Transformation – Get Your Culture Right From the Start

Over the last couple of decades, the theory of delivering change has become increasingly sophisticated and, in larger organisations, ubiquitous. Yet, we still seem incapable of delivering the change we want within time, cost, or quality boundaries. Despite the commoditisation of change skills, the number of tools and templates available to manage or control, and the depth of thought capital at our disposal, something is missing.

Cultural Drag

I recently dined with a retired senior exec of a FTSE 100 company. Someone who had both driven and seen change from the highest levels, understanding how it affects the bottom line, both short-term and sustainably. Among the normal conversation – state of the nation, economic outlook, etc. – we got onto the subject of transformation and change.

We both felt that culture is the biggest challenge in invoking and cementing change. It was variously described as ‘permafrost’ and ‘an anchor dragging on the seabed, slowing the ship down’. Melting the permafrost or weighing anchor is decisive in successful transformation.

Those at the sharp end of the business often see the need for change, as do the business leaders. But in the middle, the culture permafrost blocks progress. The trouble is that the culture has ‘always been successful’ and is ‘our recipe for success’, or ‘that’s just how we do things around here’. Changing the culture causes fear and confusion because people can’t often architect it, let alone implement it.

Yet, every organisation has a culture, whether architected or not. Not addressing culture during change will deliver mediocre results at best.

Cultural Fix

So, here’s a quick guide to dealing with cultural change and a culture of change:

1. Start at the top – not just at the exec level but also at the board. Execs and Non-Execs must start behaving in the way they promote to be right. Anything else comes across as cynicism about the values and beliefs espoused. To put it another way, whatever culture pervades the board will be felt long and hard by all others in the business. Yet how many senior execs and NEDs actively participate in culture architecting and implementation?
2. Make culture the centre of transformation. Why are we changing culture? If we understand the context in which our business works, the capabilities required to execute strategy, and the control necessary to drive and measure performance, then we need a defined culture that will improve the transformation but also make change sustainable.
3. Map the Culture. Culture isn’t an abstract notion that somehow binds people together. It is a tangible set of artefacts that can be described, moved, shaped and implemented. Everyone feels how an organisation behaves. Are we saying that we cannot architect this? Oftentimes, we just don’t have the tools to understand and describe culture. How do we see culture in the organisation? It manifests in the organisational structure, power bases, resource investment, policies and procedures, accountability and empowerment, brand and reputation, diversity and inclusiveness, stakeholder management, communications, supplier management, etc. Ultimately, each relates to specific cultural artefacts that can be understood, configured, implemented, measured and improved. If this can be done, then by definition, culture can be intentional. And that is good.
4. Understand where culture needs to change– what is being done right and wrong, what needs improvement? Are you held back because of cultural idols and habits? How does culture impact corporate behaviour?
5. Define the catalysts and carriers of culture change. What do we do to change culture? How do we exhibit and implement a new culture? Stories, role models, heroes, social networks, etc., can all be used as vehicles for culture change.
6. Create a movement to get momentum. Movements start small and with emotion – where the movement starts is important. Give authority from the top but provide enough independence to carve out the required identity. An acquisition is often used to import culture. Remember, telling people to change culture rarely works – and the ‘ambient culture’ always fights back.
7. Measure Culture’s effectiveness. How do we measure culture’s impact? How do we know it has changed, and what impact should we expect – internally and externally – on reputation, share price, employee attraction and retention, new, expanded, and retained customers, and productivity? Map each of these measures to the original reasons why the culture needed to be recast.
8. Multiple cultures, common values. How do cultures relate to values? In a successful but diverse or global business, different cultures will express the same values differently. Poor examples are when different cultures are expressions of different values. In this case, it is very hard to bridge gaps between cultures, as there is constant friction across cultural boundaries. Imagine the impact of this beyond the business as well. You may well have a supply chain with different cultures, but do you want one with different values? You should not accept different values – the cost of doing business internally and externally is too high.

Deal with the causes, not the symptoms

I have noticed an increasing number of Transformation Programmes now include an explicit “Ways of Working” theme. Often, these initiatives are designed to drive better relationships between discrete business functions, encouraging better behaviour in the workplace. Whilst these might address some obsolete management practices or acceptance of inclusivity and tolerance, they miss the mark and tackle symptoms rather than root causes. Does the recognition that people’s behaviour and working practices need to change point to a deeper need to recast the essence of the transforming organisation, its Culture?

People have shied away from addressing culture within their transformation programmes simply because of awareness or because it is difficult to architect and implement. For many, this has proved to be a catastrophic omission. However, success awaits those who use a framework of tools and techniques. Architecting and implementing culture needn’t be hit-and-miss, and so transformation becomes predictable.