Changing Culture Is Not as Hard as You Think
“Culture eats strategy for breakfast…”
Anyone in business knows who said that; and it is true: if your culture is not aligned with your strategy, your strategy will fail.
But it does not mean that culture is somehow “bigger” than strategy, or impossible to move.
You can change your organization’s culture. Effective executives do it all the time.
We are not saying that you should change your entire culture wholesale; but for any truly transformational change, it is necessary to adjust those elements of your organization’s culture that might block your strategy.
Every startup amalgamates and thereby changes the culture of the individual early members. Consider SpaceX, founded by Elon Musk. He had to hire people from aerospace companies that are notorious for doing things in a slow, conservative, and expensive way. According to Eric Berger in his book Liftoff,
“These big contractors largely subsisted off of government business, with a certain way of doing things to maximize profits while also satisfying the customer’s needs. This often involved stretching out contracts, since Uncle Sam was paying for their time. During one early meeting at El Segundo, some former Boeing and Lockheed workers began bantering back and forth about their old companies, and the merits of how things had been done. Musk raised his voice to end the discussion. ‘You work at SpaceX now,’ he sternly reminded them. ‘You bring that up one more time, and we’re going to have serious problems.’”
(Ref: Berger, Eric. Liftoff (p. 22). William Morrow. Kindle Edition.)
Changing culture is not something that is achieved by posting signs and making people watch HR training videos. Culture is changed by a combination of evangelism by senior leaders, action that demonstrates that they have embraced the new norms, and adjusting structures and incentives that are perpetuating the old culture. And these things need to be sustained over time.
Recently someone told me that his new business unit president had sent a memo saying that she wanted to have an open culture in which people freely and honestly discussed their ideas. I told him that that was a fine behavioral goal, but that it would not happen unless the culture is changed from one that is passive and defensive to one that is more constructive. That is, the current climate of that organization is one in which people are accustomed to “towing the line,” because in the past that is what has been rewarded. To change to a culture in which people actually speak their mind, leaders need to demonstrate that that is welcome and safe. Reassurances will not suffice: it has to be demonstrated.
But how do you do that? For one thing, you have to go where the discussions are. Normally if a senior executive joins a discussion among individual contributors, the contributors will all fall mostly silent and wait for the executive to say something. What the executive can do is ask people what they think, and display earnest interest. Someone will likely have the courage to speak up. That is a golden moment: regardless of whether the executive agrees with what was said, they can show that they value the person’s courage to say what they think. The executive can show continued interest, ask more questions, and express thanks for the insights.
Being ubiquitous also helps. Getting out of the executive suite and talking to people who do the work is really crucial. It shows that you care about their world. It makes you accessible, and humanizes you. It makes people feel empowered: the executive is someone who cares, and who would listen to ideas. And this also applies to online concourses as well—the Slack and Microsoft Teams channels in which discussions are occurring.
Instead of reading status reports, which generally have the root causes and actual realities filtered out or dumbed down, find out for yourself what is happening. That alone will start to change the culture in very positive ways.
There are many other ways to change culture too. Some are listed in the table.
2. Individual coaching (Behavioral Change)
3. Explicitly define new key behaviors to evangelize
4. Demonstrate the new behaviors through action - “walk the talk”
5. “Leadership making” (“LMX Theory”)
6. Create structures that incentivize the desired culture and behaviors
7. Create leadership “detectors”—practices that reveal those who naturally have the desired leadership traits
8. Mentor those who show promise
9. Affinity and Support groups
Some ways to change culture
Organizations often have processes and structures that embed dysfunction. Fixing these is crucial (number 6 in the table). A common form of these are systems that pit people against each other in a zero-sum manner. For example, a bonus system that rewards the “best” performer, or a “stack ranking” system that requires managers to rate their staff from best to worst.
Satya Nadella, Microsoft’s CEO, made culture change his number one priority, and one thing he did was eliminate stack ranking. According to an article in Fintecology,
“Before Nadella took over, Microsoft was characterized by competition between teams and between individual employees…[Now] Microsoft evaluates employees’ performance based partly on how much they helped their colleagues succeed.”
Another example of embedded dysfunction is when different departments compete for budget. According to an article in ndtv.com,
“Microsoft had become a company where teams had to compete for resources, and ideas that were perhaps in the best interests of the company as a whole often lost out because it didn't suit the interests of specific executive or teams.”
To institute cultural change, people need to learn new models of behavior. It is one thing to say that one needs leaders who are open and inquisitive, but it is quite another to actually recognize those who are (for real), or to practice that behavior oneself. That is why these changes are a learning journey. A combination of training and coaching to learn and internalize new leadership styles is paramount.
Role playing is a helpful tool for training. As an example, one of us was working with a group of senior managers who were all very accustomed to “towing the line” and afraid to voice their own opinions about ways in which the company was at risk. In order to get them to experience a different way of behaving, they were separated into several groups, and each group was tasked with coming up with ways to cause the company to fail. In that way, they voiced their concerns about what was currently going on. Afterwards they all saw how they had opened up, and as a result were now able to identify the areas in which the company was vulnerable.
Changing culture is actually not that hard, once you know what needs to change. That is where most organizations fail: they make assumptions about their culture without actually measuring. And they have not have an effective model for behavioral norms that promote agility—until now. The ability to link culture to the desired behavioral norms is a game changer. Doing so is the “critical path” item for transformation that results in more agility.
Agile 2 provides some powerful behavioral norms and patterns to consider, but they will not work if the culture is not aligned with those new norms. The culture is what makes new behaviors sustainable—or not.
