Stop Blaming Your Culture

Stop Blaming Your Culture

Strategy + Business

Published: January 18, 2011

Stop Blaming Your Culture

Start using it instead — to reinforce and build the new behaviors that will give you the high-performance company you want.

by Jon Katzenbach and Ashley Harshak

Excerpts:

.... understand the value of an organization’s culture. This can be defined as the set of deeply embedded, self-reinforcing behaviors, beliefs, and mind-sets that determine “how we do things around here.” People within an organizational culture share a tacit understanding of the way the world works, their place in it, the informal and formal dimensions of their workplace, and the value of their actions. Though it seems intangible, the culture has a substantial influence on everyday actions and on performance.

Organizational cultures don’t change very quickly. Therefore, if you are seeking change in your company or institution, you are most likely to succeed using your existing culture to help you change the behaviors that matter most. Bit by bit, as these new behaviors prove their value through business results, the culture you have can evolve into the culture you need.

When a new leader’s strategy puts the culture of a company at risk, the culture will trump the strategy, almost every time. There are good reasons for this. Every company’s identity — the body of capabilities and practices that distinguish it and make it effective — is grounded in the way people think and behave. Deeply embedded cultural influences tend to persist; they change far more slowly than marketplace factors, and cause significant morale problems when not addressed effectively. When your strategy and culture clash visibly, more likely than not, the culture is trying to tell you something about your own leadership philosophy.

But many leaders overlook this message. They blame the company’s culture for the resistance they encounter. ... it is rarely successful; few major corporate transformations, especially those involving a wholesale change in the culture, achieve their intended performance goals.

... when overlooked, the hidden power of a company’s culture can thwart any leader’s strategic aspirations. No matter how many top-down directives you issue, they will rarely be executed, at least not with the emotional commitment and consistency needed to make them successful.

But when you fight your culture head-on or ignore it altogether during a change initiative, you lose the chance of reviving some of the attitudes and behaviors that once made your company powerful — and might do so again. Several studies (including one conducted by Booz & Company and the Bertelsmann Foundation in 2004) suggest a correlation between financial results and a strong, inspiring organizational culture. The correlation is hardly surprising; after all, cultures influence and energize the behaviors that matter most

Don’t blame your culture; use it purposefully. View it as an asset: a source of energy, pride, and motivation. Learn to work with it and within it. Discern the elements of the culture that are congruent with your strategy. Figure out which of the old constructive behaviors embedded in your culture can be applied to accelerate the changes that you want. Find ways to counterbalance and diminish other elements of the culture that hinder you. In this way, you can initiate, accelerate, and sustain truly beneficial change — with far less effort, time, and expense, and with better results, than many executives expect.

Why don’t corporate leaders naturally respond to culture in this productive way? Because of several myths:

• “Our culture is the root of all our problems.”

• “We don’t really know how to change our culture, so let’s escape it.”

• “Leave culture to the people professionals.”

• “Culture is the job of the top leaders.”

By contrast, working with and within a culture is sensible, practical, and effective. Thus, it is inherently energizing. When leaders learn to operate this way, their employees tend to become more productive and their own efforts become more rewarding.

The first thing to change is the view that, as a leader, you can fix your culture by working on it directly. Rarely is that the case. Just as you typically can’t argue someone out of a deeply held belief, you can’t force people to change the way they think and feel about their work. Instead, you need to focus on specific behaviors that solve real problems and deliver real results. This, in turn, enables people to experience the results of thinking differently. Experience becomes a better teacher than logical argument.

As Schein puts it, “Always think first of the culture as your source of strength.” Tapping into the emotionally gripping aspects of your existing culture can accelerate performance. ...The ability to diagnose the beneficial attributes of a culture, and then use them to motivate strategically important behavior, is one of the key factors that differentiate peak-performing organizations from the also-rans in their field.

Within an overarching corporate culture, there are generally several subcultures, each with its own unique elements. Schein writes that these can include an operational culture, spurred by line managers eager to get the most out of their people; a senior executive culture, grounded in financial insight and training; and an engineering culture, in which attention is focused on the technology.

To understand your culture, you need to pay close attention to its quiet, sometimes hidden, manifestations, such as the side conversations in the hallways, the informal consultations behind closed doors, and the incisive guidance that people get when they ask one another for advice. It is also evident in the formal lines of the organization chart and the ways in which directives are worded. Cultures can be diagnosed best by the work behaviors they promote. Do people collaborate easily? Do they make decisions individually or in groups? Are they open with their information? Do they reflect on successes and failures and learn from them?

As you move from diagnosing to improving behaviors, focus first on the few critical changes that matter most and support getting the work done, thereby accelerating the results you want. Make use of both formal and informal mechanisms.

The notion that behavior change leads to attitude change can be traced back to the 1950s, to psychologist Leon Festinger and his theory of cognitive dissonance. Festinger argued that when people are induced to act in new ways, even if those new behaviors feel unfamiliar or wrong at first, their need for consistency will gradually affect the way they think and feel. They will seek out reasons to justify their new actions — both rationally and emotionally.

Behavior change affects attitudes most powerfully when it is supported by empirical evidence and real-life observation of better results. Direct experience trumps the old beliefs of an established culture. If that experience is reinforced by a group of people, then it is far easier to change a culture than most people believe. But you must focus on changing the behavior rather than engaging with the culture directly.

In emphasizing behavior, you are looking for those few actions, conducted again and again, that will lead to better values (and thus to better results). Make clear the distinctions among the values you want to develop, the one-time actions you are changing, and the recurring behaviors you hope to instill.

Thus, if you are seeking more accountability, identify the types of ongoing behavior that embody that value. You might have to be specific.

Repeated behaviors have cultural impact because they are contagious. People unconsciously imitate what they see others do. This is particularly true among respected colleagues; mutual respect is a powerful source of influence. Even small changes in behavior, if they are picked up by more than one individual, can ripple through an organization as others see their value and begin to act accordingly.

In moving people to change behaviors, you will need to rely on both rational arguments and emotional appeal. On the rational side, you need to make a case for change: Here’s why this particular behavior is needed. Help people recognize, for example, how the new behaviors will support the firm’s business strategy, will improve customer retention rates, or will be received by Wall Street analysts.

But emotional factors will undoubtedly matter even more. Compassion, fairness, and environmental responsibility are very convincing motivators. So are relief from anxiety and the opportunity to work more congenially with other people. Many employees will likely be concerned about how the changes will affect their peers, their own ability to take pride in their work, their work–life balance, and their family’s and community’s reactions, as well as the firm’s reputation. These issues must be addressed at a gut level, to ensure that acceptance of the change will be genuine, enthusiastic, and widespread.

Pragmatic Practices

Numerous principles for changing culture through behavior have become evident through ongoing practice.

• Start pragmatically. Don’t try to change everything at once. Focus on a few critical behaviors that resonate with your current culture, but that will raise your organization’s performance. Explicitly identify the target group — the employees whose behavior needs to change — and bring the necessary changes to life by demonstrating them.

• Reinforce the new behaviors through formal and informal means. Provide formal metrics, incentives, and process guidance that lead people to practice these new behaviors again and again, until they experience their value. For example, set up appraisals, salary reviews, and training to reinforce and reward the new behaviors you seek. At the same time, develop informal connections that foster the responsiveness and emotional commitment needed to deal with the unexpected. When there’s a challenging situation, like Shell’s reliability issue, cultivate support networks of people who can assess it and put in place actions not prescribed by process and procedure.

• Seek out role models for the new behavior. Start with the most effective practitioners, the people who distinguish themselves by the way they act. We often call these individuals pride builders because their example helps instill pride about the behavior change. They can also help you find ways to get others to adopt the same behavior. This work is sometimes known as looking for positive deviance.

• Enlist your current “cultural carriers.” These are the people who are well positioned to transmit behaviors to others, and who can be developed to spread the positive elements of the existing culture. In the early 2000s, Reliant Energy recognized the value of cultural carriers during an operational performance improvement program. After defining a small set of behaviors for collaborative work across functional silos, Reliant identified the people who had to act differently in order for the new behavior to take hold. Then, through a combination of training, incentives, and peer-to-peer reinforcement, Reliant induced these individuals to change first. This effort enabled the company to capture $600 million of value during the first nine months.

Any leader can do something similar, but take care that the effort is simple, clearly focused, collectively reinforcing, and not threatening to those who aren’t included. Suppose that you’re the head of strategy, frustrated at the way such new directives are executed. Have the top leadership identify 10 people who are linchpins of strategy execution — whose participation is critical to any serious strategic effort. Bring them together to talk about the barriers they face when trying to execute new ideas, and the ways that they might overcome those boundaries. Look for places where resources can be organized differently, and develop an agenda accordingly.

• Use the culture you already have. Take pains to stay within the most essential tenets of the existing culture. Make sure you understand clearly the reasons that current practices exist before you try to change them. In the wake of the Deepwater Horizon oil spill of 2010, many oil companies are being forced to change their safety and environmental practices. It can be surprisingly difficult to do so, because the existing performance contracts include strict requirements about timing and deadlines. The only way around this is to explicitly rethink those restrictions, taking on the difficult challenge of designing new behaviors that can improve safety while maintaining an acceptable pace. What is required here is an integration of process discipline and individual initiative and the courage to step up when the unexpected occurs

• Model what matters most. Be a visible and consistent role model of the behavior change you want to see in others.

• Clarify the specific implications of the new behavior. The new CEO of a large financial-services institution announced one of his highest priorities: a new approach to managing the trade-offs on uncertain deals, which he called taking measured risks. Although he talked about it constantly, and employees understood its importance, many people still needed more guidance. “I work in legal,” someone might say, “and I’m not sure what this means to me. Am I supposed to be taking more risks, or am I supposed to help others by pulling on the reins when they go too far?” The answer might well have been “a bit of both,” but it needed to be spelled out.

Similarly, in the midst of any cost reduction exercise, people need guidance about new behaviors. How will they monitor expenses from now on? How should they call attention to wasteful activities that they do not control? If a utility shifts from being a government-owned enterprise to a privately held company, the culture may need to become more focused on customer service. What kinds of things could people do differently? What kinds of regular reminders can be put in place to reinforce key behaviors? Which aspects of subscriber outreach matter most?

Author Profiles:

Jon Katzenbach is a senior partner with Booz & Company. Based in New York, he leads the Katzenbach Center, which focuses on innovative ideas in leadership, organization, culture, and human capital. He is the author or coauthor of nine books, including Leading Outside the Lines: How to Mobilize the (In)Formal Organization, Energize Your Team, and Get Better Results (with Zia Khan; Jossey-Bass, 2010).

Ashley Harshak is a London-based partner with Booz & Company. He is part of the firm’s organization, change, and leadership practice, with a focus on the public sector and financial services.

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http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.