Sixfoot4 culture white paper

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1. WhitePaper#9 Howtounderstandandchangetheorganisational culture August2012 By:GarthHolloway ManagingDirector Sixfootfour Tel:+61(0)294510707 garthh@sixfoot4.com www.sixfoot4.com.auPage 1 of 13 2. Synopsis Changingacompanyscultureisnotsimple.Itmaymeanchangingthephysicalsetupoftheoffice, changingthepeople,orchangingthewaytheorganisationspeaks.Thiswhitepaperlooksatsomeof theissues,andoffersexamplesanddirection. Introduction Overthelast20yearsorso,myconsultinghasbroadlyfocusedonperformanceimprovementand businesstransformation.Havingsaidthat,itisalsoworthnotingthatfornearlyalltheclientsIhave workedwithandforalltheprojectsIhavecompleted,thevastmajorityhavebenefitedfroman improvementinperformancebutveryfewclientshavetrulytransformedthemselves. Inmyexperience,businesstransformationcannotbeachievedwithoutasubstantialchallengetothe prevailingculture.Thismaymeanchangingtheofficeenvironment,theywaypeopledressandtalk, andhowtheirsuccessismeasured. Thiswhitepaperhassomeclues,observations,casestudiesandtipsforthosewantingtochange theirorganisationsculture. Keyissues Myths(pastexploits),rituals(thingsdoneonaregularbasis)andceremonies(biggerritual activities)helptoproducecompanyculture UnderstandtheAsIsbeforeyoulookattheToBe Twodriversofculture:theinternalenvironmentandtheExternal:soundssimpleuntilyouexamine thetwoindetail Ifyoucantchangethepeople,youmayneedtochangethepeople Itcantakeyearstotransformthecompanyculture...givinguphalfwaymeansyouwillhaveanew culture,butyouwontknowwhatitis.Page 2 of 13 3. Myths,ritualsandceremonies Introduction OneofthebestbooksIhavereadonthetopicofcultureistheclassicbyBolmanandDeal ReframingtheOrganisation.Inthisbooktheydiscussthatcultureisaproductofthemyths,rituals andceremonieswithintheorganisation. Mythsincludestoriesofpastexploits. Ritualsarethethingsdoneonadailyorweeklybasisthatareuniquetothatorganisationor department. Ceremoniesarethebiggeractivities,performedonalessfrequentbasis.Abitlikemakingyour partnerteainthemorning(aritual)andgoingoutforacelebrationonyourweddinganniversary(a ceremony).Ritualsandceremonieshelpdefineyourmarriage. Thenthereareadditionalcontributingfactorssuchastheatre:thisisthephysicalstagesettingin whichbusinessiscarriedout.Theimpressionyougetwhenyouwalkintoabusinessreception,and furtherintotheworkingenvironmentisalwaysagoodindicatorofthecultureofthebusiness.Staff alsopickuponthesenonverbalcuesandbegintobehaveaccordingly. Amoretraditionaldefinitionofcultureis:thewaywedothingsaroundhere.Thisisavalid definition,buttoosimplistic.Mypreferenceistoseethissimplisticdefinitionthewaywedothings aroundhereastheproductofthemyths,ceremonies,rituals,etcofthecompany. Recognisingthecontributingfactorsforwhattheyareprovidesyouwiththeleversyouneedto influenceorchangetheculture. FromAsistoToBe Overthelast20yearsorso,myconsultinghasbroadlyfocusedonperformanceimprovementand businesstransformation.Havingsaidthat,itisalsoworthnotingthatfornearlyalltheclientsIhavePage 3 of 13 4. workedwithandforalltheprojectsIhavecompleted,thevastmajorityhavebenefitedfroman improvementinperformancebutveryfewclientshavetrulytransformedthemselves. Inmyexperience,businesstransformationcannotbeachievedwithoutasubstantialchallengetothe prevailingculture.Butaswithallimprovementprojects,tochangethestatusquorequiresthatyou understandwhatthestatusquois.Or,inconsultingspeak,understandtheAsIsandthendefine andmovetotheToBe. Understandingthecurrentcultureinanorganisationisreadilyachievedthroughtheadministration ofasurveyororganisationaldiagnostictool.Ihaveusedafewandfoundthatmostofthemusea foundationmodelagainstwhichthesurveyresultsaremodelled. Forexample,theRogerHarrisondiagnosticidentifiesfourorganisationtypes;Power,Role, AchievementandSupport.Thediagnosticthenindicateswhichtypetheorganisationismoreclosely matchedto. Thereisnothingwrongwiththisapproach.Havingafoundationmodelisgoodplacetostart,butitis importanttovalidatethatconceptuallythemodelrepresentsyourorganisation.Ifyoudisagreewith theideaofrestrictingyourorganisationtoHarrisonsfourtypes,thenhisdiagnosticisnotsuitable foryourcompany. Executivesknowthatthecultureisinsomewayareflectionofthem,anditispossiblethatthey couldrejectanyfoundationmodelthatdoesntbroadlyaligntotheirviewoftheorganisational culture,orwhatthecultureshouldbe.UsingtheHarrisonexample,aCEOmayprivatelysupporta Powerculture,butpublicallyespouseaSupportcultureandthereforewillnotusetheHarrison diagnosticasitmayexposehisprivateviews. Thereisnoeasywaytomitigatethisbesidesworkingwithexecutivestohelpthemacceptthatwhen itcomestotheAsIsthereisnorightorwronganswer.Allmoderndiagnosticsshouldbroadlygive youthesameanswer,andrecognitionandunderstandingissubstantiallymoreimportantthanhow theresultislabelled. Page 4 of 13 5. Equallyimportantisthelevelofdetailprovided.Whatyoudontwantisreallyfinedetailaseach personintheorganisationwillhavetheirowninterpretationofwhatthecultureisandwhatit meanstothem.Andanindividualsinterpretationofthecultureisheavilyinfluencedbytheirown personalcircumstancesandviewsonlife.Itiseasyforapersontopickoutthefewaspectsofthe culturethatsupportstheirbehaviourandignorethemultitudeofothercuesthatchallengeit. Giventhis,changingthecultureattheindividuallevelisaverylonggameandlikelytoyieldavery poorresult. Whatisimportantistofullyunderstandhowtheperceivedcurrentcultureisinfluencingthe behaviourofgroupsofpeople,sincedifferentgroupsmayhavedifferentinterpretationsofthe organisationalculture. Everyoneconsidersthemselvespartofthebusiness,butactsinaccordancewiththeirlocalculture. ItissimilartotherebeingdifferentdialectsofEnglishbetweentownsandvillages.Theyallidentify themselvesasEnglish,butatthedetaillevel,theyacknowledgeandcelebratethedifferences. TheInternalandExternalEnvironments Forme,thetwodriversofculturearethe: 1. Internalenvironment,and 2. Externalenvironment Whilethismayseemsimplistic,itdoesgetmorecomplexasyouexaminethetwoenvironments. Theinternalenvironmentistheproductof: 1. Leadership 2. Managementstyle 3. Rewards Theprevailingorganisationalcultureistheintersectionofthefourdrivers: Page 5 of 13 6. Theprimaryregionofinterestrepresentsthepointatwhichthepoliticsofthefourdriversaremost inharmonyandthisbecomestheprevailingcultureofthecompany. LeadershipandManagementstyleisoftenthesamethingattheCEOlevel.Assoonasyoumove downthehierarchytheyseparateandleadershipmaybecomelessofafactor,andmanagement stylecanstarttodominate. Themoreseniortherole,thegreatertheinfluenceanindividualsmanagementstylehasonthe cultureofthecompany.Itisnothardtoacceptthatasupervisormaycreateamicroculturewithin theirareaofcontrolandthatthiswouldnothavesignificantinfluenceonthecultureofthe organisation. Ontheotherendofthespectrum,themanagementstyleoftheseniorexecutiveofthecompany willhavesignificantinfluenceonthecompanyculture.Iftheirstyleistobecautiousandtoenforce detailedanalysisintothedecisionmakingprocess,thenthiswillcreateaverydifferentculturetothePage 6 of 13 7. companywheretheseniorexecutiveactivelyempowersandenableshismanagersandiswillingto makedecisionson60%ofthefacts. TheinfluenceofLeadershipontheorganisationalcultureisenormous.Myviewisthatjustbecause acompanyhasaleader(ManagingDirector,CEO,Owneretc),doesnotmeantheyhaveleadership. Forme,leadershipisthecapabilitytoengagetheheartsandmindsofpeopleandcausethemto emotionallyinvestandbelieveinavisionforthefuture. Leadershipcanthereforemanifestitselfatanylevelintheorganisation.Thehigherupthe organisation,themoreitwillinfluencetheculture. Itisthereforetrueyoucanhavegreatmanagerswhoarepoorleadersandviceversa.Dependingon whethertheCEOsstrengthisinleadershipormanagementwillsignificantlyinfluencethecultureof theorganisation. Rewards RewardsarethethirdarmoftheinternalenvironmentandIconsiderthemtobeasequally importantasthemanagementandleadershiparms. Thesalientpointisthatrewardsrefertothereceiptofthereward,notthegiving.Thismeansthat foranygivenindividual,rewardscanbeintrinsicandextrinsic. Intrinsicrewardistherewardthatapersonbestowsonthemselvesforthejobtheyaredoing. Usingstereotypesasanexample,acharityworkerismorelikelytoframetheworktheydoinaway thatallowsthemtoseethemselvesasgivingbacktosociety.Iftheywereinitforthemoneythenit isunlikelythattheywouldlast,ascharitiesneverhaveenoughmoneyandthemotivationiswrong. Rathertheyneedtheirinternalrewardsystemtoprovidetheselfvalueneededtocontinue. Bycomparison,ahardnosedbusinesspersonislesslikelytorelyontheirinternalrewardsystemfor recognition,choosingrathertomeasurethemselvesbytheexternalrewardstheyreceiveforthe worktheydo.Inthiscase,reward=recognitionandthemostobviousexamplesaresalary,car, officeandtitle. Page 7 of 13 8. ThereisamaximthatsaysTellmehowyouaremeasuredandIwillshowyouhowyoubehave. ForthepurposesofthispaperIwilltakepoeticlicenceandequatemeasurewithreward;Tellme howyouarerewardedandIwillshowyouhowyoubehave.Behaviourandcultureareinextricably linked. Thesimple,earlierdefinitioncompanyculturethewaywedothingsaroundherecanalsobe definedasthewaywebehaveasacompany.Iftherewardismoneyandmaterialisticgain,then theculturewillhaveanorientationofachievementandpower.Iftherewardisselffulfilmentand nonmaterialisticgain,thentheculturewillorientatetowardshumanisticandselfsacrifice. Theexternalenvironment Theexternalenvironmentisnormallybeyondthecontrolofthecompanyanditsstaff.Therearea fewcasessuchasJackWelsh,BillGates,SteveJobsetc,wherethepersonhasinfluencedthe externalenvironment. Theinfluenceoftheexternalenvironmentisaproductofthemixofglobalandlocallegislation, speedoftransactions,sizeoftransactions,averageageofdecisionmakers,nationalidentityandthe socialimpactofgettingitwrong. Toexplainspeedandsizeoftransactions,consideracurrencytrader.Theycanplacetradesin billionsofdollarsandareinandoutofthemarketin20minutes.Dealingwiththosesortsofsums hastodistortthewaythetraderseestheworld.Alossof$10millionisquicklyshruggedoffitwas only$10millionafterall.Tosurviveandflourishinthisenvironmentrequiresaveryspecifictypeof personality.Myexperienceisthattheyworkinaculturethatencouragesstafftoplayandwork hard.Longhoursinthepubarenotunusual,andtofitintotheteamapersonwouldneedto embracethisaspectofthecorporateculture. Thenationalculturewillhaveastrongeffectontheorganisationalculture.Touseafewstereotypes; Westerncultureisfoundedonfreedoms,equalityandrightsparticularlyattheindividuallevel.The nationalcultureisgenerallyoneofsuccess,andbusinessesarebuiltinthesamemould.Theoutlook tendstobefinanciallydrivenandtheshorttomediumtermisemphasised. Page 8 of 13 9. Easterncultureappearsverydifferenttome.Thereisanequaldeterminationtobesuccessful,but withamuchstrongerfocusonthecommunityandwithdeeprespectforhistory.Profitisimportant butoverthemediumtolongterm.Theexpectationsofsocietyofitscitizenswillhaveasubstantial influenceonhowpeoplethinkandbehaveatworkand,byextension,astronginfluenceonthe organisationalcultureofthebusinesseswithinthatsociety. Thequestionnowariseshowdoyousetorchangetheculture. Howtosetorchangeculture Changingtheorganisationalcultureisexceptionallydifficultasitrequireschangingbehaviour. LetssaytheAsIssurveyhasdefinedthecurrentculture.Thenextstepistodefinethedesired culture.Howdoestheleaderwishthecompanytobehave?Closingthegapbecomesthechallenge. Usingthesimpledefinitionofculturethewaywedothingsaroundheredefiningthedesired cultureobviouslybecomesthewaywewanttodothingsaroundhere.Thiscanhavemany elements: Timepointoffocus:pastorpresent,shortormidtermCommunicationFormalorinformal,HighorLowcontextSpacePrivateorsharedIndividualismRecognitionofindividualsorteamsCompetitivenessHighorlowStructureFlexibleororderedEnvironmentHighorlowcontrolPowerequalityorhierarchyorientated Thislistisforexampleonly.Eachcompanyshouldcomeupwiththeirownlistofdriversfortheir desiredculture.Agoodplacetostartistheresultofhowtheymeasurethecurrentculture. Determinewhataspectsoftheexistingorganisationaltheatre,ritualsandceremoniesare reinforcingthecurrentcultureandthenconsiderhowtheycouldbechallengedandreinterpreted. Page 9 of 13 10. Itishoweverrelevanttoask:shouldthecompanychangetheculture? Incertainorganisationsthecultureiswidelyknownandacceptedforexampleinthemilitary,and themines. Boththeseworkingenvironmentshaveaverystrictcultureofdowhatyouaretold,asthisculture isvitaltothesafetyoftheemployee.ForexampleIoncewitnessedasmallundergroundrockfall. Therockslandedonaminersanklesbreakingthebones.Thepoormanwasinalotofpainandwas takenawayformedicalassistance.Concurrentlyachargesheetwaswrittenupagainsthimashe shouldhavemadetheworkingenvironmentsafebeforeentering.Thisworkpracticewasnot negotiableandhistardinessinthismatterresultedinhimhavingbrokenbonesandadatewiththe inhousejudiciaryoncehewasoutofhospital.Iaskedifthebrokenboneswereenoughpunishment andwastoldabsolutelynot.Thereisnoroomtoquestioninstructionsgivenunderground. GoogleandFacebookarecompaniesthatappeartobeontheotherendofthespectrum.Ineach, therulesofthetraditionalworkingculturehavebeensignificantlychallenged.Fromatheatrepoint ofview,staffcandresslargelyastheyplease,workstations/workareasarelessproletariatintheir natureandlayout.Creativityisstronglyencouraged.Ascompanieswhosesuccessreliesonleading themarket,theycannotaffordtohaveaculturethatinhibitscreativity. Whatnext? Oncethenewcultureisdefined;allthatyoureallyhaveisadocumentdescribinganorganisation thatissimilarbutdifferenttoyourcurrentone.Toimplementthisnewcultureandtakeittoapoint wheretheemployeesuseittodrivetheirbehaviourtakessubstantialeffortandfrequentlysome veryphysicalchanges. Theeasiestthingtophysicallychangeistheorganisationchart.Thismaybeassimpleastitle changesoradramaticaschangestoreportinglines.Eachchangesendsadifferentmessagetothe staff. Page 10 of 13 11. Anotherchangesthatareequallydramaticbutslightlymoreeffortischangingthephysical workingenvironment. Oneofmyclientsrecentlychangedfromatraditionalworkstationenvironmenttoanactivitybased workingenvironmentwherenoonehasasetdesk,ortelephone.Therearenodesktopcomputers anddesksaretidiedeverynight.Eachpersonhasalockerfortheirpapers.Themovewasexpensive butthemessagewasblunt.Wearegoingtodothingsdifferentlyfromnowon. Theinitialchangeherewasadramaticchangetothetheatre.Asaresult,staffwereforcedtochange theirbehaviours,andnewceremoniesandritualswereintroduced.Legacybehaviourfromthe previousworkenvironmentwasseentobeobstructive.Whilemyclientdidnotnecessarilysetout tochangetheculture,theydidachieveapositivechangethroughadramaticchangetotheirtheatre. Changethepeople Theproblemisthatnomatterhowmuchyouchangethetheatreinwhichtheplayisdelivered,if youkeepusingthesameactors,youmaysoonbegettingthesameperformancequalityasbefore. Acomplexchangeischangingtheactualstaffmembers.Isubscribetothemaximthatsaysifyou cantchangethepeople;changethepeople.Movingakeypersonsidewaysoroutofthe organisationisaclearmessageoftheintenttoestablishanewwayofdoingthings.Italsoensures thatthecompanydoesnotslidebacktotheoldwayofdoingthings. WhileIagreethatthecompanywillalwayshaveanoverarchingculture,itisalsoexpectedthatonce thecompanyhasmigratedtothenewculture,eachdepartmentwillhaveitsowninterpretationof thenewculture,basedonthefunctionofthedepartmentandthepersonalityofthedepartmental manager. Consider:thenewcompanycultureistodelightthecustomerandseniormanagersnowdressin corporatecasualandhaveincreasedexpenseaccountsforcustomerlunches;thisdoesnotmean thatthatthecreditofficeshouldbeanylessaggressiveinidentifyingpotentialbaddebts. Customerdelightcanneverbetheircultureormantra. Page 11 of 13 12. Thesameappliestoaninhousequalityassurancelaboratory.Forthemitreallydoesntmatterwhat thecultureis.Theymusttesttospecificationandfailproductsthatdonotmeetit.Itcanbeargued thatthisisensuringcustomerdelight,evenifitmeansupsettingthecustomer. Companylanguage Oneofthemostdifficultaspectsofchangingtheorganisationalcultureischangingthelexiconofthe company. Overtime,thecompanybuildsupaninternalvocabulary.Thewordspeopleuseprovidedirect insightintohowtheythink.Itisverydifficulttoconvinceanyonethatthewordsyouusedonot reflectthewayyouthink.Oncecanbeajoke.Repeateduseofwordsjustbecomesthewayyou think.Racialstatementsareaneasyexample.Saidonce,itcanbeapoortastejoke.Multipletimes andyouarearacist,evenifyoudontadmitittoyourself. LesseasyexamplesaretheuseofwordssuchasCustomerversusClient,Lockedincontracts versusTermedagreements.Thesewordscanmeanthesamethingbutusingtherightwordsand, importantly,nolongeracceptingwordsthatdonotreflectthenewculture,isasignificantstep forwardtoembeddingthenewculture. Companiesshouldwanttosigntheircustomersuptoatermcontractthisprovidescertaintyof cashflow.Theyshouldntwanttolocktheirclientsin.Itimpliesmaliceofforethoughtand behaviour.Theydontwantstaffthinkingofwaystolockclientsin;theywantstaffthinkingof productsthatcanbesoldontermagreements.Theprinciplesarethesame,butthemental frameworkisdifferent.Oftenthepublicfaceofthecompanywilluselanguagesuchtermcontracts butprivatelytheymaydiscusshowtheycanlaunchproductsthatwilllocktheircustomersin.To changetheculturethisprivatevocabularymustbestampedout. Tosummarise:tochangethewaypeoplethink,getthemtochangethewaytheyspeak.Oncethey thinkdifferently,thentheywillbehavedifferentlyandthenewculturewillembeditself. Itisquitelikelythatthestaffwillneedsomeassurancesthatthenewbehaviourisacceptable.On thismatterthereisnobettersubstituteforembeddingthenewculturethanforthestafftoseethe Page 12 of 13 13. seniorexecutiveswalkingthefloorsinamannerthatexemplifiesthenewculture.Staffwillseeits acceptableandthenewculturewillstarttotakehold. Iwillclosewiththenotethatculturalchangeisnotforthefainthearted.Itcantakeyearsto completeandifacompanydoesnothavethestomachfordrivingchangeoveralongperiod,thenit isprobablybetternottostart.Givinguphalfwaymeansyouwillhaveanewculture,butyouwont knowwhatitis. Iwelcomeyourcommentsontheabove.Ifyoudisagreewithmeletshavethedebateasitdrives thelearningprocessforbothofus. Writtenby: GarthHolloway garthh@sixfoot4.com.au +61294510707 Page 13 of 13

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