In the last article of this series we explain functional stupidity and how to deal with process driven functional stupidity. In this article we are exploring a much more difficult issue: how to change engrained company cultures.
Culture. It’s of the most important and elusive subjects in large organisations. What is it? How can you improve or shape it? Most employees will be able to broadly summarise the culture they operate in, but if you’re dealing with a large organisation the sum of its part may be very different to the culture within singular teams.
If you’re reading this article you most likely are aware of the importance of culture since time and time again culture is identified as the key driver to an organisation’s performance. It could be argued that one of the main reasons why a CEO gets ousted has to do with the culture he creates. Does it drive performance and innovation or is it permissive, hostile and inhibiting?
Think how a new coach often can change how an entire team plays football, taking the same number of people with the same skills but suddenly creating a winning culture. But whilst leadership in culture is incredibly important there is another factor: Culture is the sum of its parts and whilst it includes leadership it also includes every employee, so to shape it or change it requires a lot of work and patience.
Culture is the sum of its parts and whilst it includes leadership it also includes every employee.
Like anything culture can be shaped, but don’t be mistaken. It’s not something that happens over night.
It’s interesting how we all instinctively know what sort of culture we’re exposed to but defining what it is can be a challenge. We like Phil Lewis’ (Managing Director at Corporate Punk) definition of it:
It’s “the social order, the unseen narrative, the legends and stories in an organisation. The operating system of a company that you don’t necessarily see but has a huge impact on whether you operate fast and smooth or slow and buggy.”
And we’re often in complete denial or unaware on what effect we personally have on it.
When it comes to cultural functional stupidity it often boils down to what isn’t written down anywhere but everyone knows anyway, it’s the way people communicate with each other. It’s the way people behave towards each other. Or as some might say: “It’s the way things are done around here.”
“Culture is like the wind. It is invisible, yet its effect can be seen and felt. When it is blowing in your direction, it makes for smooth sailing. When it is blowing against you, everything is more difficult.” Harvard Business Review
It comes down to nuances such as whether it’s ok to speak to your CEO or the person you are reporting to without having to schedule a meeting 3 months in advance. Are support staff supportive or snipers? Does everyone feel like they can be honest or does everyone think they have the right to be telling others off or instructing them how to do things?
Culture can be subtle and overwhelming at the same time. It’s what causes M&As to fail, it can make people feel happy, inspired or utterly worthless, it can attract or drive talent out the door and it can be the difference in a company’s success or failure. But the funny thing about culture is that it’s one of the hardest things to measure or change.
“Not everything that counts can be counted, and not everything that can be counted counts.”
Attributed to Albert Einstein or William Bruce Cameron
Before jumping on the culture band wagon and running numerous workshops to fix things it’s important to understand whether your culture is broken, needs adjusting or simply small tweaking. Signs of a bad company culture can be stalling projects due to unresolved internal conflicts, lots of resignations due to poor managers, work bullying or despondency. The board or senior leadership usually don’t take notice of bad cultures unless it significantly impacts the bottom line or the innovation chain isn’t producing anything useful. Other ways to determine whether your company culture is broken is to check retention and turnover rates, exit interview scripts, one-on-one interviews with teams and very short pulse surveys that check how your colleagues are doing. Or put simply: are people happy working for you?
There seems to be a lot of analysis and discussion on what culture is and how important it is, but when it comes to practical steps to take theories start to muddle and become complicated quickly with lots of frameworks, leaving a somewhat bitter sweet aftertaste of ‘is that really going to do anything?’.
Having worked for many large organisations and implemented change here’s what we have learned that works when shaping and changing culture:
This is easier said than done. It’s important not to simply rely on surveys and what people say. Biases are a key aspect of how we behave in organisations and it requires uncovering the unspoken truths and ways of doing things. Are your employees able to resolve conflicts in an effective way? Is creativity and innovation part of how you do things on a daily basis or simply lip service covering up old ways to getting things done?
This is one of the easier tasks. However be honest and realistic about what culture will work to achieve your goals. You may also find that you have and need different cultures in different teams, especially if you’re operating in a large global environment. For instance the culture in your customer service team is most likely different to your R&D and innovation team or your finance team. It’s good to find common denominators and values that apply across the board but be wary of a one size fits all approach. The larger the organisations the harder it becomes to influence culture on a micro level since teams will most likely feel removed from ‘corporate culture’ or what works at Headquarters. Remember, culture is something that is owned and created by all, so allow room for nuance and local differences. We like the integrated culture framework used by Harvard Business Review which seems to be heavily influenced by long standing brand personality frameworks.
Initiating cultural change requires planning and involving managers and leadership. It’s important that this doesn’t become a long open secret process but an inclusive one with the view to involve as many people as possible. It’s important that managers are equipped and consulted and have the tools and information they need to include their team in the process. You also need to be prepared to deal with managers who don’t buy into the change in culture. Not everyone is thrilled by change and many simply don’t like it since they worry that their jobs might be on the line or that they are required to change their own behaviour.
Change is much easier digested if people understand why it’s happening. People hate corporate propaganda. It’s crucial that very senior leaders are tasked with openly answering questions and providing consistent and honest reasons why the change in culture is necessary. Is the business threatened by a key competitor? Are you trying to avoid a hostile take over? Or how many people could potentially lose their job if things don’t change? Whilst it’s important to not create a doom and gloom environment and reassure everyone that the measures taken are positive ones people appreciate a certain level of honesty and the feeling that they are part of the solution rather than the problem. And give practical advice rather than great sounding slogans that mean little to nothing.
Do as I say, but not as I do, simply doesn’t work.
Are you asking for drastic change in behaviour? Show how it’s not easy but something you are committed to doing yourself. Maybe it’s a CEO instagram or facebook account, or a weekly diary entry, but the more you can reassure your teams that you are on the same page and just as committed the more will follow. Living it doesn’t mean slogans on a poster in your reception area or a weekly pulse survey.
This is where “functional stupidity” comes to its own. If for instance you are saying people need to be more creative and innovative but you are financially rewarding cut throat ruthless behaviour your culture isn’t going to change.
Culture is the unspoken truth everyone knows.
If managers sing praises of team members who aren’t team players (legends and stories…) or are hiring externals that don’t fit into the new culture then people will very quickly adjust to whatever works best for their own career – no matter how much they supported the idea of a new culture. A great example of how to embed positive behaviour into your company culture is by providing incentives and mechanisms that encourage the behaviour that needs most attention. Some companies provide quarterly bonuses based on how much praise employees received from customers, how much they gave back to their team or the local community and how much spark or delight they provided to projects or clients. This can be done as self assessment that gets reviewed by line managers or peer review such as ‘kudos’ points. But be careful that it does not become gimmicky – reward system can easily be ridiculed or ignored if the reward is negligible, too childish and the actual winners are people who didn’t change at all and continued to climb up the corporate ladder regardless.
To know whether things are changing you need to have a data framework in place that monitors and shows progress. There are many different ways how you could implement simple yet effective systems to gauge ongoing sentiment and progress but make sure that whatever data you collect is thoroughly founded in your business culture strategy and provides as real as possible picture on the ground and not just someone’s feeling on the company at a particular week 51 weeks ago.
A once a year employee survey is absolutely not the way to track and monitor company culture.
Some alternatives could be weekly or daily very short pulse surveys simply asking how your employees are feeling that day that feed into dashboards across the company all the way up to the C-suite.
If you have a solid and easy ongoing way of tracking and monitoring company culture you will be aware of early warning signs or teams that might need attention. Having this sort of insight into your company can be invaluable rather than depending on delayed financial results.
By the time you’ve lost revenue or profit it’s often too late to do anything about it.
Make it a priority by C-suite to review cultural signs and ensure you have responsible and senior team members who are trained and equipped to deal and implement with changes where necessary.
Not everyone is going to buy into your culture. Some people will love it. Others will hate it and leave.
There is no point in trying to hang on to people who don’t row with you.
But what you can do is ensure that you’re hiring people that fit and promote your company culture. New people can energise teams and inspire people to be better themselves, so make hiring talent based on culture a key aspect of your recruitment strategy.
Let’s make one thing clear: cultural change does not happen over night. For cultures to change deep seated learned patterns and expectations need to shift.
People who have been scarred in the past or lost faith in the cause won’t be convinced by a poster or a one-off workshop. If you pay lip-service to cultural change but fail to address any of the actual underlying issues you will only reinforce what many expected at the outset and do more damage than good.
The only way to change culture is to change behaviours and overcome engrained biases. There is so much more we could say on company culture but we hope this article is useful in helping you shape and change your company culture.