How Leaders Reshape Culture . . . It’s Not What You Think

Dilbert culture change

One of the foundation “principles” of academics and consultants who research and advise on Corporate Culture is that senior leadership plays a very large role in shaping and changing corporate culture, mostly through articulating new “values” and then the leaders role modelling them.  And most culture change or “reshaping” programmes start at the top of the organisation, usually with the senior team defining a new set of values as a result of a culture survey that showed gaps between the current and the “desired” culture. The desired culture being determined by employees taking the survey. After all, if employee engagement is the key to improved performance, then we need to close the gaps between the current and desired culture. Neat, tidy, logical.

The problem is, it rarely works.  Most culture change efforts based on new values shared through a cascade of top-down meetings and culture change workshops rarely creates lasting culture change. In fact, most culture change programmes fail. The “sheep get dipped”, then before long everyone is back to their old ways of working and behaving.

So what’s really going on with culture and culture change?

Most top-down, leader-led, new values roll-out culture change programmes fail for three very important reasons:

  1. The culture change initiatives were not tied directly to the new business strategy.
  2. There is no single, overarching, homogeneous corporate culture but a collection of subcultures.
  3. The workplace processes and policies haven’t been changed.

However, there have been some spectacular examples of culture change over the past few decades. The turnaround of Continental Airlines,  the rise of Yum! Brands, the restart and continuous safe power production of Three Mile Island Nuclear Plant, the turnaround at Ford Motor Company, to name a few.  And in every case, some key elements, missing in most culture change failures, were at the center of the change process.

Three Key Ingredients in Sustainable Culture Change:

  1. Tie Culture to Strategy: One of the most important elements of successful cultureStrategy - Structure - Culture change is making certain the new culture is tied directly to the business strategy. In most cases it is a new strategy, caused by changing economic or market conditions, that drives the need for a new culture. What are the key strategic initiatives? What behaviours (= culture) will be required to best deliver these initiatives?  You should be asking these questions in every department, function and every corner of the company.
  2. Find and Recruit the Informal Leaders: Most subculturescompanies are a collection of sub-cultures, each with their own “ways of thinking and doing things” and at the head of each subculture is an informal leader, usually a respected peer. Numerous studies have shown that these informal leaders are more trusted by employees than “management”. These are the real change agents in successful culture change. The dramatic shift in culture at the Ford Halewood plant was led not by management or consultants, but by Supervisors and Union representatives. Employees respected and listened to them and the old, strife torn Ford plant was transformed into a modern, high quality Jaguar assembly facility.
  3. Behaviour Change Takes External Reinforcement: Just like the dieter who gives up after a few weeks, culture change is really about behaviour change at the individual level. What is required is external reinforcement, usually in the form of reshaping the environment (in the case of the dieter it’s the contents of the frig). For successful culture change, business processes and policies have to be altered to support the new behaviours required.  Everyone knows that work processes mold behaviours at work, so we must change the work processes (meetings, reviews, performance management systems, workplace layouts, etc.) in such a way as to drive and reinforce new behaviours.

At Ford, Alan Mulally significantly changed how meetings were run and how the senior executives were compensated.  At Continental Airlines, Gordon Bethune symbolically burned the Rule Book so Check-In agents could use their best judgement to service customers. He also instituted all employee bonuses monthly for on-time arrival. As a result, behaviour changed and so did the culture.

If you are thinking about culture change, then make certain you have all the required ingredients in place before you start.

Written and Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
This entry was posted in consulting, corporate culture, John R Childress, leadership, Organization Behavior and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s