The Bottom Line on Culture Change
Changing organizational culture is a marathon, not a sprint or an event. It is the most challenging task an executive team can commit to. It’s not like implementing a new strategy or a new organization structure. Culture change is about asking people to change their ingrained habits. We human beings are not wired to embrace change. Most of us are completely content with the status quo, even if it is not altogether wonderful. When trying to implement organizational changes where the human factor is the major variable, it ain’t easy. It requires a group of executives to call upon all their best interpersonal (or soft…hate that word!) skills. This alone can be, pardon the pun, counter-cultural.
These were my opening remarks recently at the University of Missouri’s Bloch School of Management. To prepare my remarks about creating an intentional culture I was forced to summarize what I know works and what doesn’t work. If your organization is embarking on a culture transformation, here’s my bottom line based on more examples than I care to remember.
I’ll start with what DOES work.
- The CEO and Executive Team are the owners and drivers of culture change. This is not a Human Resources initiative or something to outsource to consultants. The executives must model the desired behaviors with consistency over an extended period of time. If the staff observes the leaders doing one thing but asking them to do another there will never be any changes. Without setting the example at the top no one will budge.
- An effective Performance Management system is the main vehicle for implementing the changes. To be clear, a PM process is NOT the culture change. It simply monitors and reinforces the desired behaviors. In other words, this is still not an HR activity. From the leadership team on down, there needs to be a robust goal setting process that defines both business results and behavioral expectations. All managers must engage in on-going dialogues with staff to reward good outcomes or redirect efforts for improvements. Positive behavior change must be acknowledged in private supervision as well as publicly. The leaders need to telegraph, “This is what it looks like”.
- Persistently bad players must be removed. Just as the right behavior needs to be called out so, too, must the wrong stuff. If people who achieve great business results through poor behavior are allowed to stay the message is, “It doesn’t really matter how you behave. Just show us the money.” In essence you have created a total farce.
- Patience, persistence and time are required. Behavior changes in small steps over a period of time. Leaders must maintain the new habits and not move on to the next shiny object. It takes 18 months to 2-3 years for an organization’s culture to exhibit a culture change. I think of it like dieting: it took a long time to gain the weight, it’s going to take a long time to lose it too. There are no quick fixes.
- A culture of top performers is often a secondary gain. Even if there are values of high performance or excellent customer service in the stated culture goals, it is really the first four bullets above that will create this new environment. Once staff experience that, on a routine basis, great behavior is rewarded and misbehavior carries negative consequences, you will begin to see new pride and ambition. If your current top performers observe that even though they work harder and smarter than their peers but they both get the same salaries and titles and opportunities, you will either lose your best people or they will slide towards mediocrity. It has to be obvious to all that good things happen when you do the right thing and that bad things happen when you don’t. This will have a huge impact on changing the culture…as well as improving business results.
Here’s the flip side. When these things occur there will be no lasting change and you might as well not start down this path.
- Over complicated and overly ambitious plans. When the plan is too packed, lists too many value driven behaviors or is over-engineered, people will have a hard time getting on board. Speaking as a (now reformed!) consultant, don’t waste time and money designing something that gets too far away from the only question on peoples’ minds: What about me? What are you asking me to do now? If you can’t answer that in one brief paragraph you will be dead on arrival.
- Initiatives that sound, feel and look unapproachable or obvious. Related to the first point above, organizations that use negative language (“don’t do this”) or emphasize negative consequences will turn people off. There is also the frequent phenomenon of an executive team tucking themselves away for several months (again, usually with a consultant!) crafting high ideal values that align with business objectives. These are well intentioned activities but they are disconnected with the human reality on the ground. “Act as if you own the business” is a favorite but if the leadership doesn’t really allow for decision making at all levels of the organization then it will be met with skepticism or derision. “Treat everyone with respect” is generally the norm in most places, so to call it out in the midst of a culture change is a big “duh” to the staff. Leaders need to assume that lots of good behavior is already in place so listing the obvious ones is dull and will be ignored. If you have people in the company who do not act respectfully they should already be gone. That is a leadership responsibility rather than the crux of a culture transformation.
- Selectively reinforcing only some of the values. This goes back to leadership consistency. If people are rewarded for “putting customers first” but ignored if they lack “transparency” or “collaboration” then the message is clear to the staff. Focus on the business and don’t worry about how you treat your peers.
- Executives who are not fully committed. If the staff observes any hint of back sliding from the leaders or dissension among their ranks or delegating the culture change to Human Resources you can forget about it. When staff sees this is another one of those initiatives where only they have to do the heavy lifting and senior leadership is somehow exempt, there will be no change. When activities slide into HR driven administrative tasks it turns into a bureaucratic check list. That is not culture change. Period.
As I have mentioned before on this site, culture change is not for the faint hearted. It is a great idea in theory but executing on the promise is very difficult. In my experience, if a CEO and executive team are committed and enthusiastic about shifting the culture then so much is possible. Without that, my advice is don’t bother.