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Lessons from the Field: First Comes Culture – Then Comes Change

Written by Anthony Aguilar

“Complexity is suffocating our business operations. The use of obscure language and the adoption of complex processes add unnecessarily to an already complex environment.”

Organizational culture is a popular topic for business leaders. It is an accepted maxim that culture management is an essential component of effective business management. But, like most business fads, corporate culture as a concept has been distorted, co-opted, obscured, and made overly complex. What is the truth about culture?

For nearly thirty years I have engaged in deep-dive culture analysis of my client companies as a part of change management initiatives (mostly diversity management). I don’t claim to be the absolute authority on the topic of culture, but I do claim a level of clarity about corporate culture based on dozens of intense, in-depth, immersions into the culture of large corporations and hundreds of less intense investigations into the existing culture of organizations of all sizes. That experience has given me some clear insights about how to codify culture and how to assess how culture impacts the conduct of business.

I have never analyzed culture without cause (culture for culture sake). Instead, I have always analyzed culture in conjunction with major change efforts. The purpose of culture analysis is not to change culture (a misnomer), but to understand culture in order to facilitate change. Put simply, most change efforts fail to perform as planned. An understanding of the existing culture increases the probability of successful change by an order of magnitude. Taking that approach to culture analysis has yielded some insight about the nature and impact of organizational culture. Here is what I have learned:

There are no good or bad cultures

Culture is not a good thing or a bad thing. It is just a thing. It is a thing that must be managed as part of good management (along with mission, vision, values, and strategy). Behaviors (the manifestation of culture) that hinder success at one company can help another company thrive. In other words, a behavior or practice that is incompatible with one company’s underlying culture may be fully compatible with the underlying culture of another company and may contribute to that company’s success. In fact, there are ranges of behaviors that can be supported by the core elements of an organization’s culture.

A utility I consulted for had a core belief (level 1 culture) of being a public trust and a specific value (level 2 culture) of customer service. At one point they expressed that customer service value by telling their customers what good customer service looked like because (after all) they (the company) were the experts. When the external environment (regulatory) changed, they changed to a practice of asking customers what good customer service looked like. Both behaviors were manifestations of the same core culture.

The Personality Analog

A simple way to think about organizational culture is as the collective personality of the organization. Just like our individual personality, organizational personality is relatively intractable. That is why I suggest that the idea of culture change is an unreasonable expectation. Our objective should not be to change culture but to understand culture and understand how it impacts behaviors and supports business success.

Bad Habits Happen

Each of us has our own unique personality that drives our behaviors. For the most part, “being me” works well and produces good outcomes. However, occasionally we get into “bad habits”. In like manner, an organization can also develop “bad habits”. It doesn’t happen right away, but over time the collective behavior of an organization can become ineffective and incompatible with its core culture (see Inversion of Values). Overcoming bad habits requires the deliberate installation of better habits (leverage behaviors).

For instance, when IBM (now and back in the 1980s) began imitating new technology companies and losing sight of their core beliefs, their leaders (Gerstner and Rometty) had to install “leverage behaviors” in order to remind IBM employees of their unique culture and inimitable business model.

Culture trumps strategy and leadership

The late Peter Drucker famously said, “Culture eats strategy for breakfast”. I would suggest it also eats leaders for lunch. No leader can change culture with a single two-year program, a massive rightsizing, or even a wholesale replacement of leaders.

In June 2000, Durk Jager, then CEO of Proctor and Gamble resigned under pressure after only eighteen months in the job. He had made promises that he could not keep. Among them, he promised to overhaul the culture of the old-line, household products division (makers of Tide, Bounce, and other well-known household products). This was a case of an executive derailed by the power of culture.

The problems that most often crop up and derail a change effort are associated with how the culture reacts to the change. Successful leaders learn to manage change because they have learned to honor the culture that exists instead of attempting to make radical changes to the culture.

Application to Change: Diversity Management

Every major diversity management initiative I have led begins with an assessment of the company’s culture. Ultimately, the purpose of a diversity management initiative is to influence behavior – we want people within the organization to behave in ways that are inclusive and that use the talents of all employees. Culture is a critical part of that behavior change. If the culture is not supportive of the desired behavior changes then over time people will regress to old behavior patterns (lapse back to natural) and the diversity management initiative will not be sustainable.

A CultureScan™ (my language) is a systematic investigation of an organization’s culture. The information that results from the scan serves as a basis for planning the change process and equipping organizational leaders to manage the change through the inevitable roadblocks. The goal of the CultureScan™ is to provide leaders and managers with the knowledge and tools they need to overcome resistance to the current change effort and to incorporate the conscious management of culture into their daily agendas.

Conclusion

The current efforts to meld quantitative and qualitative methods for culture assessment should focus first on establishing a common language and a common understanding of corporate culture. We need to define our terms and make sure we are not confusing core culture with other environmental factors, like climate, behavioral norms, or leader-influenced practices. For most companies, which have been around over ten years, the idea of creating culture or changing culture is an unreasonable proposition. Rather than adopt the latest shiny object that includes the word “culture”, leaders and culture analysts need to do their homework and adopt a simple, logical concept of culture that can actually be managed and used to sustain company success.

Author

James O. Rodgers FIMC is the leading strategist in the field of diversity management. He has led change initiatives in hundreds of organizations and advised C-suite executives in some of the largest and most successful companies in the world.

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