At a meeting this week one of the topics that popped up was culture change. The meeting divided into two camps: one saying culture change was easy, the other saying it was difficult. A brief and good-humored debate happened.
The culture change is 'easy' group had the following argument:
If you change the leadership, and the leadership role models the behaviors it wants to see in the organisation, and you do something disruptive, like move the corporate headquarters. Then the culture will change. This group implied that culture change can happen quickly and fairly painlessly without loss of productivity and business continuity.
The culture change is 'hard' group argued that: Even if the leaders are willing, able and committed to change, (and agreed on what it would look like), then the middle managers will act as an impermeable barrier – stopping both the top down change, and any bottom up change which this group felt would occur as, in the organization in question, young people joined who expected a quite different psychological employment contract and career path from the longer serving (and older) members of the workforce. They suggested that it's a very slow and painful process to change the culture.
There are a number of difficulties with both arguments. The difficulties they share include:
1. Arguing from over simplified ideas of what culture is
2. Believing that there are specific levers to manipulate it e.g. leadership style
3. Implying that an organization has a monolithic culture so that what works to change it in one part of the organization will work in another
4. Ignoring elements of the infrastructure that bake culture in e.g. performance management systems, outdated policies, unexamined standard operating procedures, and compliance requirements
One organisation that seems to have good experience in changing the culture is Cisco. Take a look at John Chambers talking on teamwork and collaboration and you'll see that he talks about a process that had already been going on for six years (to the time he did the video in 2009), and involves multiple changes to systems, processes, structures, and behaviors. Chambers is frank in stating that he had to change a lot about his own modus operandi. He had to learn to let go and let other people get on with it.
Alan Mulally of Ford is another CEO changing the culture. But again it is not a totally easy or fast fix – Mulally has been in post nearly four years. A Wall Street Journal article in February this year points to some of the issues including labor concerns. And although he turns 65 in August this year "the typical retirement age for executives in Detroit. Ford has no formal retirement policy for its top people, but Chairman Bill Ford Jr., a scion of the founding family, has said in jest that he hopes Mr. Mulally will remain CEO for a couple more decades." presumably to carry on his culture change work.
What is relatively easy to do for the executive team is to make clear, explicit statements about what the cultural attributes should be and why they should be different from what they currently are. The 'why' they should be different must be rooted in a real (and communicable) shortfall in business performance or change in business strategy. Sony, an electronics manufacturer, losing competitiveness, decided to invest more in specific global brands (one of which was Playstation) than in less well known brands. This brand focus "forced the company to engage in culture change efforts that have had repercussions on the rest of the corporate strategy. As Sony CEO, Nobuyuki Idei, stated "We have to change from a manufacturing industry culture to a knowledge-based global culture. . . . a reinvention of the business model itself. (See: Schulz, M. and Hatch, M-J. (2003). The Cycles of Corporate Branding: the case of the Lego Company. California Management Review. Vol 46. No. 1. Fall)
Chapter 7 of my book Organisation Culture: Getting it Right presents and explains six conditions for culture change: To change a culture you need
1. Clear and well articulated reasons for changing the culture that are inextricably linked to the business strategy
2. Clear and well articulated principles for delivering the business strategy which are supported by values that are shared, and acted on by those working for the organisation – albeit in different ways in its different parts.
3. Alignment of such matters as language, policies, practices, processes and the physical environment with the principles for delivering the business strategy.
4. Overt leadership commitment through deeds as well as words to the desired/required 'way we do things here'.
5. A recognition of what degree of change is possible given the constraints of history, legacy, the business model, resources and so on.
6. Acceptance that planned culture change takes years rather than months, and that culture is in any case changing all the time irrespective of any plans to change it.
Neither quick nor easy but doable in the right conditions.
Naomi Stanford 