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:
- The culture change initiatives were not tied directly to the new business strategy.
- There is no single, overarching, homogeneous corporate culture but a collection of subcultures.
- 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:
- Tie Culture to Strategy: One of the most important elements of successful 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.
- Find and Recruit the Informal Leaders: Most companies 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.
- 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
PS: John also writes thriller novels