Here is an excerpt from an article written by Jon Katzenbach and Ashley Harshak for strategy+business magazine. To read the complete article, check out an abundance of valuable resources, and obtain subscription information, please click here.
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Stop blaming your culture and start using it instead — to reinforce and build the new behaviors that will give you the high-performance company you want.
When Alfred M. (Al) Gray Jr. became commandant (the highest-ranking officer) of the U.S. Marine Corps in 1987, most knowledgeable observers believed that the Corps’s fabled “warrior spirit” culture was already damaged beyond repair. During the Korean and Vietnam Wars, the Corps had grown from its historic level of 75,000 regulars to more than 200,000, and its values and discipline had eroded. It would have been easy for Gray to blame the damaged organizational culture for the problems he inherited, and to launch a formal, full-scale change initiative. But instead, he began to praise and seek out elements of the old Corps culture, such as its ethic of mutual respect. For example, he regularly slipped into the mess halls without insignia, so he would be served the same meals as the privates. To this day, Al Gray is the only Marine Corps commandant portrayed in battle fatigues in his formal portrait in the Pentagon. He is one of the most respected leaders in the Marines’ 250-year history.
Leaders like Gray understand the value of an organization’s culture. This can be defined as the set of deeply embedded, self-reinforcing behaviors, beliefs, and mind-sets that determine “how we do things around here.” People within an organizational culture share a tacit understanding of the way the world works, their place in it, the informal and formal dimensions of their workplace, and the value of their actions. Though it seems intangible, the culture has a substantial influence on everyday actions and on performance.
Organizational cultures don’t change very quickly. Therefore, if you are seeking change in your company or institution, you are most likely to succeed using your existing culture to help you change the behaviors that matter most. Bit by bit, as these new behaviors prove their value through business results, the culture you have can evolve into the culture you need.
Blame and Its Alternatives
When a new leader’s strategy puts the culture of a company at risk, the culture will trump the strategy, almost every time. There are good reasons for this. Every company’s identity — the body of capabilities and practices that distinguish it and make it effective — is grounded in the way people think and behave. Deeply embedded cultural influences tend to persist; they change far more slowly than marketplace factors, and cause significant morale problems when not addressed effectively. When your strategy and culture clash visibly, more likely than not, the culture is trying to tell you something about your own leadership philosophy.
But many leaders overlook this message. They blame the company’s culture for the resistance they encounter. In the most extreme cases, they assume an explicit mandate for wholesale cultural change. This leads them to remove key leaders and old practices, restructure operations, set in place new rewards and promotions, and announce other across-the-board programmatic changes. This approach is costly, disruptive, and risky. Moreover, it takes years to accomplish. Working in a culture that is under attack reduces employees’ energy and de-motivates them. It may require a major marketplace or economic disruption to get people to buy in. Clearly, this is not a game for the faint of heart. Worst of all, it is rarely successful; few major corporate transformations, especially those involving a wholesale change in the culture, achieve their intended performance goals.
Alternatively, leaders may try to ignore their culture and act as if it isn’t important. But when overlooked, the hidden power of a company’s culture can thwart any leader’s strategic aspirations. No matter how many top-down directives you issue, they will rarely be executed, at least not with the emotional commitment and consistency needed to make them successful.
This is not to say that your existing culture is sacrosanct. Indeed, many companies need some kind of culture change. There are passive-aggressive cultures where people routinely fail to follow through on their agreements, creative but undisciplined cultures where talented people pull in different directions, and highly politicized bureaucratic cultures that must bear the expense of their heavy-handed management style.
But when you fight your culture head-on or ignore it altogether during a change initiative, you lose the chance of reviving some of the attitudes and behaviors that once made your company powerful — and might do so again. Several studies (including one conducted by Booz & Company and the Bertelsmann Foundation in 2004) suggest a correlation between financial results and a strong, inspiring organizational culture. The correlation is hardly surprising; after all, cultures influence and energize the behaviors that matter most. Procter & Gamble, Southwest Airlines, Apple, Tata, Starbucks, and FedEx are among the household-name companies noted for unique cultures that contribute significantly to their competitive advantage.
Fortunately, there is an effective, accessible way to deal with cultural challenges. Don’t blame your culture; use it purposefully. View it as an asset: a source of energy, pride, and motivation. Learn to work with it and within it. Discern the elements of the culture that are congruent with your strategy. Figure out which of the old constructive behaviors embedded in your culture can be applied to accelerate the changes that you want. Find ways to counterbalance and diminish other elements of the culture that hinder you. In this way, you can initiate, accelerate, and sustain truly beneficial change — with far less effort, time, and expense, and with better results, than many executives expect.
Edgar H. Schein, author of The Corporate Culture Survival Guide (rev. ed., Jossey-Bass, 2009) and a leading authority on organizational culture, tells a story that illustrates the unexpected leverage this approach offers. (See “A Corporate Climate of Mutual Help,” by Art Kleiner and Rutger von Post, s+b, Spring 2011.) Three senior executives of a large manufacturing company — the CEO, chief operating officer (COO), and head of organizational development — visited him, seeking advice on building a more dynamic culture. “Just yesterday,” said the COO, “I had my regular meeting with subordinates. We have a big circular room, and everybody sits in the same place each time. But get this — only four people were present this time, and they still sat at the far ends of this great big table. Do you see what I’m up against?”
“What did you do about it?” asked Schein.
The executives responded at first with blank stares. Then they realized they were part of the system they were blaming. The COO could have made a small but significant change simply by asking the four of them to move their chairs. Better yet, he could ask the full team to vary their seating at the next meeting. The executives spent the next several hours figuring out other minor actions of that sort, which they put in place the following week, with great success.
Myths of Culture Change
Why don’t corporate leaders naturally respond to culture in this productive way? Because of several myths about culture change that have become prevalent in the business world. Each of these assumptions leads to treacherous pitfalls.
• “Our culture is the root of all our problems.” This becomes an all-purpose, convenient excuse for performance shortfalls. “Our process-oriented culture inhibits collaboration,” managers say. Or “our long-standing beliefs about nurturing people make us coddle weak performers.” Underlying this myth is a view that attitudes and beliefs shape people’s behavior. This view ignores the realities of organizational culture. As we’ll see, behavior can influence beliefs at least as much as the other way around.
• “We don’t really know how to change our culture, so let’s escape it.” There’s a long tradition, going back to Lockheed Aircraft’s Skunk Works in the 1940s, of creating pockets of entrepreneurial activity for high-performance results. These are explicitly intended to operate outside the prevailing culture. They may thrive for a few years, but they are typically treated as outliers by the rest of the company. Eventually, they are either spun off or absorbed back into the mainstream, succumbing to the company’s cultural malaise. “Our culture kills even our most innovative efforts” thus becomes a self-fulfilling prophecy. One of the most famous of these efforts was General Motors’ ill-fated Saturn brand, modeled after the culture of Japanese automakers and set up to run separately and independently — but eventually overtaken by GM’s culture.
• “Leave culture to the people professionals.” Executives with an engineering, finance, or technology background often feel ill-equipped to deal with cultural issues. They delegate them to their human resources, organizational development, or communications teams. “It’s all about the ‘soft’ side,” say the executives. “We have to improve our employee engagement scores.” But the quality of the culture is as much a product of the “hard” side of the organization (strategies, structures, processes, and programs) as it is of the soft side (beliefs, opinions, feelings, networks, and communities of common interest). Although your internal professionals can measure and monitor behavior as well as advise line management on culture issues, they cannot motivate, execute, or implement strategic or performance imperatives. Ensuring behavior change that drives competitive advantage is the role of line leaders at multiple levels.
• “Culture is the job of the top leaders.” It is very powerful when the CEO and other top executives take explicit personal accountability for the company’s culture. But senior leaders cannot change cultures by themselves. They operate at such a large scale, and with such broad visibility, that they cannot directly motivate people to implement the specific practices and behaviors that are required. To succeed with a culture intervention, top leaders need the support of many leaders down the line — particularly those who have daily contact with the people whose behavior change is most critical.
Sometimes, this myth manifests itself at the board level. Directors assume that the only way to improve performance is to replace the current CEO with another top leader who can bring forth a new and better culture. Because they are looking for someone who promises major change, the company inevitably gets a full-scale culture overhaul — with all the expense, risk, disruption, and likely failure involved.
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Jon Katzenbach is a senior partner with Booz & Company. Based in New York, he leads the Katzenbach Center, which focuses on innovative ideas in leadership, organization, culture, and human capital. He is the author or coauthor of nine books, including Leading Outside the Lines: How to Mobilize the (In)Formal Organization, Energize Your Team, and Get Better Results (with Zia Khan; Jossey-Bass, 2010).
Ashley Harshak is a London-based partner with Booz & Company. He is part of the firm’s organization, change, and leadership practice, with a focus on the public sector and financial services.