutions come from those who do the work
A problem-solving culture inspires people to come up with wildly successful solutions
This may sound fairly straightforward, but it can take time and hard work to create a problem-solving culture. As you guide people on the journey from the old way of expecting someone else to solve problems to owning the problem and solving it yourself, you must nudge people out of their comfort zones, replacing their old mental maps and roles with new ones. That takes more than good intentions and well-crafted values statements.
Leaders who push people to change or threaten them by saying, You must do this, or else! find that the harder they push, the harder their people push back, often in subtle ways that end up sabotaging the cause. It’s far better to create an environment that gives people the freedom to solve problems
KEEPING THE TEAM’S EYES ON THE PRIZE
A sense of belonging can help to create a high performing culture, where people give their discretionary effort to the achievement of the team’s goals
Every business must perform financially or go into decline. Outperformance does not happen by accident. It happens when people strive for goals that may at first seem beyond their grasp. Effective leaders set challenging goals that will require everyone’s utmost effort and creativity
We all need targets in our work. They help us to gauge how we are tracking in the achievement of our goals. The more concrete these goals can be, the better. The Results Converted shows you how you can translate abstract wishes into concrete objectives. So best in class performance might become, achieve a 25 percent increase in net profit. The vague goal of new product innovation might shift to reach $14 million revenue for the new X Factor product. An ambition to delight customers’ might be replaced by, ensure 95 percent of customers are extremely satisfied. Finally, instead of wishing to be the best football team, the Sheffield United Football Club might focus instead on winning the FA Cup.
Try setting your own concrete goals to create a focused and higher performing team.
As the ancient proverb holds, every thousand-mile journey begins with a single step. Since the whole journey may take a few million steps, you need to give people feedback about their progress along the way
MASTERING THE ART OF CONSTRUCTIVE FEEDBACK
Feedback helps people see their progress (or lack thereof) as they move toward their team’s or their organization’s goals. It reinforces their will and provides guidance on why they should break out of the old habits to improve their performance. Great change leaders offer frequent positive, appreciative, and constructive feedback that nudges the culture toward the desired future state
Constant constructive feedback helps employees assess their progress as they strive to achieve the change goals
When successful change leaders catch people doing terrific work to achieve the company’s goals, they shine a spotlight on those achievements. Early achievers become role models for others. When someone in your organization displays highly prized cultural traits, turn that person into a beacon for others to follow
Good teachers get results with reinforcement. Good students enjoy the learning that comes with constructive feedback. Whatever the cultural traits you want your people to learn and apply in their work, reward them when they perform well, and give them appreciative guidance when they fall short of the mark
Feedback need not come solely from above; it can come from the folks with whom you work shoulder-to-shoulder every day. Whatever its source, it reinforces the way people think about and perform their work
In great organizations the leaders understand that the culture is shaped in every single interaction. They reinforce the new expectations, monitor the standards, and give regular feedback to employees about how they are tracking. In high performing cultures the leaders realize that they have to do more than simply publish the expectations, if they are to see change to happen
Successful change leaders move beyond the slogans to bring the culture to life every day at work
Effective leaders create the culture in their daily interactions and behaviors. They reinforce the new ways and embed the emerging practices. These bosses realize that culture does not arise from slogans, mantras, or values statements assembled by the HR department. They employ daily routines to remind people about what matters and they reinforce the desired culture at every opportunity. In the next chapter we will examine how you can also reinforce the new patterns by aligning your organization’s processes, policies, and procedures to the aspirational culture
8 ALIGN PROCESSES, POLICIES, AND PROCEDURES Designing New Work Systems and Spaces
Businesses have always relied on systems and processes and policies and procedures that enable their people to satisfy customers and deliver business results. New technology makes it possible to do it bigger, faster, and smarter. Companies that get it right lock in greater customer loyalty
Culture is a people thing, but it’s also a process thing. During the third step on The Culture Disruptor (Break the patterns) you can leverage process and system changes to create the desired culture. Aligning your processes, procedures, policies, and physical environment to your change goals, can strongly reinforce the aspirational culture. Changes to these systems and spaces can help you continue on your journey to break the old patterns. Whatever new and disruptive technologies emerge in the future, smart leaders will always need to pay attention to what I call the five key system levers during culture change: Digital Technology, Performance and Reward Systems, Processes, Policies, and Procedures, Business Remodeling, and the Physical Environment
System changes can reinforce your desired culture, but only if you simultaneously shift the underlying patterns—otherwise people are likely to work around the new systems to go back to the old ways of doing things. Let’s start by examining how digital technology can accelerate culture transformation
EMBRACING THE DIGITAL FUTURE
I’d like to offer a few examples from ancient history, all the way back to 2018. That year, Starbucks, one of the best-known companies in the world, operated more than twenty-eight thousand stores globally. It didn’t do that by making the best coffee in the world; it did it by placing a huge bet on integrating digital technology into its brick-and-mortar in-store experience, with the company’s Digital Flywheel, an innovation that dramatically changed customer behavior patterns by enabling coffee enthusiasts to order and pay online
There’s one key reason why leaders embark on culture change: to get better results. In business, often it comes down to more effectively and efficiently connecting with customers, providing ever more convenient and delightful customer experiences, and forging undying customer loyalty. Even a coffeemaker does it. Technology has been advancing at such mind-bending speed, these examples will be outdated before you turn this page
Starbucks cemented customer loyalty through a combination of user rewards, a personalized app, easy payments, and online ordering. By 2018, a full 18 percent of Starbucks’ 75 million customers were using the company’s mobile app to generate 36 percent of the company’s sales (according to TechHQ). Starbucks could even personalize the app to help boost sales and encourage customers to buy additional items
It may seem like an obvious and easily implemented decision now, but adaptation to the digital world requires overhauling substantial parts of the organization, no mean feat for a company as big as Starbucks
It may sound easy after the fact, but digital transformation is tough, especially if it involves overhauling a multinational corporation, like Walmart
Applications like Erica enable organizations to engage more deeply with customers, especially the much-sought-after eighteen-to-thirty-four-year-old demographic. According to Bankrate, 64 percent of millennials surveyed in 2018 said they had at least one full-service banking app on their phone
No matter what technologies you adopt to serve your customers more quickly, it won’t happen without the human touch
Remember that culture is how (people make) things work around here. Machines can do a lot of things, but they cannot (and I bet they never will) fully duplicate what people can do: apply common sense, dream up new concepts, develop keen self-awareness, connect seemingly unrelated dots, invent the better mousetrap, and feel true love and compassion. People need people. They also need recognition and rewards for a job well done.
FINE-TUNING PERFORMANCE AND REWARD SYSTEMS
The performance and reward system in an organization can create a culture for good or for greed. These systems send powerful signals to employees about what the organization values and what rewards they can expect to receive if they honor those values
More and more companies are redesigning the way they reward performance
Rewards send signals to employees about what’s really valued in the culture
Employees look to their leaders for signals about what’s important and how they should behave. If you want a new culture to stick, you should link rewards to accomplishing the change agenda. That will capture people’s attention, sending a powerful signal about what matters most to the organization’s leaders. The best reward system communicates that those in charge are not just paying lip service to the need to change the culture; they will reward people who help them get it done
Notice that I did not say, Pay people who help them get it done. Money talks, but so do other forms of recognition. Sometimes the other forms talk even louder than financial rewards. Psychologists refer to cash payments and promotions as extrinsic rewards, meaning that they warm you on the outside. When your boss gives you a 10 percent raise and promotes you to assistant vice president, you can buy more wood for the fire. But that does not necessarily motivate you to earn more wood next quarter. You’ve got all you need for now. On the other hand, intrinsic rewards such as praise and trophies warm you on the inside. When you do something exceptional at work, your boss gives you an Achievement Award to recognize your contribution
The glass plaque, with your name etched on the surface, sits on your desk and every time you see it, it reminds you of the awards night and it continues to inspire you to do your best work. Human behavior can be bafflingly complex and you cannot rely on a simple carrot-and-stick approach during change. It is worthwhile spending time exploring how to align intrinsic and extrinsic rewards with the change objectives. Aligning your processes, policies, and procedures to the desired culture can also accelerate change. And these are the Three Ps.
ALIGNING THE THREE Ps
Breaking the old patterns in the culture often involves aligning the Three Ps: Processes, Policies, and Procedures. If any of these Three Ps is working against your objectives for the culture, it can slow down or stall your change efforts
Yes, you need formal, well-thought-out, published policies and procedures. And you need well-oiled processes for getting the job done. Otherwise, chaos can ensue. Work processes that are clear and understood, can help employees to quickly align on how to tackle the task at hand. Policy and procedure documents can help people do their jobs without having to check in with the boss. They help companies manage risk by mandating standards about how employees should conduct themselves. During culture change, they can speed up organizational learning and prevent people from constantly reinventing the wheel. The right documentation can prevent second-guessing, cut through endless discussions, and provide employees with clear guidelines. Another way to provide people with clear guidelines for action, is to redesign the operating model for your business.
Appropriate policies and procedures can speed up organizational learning during culture change.
REMODELING THE BUSINESS
Breaking out of old habits invariably requires some shifts to your business model. Shifts come in all sizes, from small process improvements to a complete reshaping of the way a company does business. But you must take care that you don’t simply rearrange the deck chairs on your ship while it continues to sink in a sea of red ink. Organizational restructures can move people around, without producing any real transformation. After all the navel gazing, people may go back to their old ways of doing things and the dysfunctional patterns continue
Nike’s 2008 restructure, designed to create a more agile and growth-oriented culture, offers an excellent case in point. Nike had originally structured itself around product lines, with various departments selling equipment, apparel, and footwear. When Nike’s leaders realized that consumers wanted to buy complete outfits appropriate for their favorite sport, they decided to restructure along sports categories.
Nike’s leaders sat back and waited for the results of this thoughtful remodel. Surely, customers would love it. But they didn’t. Despite some early gains, they watched sales continue to sag. They had restructured the business, but they had not fixed the real problem: shoe styles their customers found outdated and boring
Restructures give leaders the opportunity to fast-track change by reframing the role of different parts of the organization
Leaders who bring about real and lasting change by remodeling their business do not just imitate their rivals or jump on the latest organizational theory. They bring imagination and a passion for inspiring their people and delighting their customers to the undertaking.
Satya Nadella did just that when he became CEO at Microsoft in 2014, inheriting an organization that had stopped producing trailblazing products. Realizing that he needed to steer the company into a post-PC, cloud-centric era, Nadella launched a major restructure aimed at moving Microsoft away from selling packaged software to offering subscription-based cloud services. This move not only responded to the shifting marketplace, it attacked the old Microsoft culture that suffered from too much unproductive, internal competition
The restructure connected people to a new purpose-driven cause by grouping all products into wider organizational units, each with a specific role, such as building the intelligent cloud platform or creating more personal computing. As the CEO explained in an email to employees: Perhaps the most important driver of success is culture. Over the past year we’ve challenged ourselves to think about our core mission, our soul—what would be lost if we disappeared. . . . We also asked ourselves what culture we want to foster that will enable us to achieve these goals.
Nadella’s business remodel had broken the old ways in the Microsoft culture and made all that happen. It led to happy customers and investors, and it also created a collaborative workplace where employees worked hard to achieve the company’s mission.
TAILORING WORKSPACES TO SUIT THE CULTURE
You can hire architects, builders, and interior designers to create physical workspaces, but you won’t end up with an environment that fully engages people in the change, if you do not match the space to the culture you are creating. The setting in which the work takes place must go beyond four walls and a bank of windows, it must inspire people to act in ways that match the espoused values in your culture
Smart leaders reflect the culture in the look and feel of the workplace.
Astute leaders know that the setting in which the work takes place can have a major impact on how people think, feel, and interact in the workplace
9 GATHER CHANGE MOMENTUM Enabling the Change to Spread Rapidly
In scientific terms, a tipping point represents a threshold at which an infectious disease spirals out of control and runs rapidly though a community. In culture terms, it is that point at which the new culture begins to take on a life of its own, spreading like wildfire as it captures an increasing number of employees, customers, and community leaders until it becomes how things work around here. The change has gone viral. Nothing can stop it now
In the third step of change, your aim is to break out of the patterns that no longer serve you and reach that crucial tipping point. To reach this point where the game changes completely, leaders must first deal with the change blockers
DEALING WITH THE BLOCKERS
The Harvard professor Dr. Robert Kegan spent his career researching why people so often fail to change. Why on earth, he wondered, would six out of seven heart patients stick with their old bad habits, such as an unhealthy diet, too little exercise, and smoking, when their doctors have told them their old habits would kill them? It turned out that, despite the threat of death, a heart patient may know he should do the right thing but falls back on bad habits because that’s not how he has always lived his life. I can’t do it that way because that’s not how I do things around here.
That’s why it’s so hard to change human behavior. You can’t just tell people to do the right thing; you must tackle their underlying assumptions (I might get bitten by a shark or I can’t get going in the morning without a cigarette). These assumptions can be hard to detect, like the body of an iceberg. Above the surface of the water, an iceberg can look pretty small, but underneath you’ll find a mass of ice that can sink the Titanic
On April 10, 1912, the largest ship ever built (at that time) embarked on its maiden voyage from Southampton to New York, its passengers delighted with the luxurious accommodations and looking forward to a smooth and problem-free cruise. Those hopes were shattered when, four days into the voyage, the ship collided with an iceberg’s jagged underwater spur that tore a three-hundred-foot gash in the side of the Titanic. How could a supposedly unsinkable ship go down in the icy waters of the North Atlantic, taking the lives of more than fifteen hundred people? You could ask the same question when supposedly too big to fail companies like Goldman Sachs get into trouble. Look closely enough, and you’ll see that culture (and the deeply embedded assumptions that sustain the culture) was a key causal factor. What assumptions threaten your organization?
The assumptions, held at a collective level in the culture, can serve to protect the organization against the potential dangers that change can bring. However, these assumptions can also stop you from adapting and growing
If you want to identify and change the deeply embedded assumptions that could threaten your organization’s change efforts, you should take a long, hard look at the reasons behind those assumptions.
UNDERSTANDING THE REASONS FOR YOUR CULTURE’S ASSUMPTIONS
Before you can overturn the assumptions that are blocking your culture change efforts, you must first discover the reasons these assumptions developed in the first place
Why do company leaders so often fail to see and react to the threats and opportunities in the marketplace? Well, it usually involves some basic beliefs or unchallenged assumptions that have been guiding decision making
Gathering change momemtum often means overturning collective and deeply held assumptions
The company’s culture centered on reciprocal loyalty and a fierce esprit de corps. In the early days of rapid expansion, close bonds developed between employees at BuildItPro. These strong relationships helped them to survive in a new country and to get the job done on challenging construction projects in far-flung locations. Another assumption developed, in this family culture, that you need to fit in and be liked around here. This assumption ultimately led employees to value their relationships at work, more than their performance on the job
The business suffered as a result. People were taking shortcuts, letting standards slip, and ignoring the industry’s rules and regulations. Rather than replacing underperformers, management simply moved them from one project to another, hoping those who performed poorly would do minimal damage. Managers did not want to fire people they viewed like their brothers and sisters. Somehow, we needed to reframe roles from family members to work colleagues
During the workshops, we encouraged managers to question the old assumptions and to determine whether they still made sense. It began to dawn on the managers that you do not do employees a favor by ignoring their poor performance. On the other hand, you do them a real favor when you coach them to better performance or release them to look elsewhere for more satisfying work. That idea set the stage for a new assumption: In this company, everyone must carry their weight. The workshops reframed the role of managers and helped overturn the old assumptions that were blocking change. The managers stepped up to break the old pattern and started to hold people to account for performance outcomes
Gathering momentum on the change journey can feel like an uphill battle. For the change to spread rapidly, you will need to get past middle management
GETTING PAST MIDDLE MANAGEMENT
While organizational leaders are warming to the idea of change, the middle management layer can remain unconvinced about the merits of transforming. Unless you get middle managers on board, you will see very little meaningful change at the front lines of your business
Getting your change messages through to front line staff often comes down to communication
It was important to put the middle managers into their communication role, to carry the change messages to employees. The store managers needed to stop taking up the role of observers and start stepping into the role of communicators.
Successful change depends on middle managers communicating the message to the front line
As the Native American proverb says, Tell me the facts and I’ll learn. Tell me the truth and I’ll believe. But tell me a story and it will live in my heart forever.
CHANGING THE STORY
Since ancient times humans have gathered around fires to share stories. These stories represent our cultural heritage. The ancient stories of Greek heroines Antigone and Athena, The Iliad and other tales originally recited by Homer—these stories codified the values of courage, hospitality, and respect so prized by the ancient Greeks. In today’s business world, stories teach similarly valuable lessons
We share stories in the workplace every day, often with little or no thought about how they relate to our organization’s culture. Shift supervisor Kelly tells her colleagues in the lunchroom about her latest skirmish over the pay deal with upper management. Entrepreneur Isabella describes her vision for a new digital assistant for children to a rapt audience of potential investors. Jeremiah, an insurance company employee, warns a customer that a flood could severely damage her property with a tale of a recent storm. Leaders intent on culture transformation can harness the organization’s stories in the service of the change.
You may not be able to afford a Hollywood scriptwriter or director to tell your organization’s stories, but you can write and collect and tell the stories that break the old habits and bring your new culture to life. Pick and choose the ones that work best; discard those that run counter to the values of the culture
Rose Marcario became CEO of Patagonia in 2014 (having joined as CFO in 2008) and she has remained true to the founder’s story and the vision to create a truly sustainable culture. For the 2016 Black Friday campaign, Marcario promised to donate to charity every dollar in revenues the company reaped that day, eventually more than $10 million. She continued to donate 1 percent of Patagonia’s profits to grassroots environmental groups and by 2018, the company had gifted more than $75 million to environmental causes. Supportive customers spread the word to family and friends, resulting in revenues in excess of $1 billion in 2017—more than triple the profits since Marcario was hired (according to Fast Company).
Tell me a story and it will live in my heart forever. —Native American proverb
Crafting and telling relevant culture stories provides one of the best tools leaders can use to foster change. They can galvanize people at the beginning of the change effort, accelerate change to help reach the tipping point, and propel people in a new direction, if and when the organization needs to transform its culture again. The best ones employ powerful symbols to capture the imagination
EMPLOYING POWERFUL SYMBOLS TO REINFORCE THE CHANGE
Organizational symbols can help you gain change momentum because they help people remember the new cultural traits and break out of the old ways. Symbols take many forms, from the famous white-shirt-and-black-tie dress code IBM employed in its early days, to the US Marine Corps’ memorable slogan Semper Fi. Spacesaver, a leader in commercial storage, understood the power of symbols to help it create its customer-focused culture
You can make yourself hoarse talking about creating great customer experiences, but you can save a lot of breath if you use well-crafted symbols to replace all of that long-winded verbiage employees will forget the minute you stop talking
There’s a lot of noise in any workplace. The explosion of data, the clamoring of social media, and the bewildering pace of technological change can make it hard to see what’s really important. The right symbols can cut through all that noise and signal a shift to a new culture
Try making a list of the cultural traits you want your people to embrace. For each of them, create in your mind’s eye a picture of that abstract quality. You want positivity? Install a bell that’s rung every time your team has a major win. You want teamwork? Create a high-profile Collaboration award. You want customer focus? Implement a new rule: We talk to three customers every week.
Dealing with the hidden assumptions, getting through the middle management layer, and deploying symbols and stories can help you accelerate the change and move from the third to the fourth step of culture change (Consolidate the gains).
10? CONSOLIDATE GAINS Embedding the Emerging Culture
Consolidate (verb): Make (something) physically stronger or more solid; strengthen a position of power or success, so that it is more likely to continue
Any leader intent on building a similarly successful culture must also embed the culture, the fourth step on The Culture Disruptor
When someone asks me how long it takes to change workplace culture, I usually say, It depends. It will vary according to a myriad factors: the strength of the existing culture, the size of the organization, the assumptions in the culture, and how deeply embedded the patterns are, just to name a few. In smaller organizations (or teams), you can achieve a lot in as little as a year, while in large organizations it might take three or more years to make the transformation. In either case, you must maintain unswerving dedication to the change effort
MAINTAINING AN UNSWERVING DEDICATION TO THE CHANGE EFFORT
One of the biggest issues during culture transformation is that leaders can lose momentum on the journey. After an initial burst of energy, you may lose some of your passion for the change and fall back into the old ways of doing things. If that happens, you might take a cue from successful professional sports teams
Consolidating gains often involves people working toward a goal beyond just revenue and profit growth. Do something important, and the money will follow; build a strong culture, and business results will follow
MEASURING YOUR PROGRESS
The old saying You get what you measure holds true for culture change. While some executives think you can’t quantify something as amorphous and hard to grasp as culture, successful change leaders continuously collect and evaluate culture metrics
If you don’t measure it, you will lose it
With a little creativity and imagination you too can measure different types of culture, and I’ve given some sample metrics, to help you get started, in the table on the next page
Figure 10.2. Hard Metrics for the Soft Stuff
Leaders can think of culture not as the soft, relational stuff that resists measurement but as a business dimension that can (and should) be quantified. The extent to which your culture is (for instance) commercial, customer-focused, quality-oriented, innovative, agile, performance-focused, collaborative, or accountable, can all be measured. Once you put metrics in place you can begin see where you need to improve your change capability
BUILDING YOUR CHANGE CAPABILITY
I recently heard one CEO say, Change isn’t what it used to be. Like all business leaders, he was facing the tsunami of change sweeping through every marketplace. All those breathtaking new technologies and competitive disruptions and social and economic upheavals make it impossible to keep doing business as usual
I am not afraid of storms for I am learning how to sail my ship. —Louisa May Alcott
Smith took this insight to Intuit. The company’s leaders, he believed, must help their people become change masters. Specifically, they should
In a fast-changing world you can no longer expect to be able to work with a singular focus. Leaders must move seamlessly from the tactical to the strategic (and back again). They must manage AND lead during times of transformation. The writer F. Scott Fitzgerald put it this way: The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function. With that in mind, every change leader should:
When you stop learning, you stop growing. And when you stop growing, you stop changing. When that happens, you are at risk of falling victim to more adaptive competitors
WATCHING OUT FOR THE OLD PATTERNS
As we have seen, culture patterns are powerful, pervasive, and persistent. No matter how hard you try to consolidate your gains, old deeply embedded patterns can easily reappear and pull people back into the habitual way of doing things
MAINTAINING YOUR ENERGY LEVELS ALONG THE WAY
Culture change won’t happen in a week. And often it won’t happen in a year. You need to sustain your energy levels for the duration of the change. Treat the journey more like a series of sprints, than a marathon, and look after your own (and your team’s) physical needs along the way
I learned the value of energy management while studying team dynamics as an observer at the Sheffield United Football Club. The football (soccer) players went through cycles of intense activity followed by downtime. After an energy-depleting, ninety-minute game, they would thoroughly rest their minds and bodies. At the end of a long, grueling season, they would take time off to recover their energy and repair damaged muscles. The breaks helped ensure peak performances year after year after year.
REMAINING RESILIENT THROUGH THE CHANGE JOURNEY
Culture change is not for the faint-hearted and the journey is full of unexpected twists and turns. Those who prevail possess resilience: They have the ability to bounce back from the setbacks, that they invariably encounter along the way
Great leaders never give up on the change vision
Great leaders have the capacity to think beyond today and to imagine possibilities. They are driven by a vision of what can be achieved. Their passion, energy, and resolute focus create a movement that others seek to join. These leaders realize that culture change will not always make them popular, but they put a stake in the ground and lay claim to what they believe in. The courage of their convictions propels them forward on the journey. Like Mandela, the change becomes their driving force and they speak on behalf of the cause, not their ego, which adds to their credibility. Change leaders believe in making a difference in their business and this belief allows them to endure the knocks and setbacks along the way
CONCLUSION?? TURNING CHANGE INTO FUTURE SUCCESS
The Culture Disruptor contains the four key steps necessary for any business facing culture change, as the organization pursues a workplace that can deliver, grow, adapt, and continue to prosper.
Throughout this book, I have explained and illustrated how The Culture Disruptor can help individuals and organizations cut through the challenges of culture change in four relatively straightforward steps (see Figure on the next page):
The Culture Disruptor provides a proven way to transform culture, with lessons sourced from my thirty years’ experience—much of it as an insider, in charge of culture transformation in large organizations. Along with the supporting analysis in this book, it is designed to help you wherever you happen to be on your culture change journey. The Culture Disruptor can assist leaders continue to be successful, help those who are struggling with specific culture issues, or support more radical workplace change
On any culture change journey, always keep in mind what’s central to workplace culture. Contrary to popular opinion, culture is less about the explicit values and behaviors, and more about the mental maps, roles, and patterns. Dealing with these key elements of culture will give you the greatest leverage during any culture transformation.
In fast-changing marketplaces, bosses face the challenge of adjusting the culture to meet the shifting business landscape and increasing customer demands. This continual change can present exciting opportunities for those who have the know-how to transform workplace culture into a source of competitive advantage. Culture change can be extraordinarily rewarding, but it can also be challenging. Remember, the journey may require you to give up the ways that once made your organization successful
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