Would you schedule yourself for an operation that only had a 20% chance of success?
Remember the kids’ game Operation? Picking out the organs and bones with enough skill not to touch the sides of the game board with the electric buzzer? Most of us failed miserably.
And so do most culture change attempts!
In 2008 a McKinsey & Co. global survey of 3,199 executives found that only about 1/3 of transformational (culture change) efforts succeeds. In an article titled Success Rates for Different Types of Organizational Change, researcher Martin E. Smith found the success rate for culture change to be around 20% as compared to a 40% success rate for technology change. In the words of one CEO, “culture change is damn hard and not for the squeamish!”
Maybe a better approach is not to attempt a culture change at all! As I review my business experience over the past 35 years I am convinced that most culture change consultants don’t really know what they are doing, especially when we realize that culture is not just a single element, but connected to all the various elements of the organization, from the balance sheet to the cleanliness of the bathrooms in the manufacturing plant. It takes real insight into business, people and operations to make substantial change.
The Culture Change that Wasn’t a Culture Change
It’s my view that operational turnaround experts are better at successful culture change than most culture change consultants. Here’s a good example:
The General Motors Fremont, California plant opened in 1962 it closed its doors in 1982 after twenty years of strife, strikes, worker-management animosity, poor quality (the worst plant in GM global), and year after year of losses. Workers hated their jobs and hated management so much it was not uncommon to put half a tuna sandwich inside a door panel that was then welded shut. Employees hated their jobs, management hated being posted there (a career ‘dead-end’ assignment), and customers hated the cars.
Then in 1985 came the headline article in Car and Driver magazine: “When Hell Freezes Over” (the title alluding to a miracle), about the change in culture at the plant. The Fremont plant had reopened in 1984 and one year later had the highest quality of any GM automotive plant, absenteeism had fallen from above 20% to less than 2%, not one strike, with the same employees! Fremont was producing great cars by great people.
The ‘miracle’ was attributed to the joint venture between GM and Toyota. The plant was renamed NUMMI (New Union Motor Manufacturing, Inc.) and implemented the world-famous Toyota Production System, which features extensive training, a high level of respect for people, and among other things, the ability to stop the line at any time so that poor quality could be fixed on the spot (a process known as andon). For the next 25 years, the NUMMI plant was a showcase of modern management and an example of a high-performance culture.
But the change miracle of 1984 was more than just the introduction of the Toyota Production System. It was a total culture change that wasn’t designed as a culture change. In fact, according to Toyota manager John Shook in an MIT Sloan Management Review article, culture change was not the goal, but the natural by-product of how people were treated and a new set of work processes.
Improving the Odds of Successful Culture Change
You can’t be effective trying to change culture, or values, or the way people think and believe (like so many culture change approaches based on values and attitudes). But you can change culture, and dramatically as in the case of NUMMI, by changing what people do, the work processes that drive behavior and the management processes that relate to how people are treated.
It’s easier to act your way to a new way of thinking, than to think your way to a new way of acting.
So, my advice. If you want to change culture, talk to business turnaround and operations people, not culture change consultants. When you are in a deep hole, behavior training and culture workshops don’t really help. Get some operational people together and put in place some new work processes that work!
(adapted from LEVERAGE: The CEO’s Guide to Corporate Culture, available in paperback from Amazon)
Tight Lines . . .
John R Childress