Tag Archives: leadership

Leaders and Culture

Leaders, through their words and actions, send messages as to the right and expected way to interact and do things.

Culture is created by shared experience, but it is the leader who initiates this process by acting out his or her beliefs, values, and assumptions in the behaviors he or she demonstrates and the practices he or she uses.

Anyone who has worked with a very good leader or a really bad one can clearly recall the effect that this individual had on the culture of their work group, division, function, or organization. Remember the ‘micro-manager’ that was constantly looking over your shoulder and telling you in agonizing detail how to do things or the leader that never ever made a decision? How did it impact the way people worked? Almost definitely, there wasn’t a lot of empowerment, the energy level in the group was low and people felt undervalued and disrespected.

On the other hand, many of us have been fortunate enough to work with leaders who have given people the freedom to make decisions within their area of responsibility and according to their capability level. How different is that? People are energized, feel empowered and take personal responsibility for their decisions. It seems obvious but most of us would much prefer the opportunity to work with leaders (anyone in a position of influence over others) who empower people rather than those that micro-manage. It affects our morale, productivity and performance. This is why it is extremely important that leaders are aware of the ways that their behaviors and the practices that they use, influence others, their work group and organization’s culture.

Leader Behaviors

Leaders, through their words and actions, send messages as to the right and expected way to interact and do things.

The good news is that leader behaviors and practices can be used in an intentional manner to accelerate culture change and strengthen alignment to strategy. This is not to suggest that changing behavior and practices is easy, but it is one of the most powerful tools that leaders have available to them. This is possible because people notice absolutely everything that a leader says and does. If a leader always arrives early for a meeting, his or her direct reports will do the same or risk the stigma of being unpunctual and disrespectful of others time. If the leader always wears the appropriate safety gear on a work site, people know this is important and they can likely expect censure if they don’t do the same.

Of course, the opposite is also true. A leader that blames someone else for his or her mistake is telling people that avoidance of responsibility for one’s actions is okay. We also see examples of both positive and negative messaging in what leaders say. Keep in mind that every word and action of a leader is carefully examined for subtle nuances and hidden meaning. However, not all leaders are created equal. The level of influence of a leader, or a leadership team, is directly related to the extent others perceive them to be authentic, credible, trustworthy and having integrity.

Authenticity: Genuineness or truth.

Credibility: The ability to inspire belief or trust.

Integrity: Possessing and steadfastly adhering to high moral principles or professional standards.

Trustworthiness: The belief that a person will not take advantage of another who puts him or herself in a vulnerable position.

At the core is the message that the leader genuinely believes in what he or she is doing and saying; that he or she is 100% committed in both words and actions to doing what he or he believes is needed; and that, at the same time, there is an overarching sense that he or she adheres to high moral principles and standards of behavior. In other words, this is someone that others can trust – period.

Leader Practices

Practices are the building blocks that define “the way that things are done around here”.

Leaders also impact culture by the practices that they use in performing their jobs and interacting with people. Practices are the repetitive patterns of activity essential to the smooth functioning of an organization. They cover a wide range of routines including the way leaders make decisions, run meetings and recognize people, just to name a few. They are the building blocks that help to shape “the way that things are done around here”. Practices are different from organizational processes which define how things are done. For example, a process might be the activities and tasks to complete in order to safely add new to a highway whereas a practice is the way this is done such as the use of concrete barriers to protect workers.

Shaping and Changing Culture

While culture change is not easy, it is possible to make it happen and achieve concrete results in a matter of months and not years as popularly believed. We’ve seen numerous examples in all sizes of companies across a wide range of industries and sectors that support this statement. In some cases, the change is dramatic and others less so but, in all cases, leaders were the catalyst for the change that occurred. How did they do it?

The leaders used a combination of their own behaviors and a set of practices carefully selected to fit their purpose. In one case, the leader was frustrated by a lack of discipline that he believed was negatively affecting productivity and his department’s ability to meet its objectives. He decided that he was going to do something about it. Within his work group, he introduced practices designed to bring more discipline into the way people worked. The leader reinforced these practices with his own behaviors. For example, he made it clear that people were expected to be on time for meetings and scheduled appointments, no exceptions and no excuses. To this end, he introduced the following practices and behaviors:

  • Practice 1: Meetings started and ended exactly at the scheduled time. If the meeting was to start at 9:00 a.m., he locked the room door and started the meeting. People were not allowed to enter the meeting after it started. This included his boss and other senior people. It caused quite a stir at the beginning!
  • Practice 2: Appointment times were strictly adhered to. If someone was late for an appointment, the appointment was automatically cancelled. This was a big deal as it was extremely difficult getting time booked with the leader who spent a lot of time at work sites. It could be weeks before people had another chance to meet with him.
  • Behavior: The leader always arrived at least 5 minutes early for every meeting. If it was someone else’s meeting, he would wait 10 minutes and if the meeting hadn’t started, he would leave. Initially, this was a problem with his boss and his boss’ peers in other groups however he was able to manage the issue by agreeing to return to meetings if required. He made his point swiftly and effectively.
  • Result: Within days, people began to show up on time for their appointments. Within a few weeks, people consistently arrived on time for meetings and not just his meetings but also meetings hosted by his boss and others in the organization. Meetings became more efficient and effective and people appreciated that they could depend on the fact that the meetings would always end on time.

He also introduced a number of other practices which he supported through his own behavior. Many of these were small like the ones in this example but the results were huge. Although the change started small with only one department, the change in performance of that department drew attention to what the leader was doing. Soon other departments began to follow suit and within a matter of a few months a significant shift in culture had taken root across the organization.

In Summary

The Good News:

You may not have the power to change the culture of the whole organization, but you can change the culture in your work area and, perhaps, influence the culture of the department, division, region and even the organization.

  • Leaders can use their words and actions in an intentional and purposeful way to influence the norms of behavior in use in their organizations and thereby shape culture.
  • When a critical mass of leaders purposefully and authentically demonstrates the same core set of behaviors, the potential for positive change increases dramatically.
  • Every leader can change practices that are part of the way that work is done on a day-to-day basis.

The Challenge:

Using leader behaviors and practices in a purposeful and mindful way to shape culture requires…

  • A high level of self-awareness that only comes from deep personal reflection which is a skill that few of us have and needs to be developed and honed.
  • A high level of constant vigilance to notice how one’s words and actions are influencing the behaviors of others and to pick up on the subtle clues and messages that people provide.
  • The courage to stand by one’s convictions and the tenacity to stick with it for the long term.
  • The organizational acumen to make sure that your plans don’t get derailed by people at higher levels.

Dr. Nancie Evans
Dr. Nancie Evans is co-founder and VP Client Solutions at Culture-Strategy Fit Inc. specializing in the alignment of organizational culture and strategy. She has developed a unique set of leading-edge diagnostic tools and approaches that provide leaders with deep insights into the culture of their organizations, how it is supporting or getting in the way of strategy execution, as well as the levers that they can use to drive rapid culture change.

CULTURESTRATEGYFIT®
Culture-Strategy Fit Inc. is a leading culture and executive leadership consulting firm conducting groundbreaking work in leveraging culture to drive strategy and performance. Its suite of culture surveys and culture alignment tools are used by market-leading organizations around the world.

Contact Us
www.culturestrategyfit.com
1.800.976.1660
nancie@culturestrategyfit.com

© CULTURESTRATEGYFIT® All rights reserved

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  "articleBody": "Culture is created by shared experience, but it is the leader who initiates this process by acting out his or her beliefs, 
values, and assumptions in the behaviors he or she demonstrates and the practices he or she uses.
Anyone who has worked with a very good leader or a really bad one can clearly recall the effect that this individual had on the culture of their 
work group, division, function, or organization. Remember the ‘micro-manager’ that was constantly looking over your shoulder and telling you in 
agonizing detail how to do things or the leader that never ever made a decision? How did it impact the way people worked? Almost definitely, there 
wasn’t a lot of empowerment, the energy level in the group was low and people felt undervalued and disrespected.
On the other hand, many of us have been fortunate enough to work with leaders who have given people the freedom to make decisions within their 
area of responsibility and according to their capability level. How different is that? People are energized, feel empowered and take personal 
responsibility for their decisions. It seems obvious but most of us would much prefer the opportunity to work with leaders (anyone in a position 
of influence over others) who empower people rather than those that micro-manage. It affects our morale, productivity and performance. This is why 
it is extremely important that leaders are aware of the ways that their behaviors and the practices that they use influence others, their work 
group and organization’s culture. 
Leader Behaviors
Leaders, through their words and actions, send messages as to the right and expected way to interact and do things.
The good news is that leader behaviors and practices can be used in an intentional manner to accelerate culture change and strengthen alignment to 
strategy. This is not to suggest that changing behavior and practices is easy, but it is one of the most powerful tools that leaders have 
available to them. This is possible because people notice absolutely everything that a leader says and does. If a leader always arrives early for 
a meeting, his or her direct reports will do the same or risk the stigma of being unpunctual and disrespectful of others time. If the leader 
always wears the appropriate safety gear on a work site, people know this is important and they can likely expect censure if they don’t do the 
same. 
Of course, the opposite is also true. A leader that blames someone else for his or her mistake is telling people that avoidance of responsibility 
for one’s actions is okay. We also see examples of both positive and negative messaging in what leaders say. Keep in mind that every word and 
action of a leader is carefully examined for subtle nuances and hidden meaning. However, not all leaders are created equal. The level of influence 
of a leader, or a leadership team, is directly related to the extent others perceive them to be authentic, credible, trustworthy and having 
integrity. 
Authenticity: Genuineness or truth.
Credibility: The ability to inspire belief or trust.
Integrity: Possessing and steadfastly adhering to high moral principles or professional standards.
Trustworthiness: The belief that a person will not take advantage of another who puts him or herself in a vulnerable position.
At the core is the message that the leader genuinely believes in what he or she is doing and saying; that he or she is 100% committed in both 
words and actions to doing what he or he believes is needed; and that, at the same time, there is an overarching sense that he or she adheres to 
high moral principles and standards of behavior. In other words, this is someone that others can trust – period.
Leader Practices
Practices are the building blocks that define “the way that things are done around here”.
Leaders also impact culture by the practices that they use in performing their jobs and interacting with people. Practices are the repetitive 
patterns of activity essential to the smooth functioning of an organization. They cover a wide range of routines including the way leaders make 
decisions, run meetings and recognize people, just to name a few. They are the building blocks that help to shape “the way that things are done 
around here”. Practices are different from organizational processes which define how things are done. For example, a process might be the 
activities and tasks to complete in order to safely add new to a highway whereas a practice is the way this is done such as the use of concrete 
barriers to protect workers.
Shaping and Changing Culture
While culture change is not easy, it is possible to make it happen and achieve concrete results in a matter of months and not years as popularly 
believed. We’ve seen numerous examples in all sizes of companies across a wide range of industries and sectors that support this statement. In 
some cases, the change is dramatic and others less so but, in all cases, leaders were the catalyst for the change that occurred. How did they do 
it?
The leaders used a combination of their own behaviors and a set of practices carefully selected to fit their purpose. In one case, the leader was 
frustrated by a lack of discipline that he believed was negatively affecting productivity and his department’s ability to meet its objectives. He 
decided that he was going to do something about it. Within his work group, he introduced practices designed to bring more discipline into the way 
people worked. The leader reinforced these practices with his own behaviors. For example, he made it clear that people were expected to be on time 
for meetings and scheduled appointments, no exceptions and no excuses. To this end, he introduced the following practices and behaviors:
Practice 1: Meetings started and ended exactly at the scheduled time. If the meeting was to start at 9:00 a.m., he locked the room door and 
started the meeting. People were not allowed to enter the meeting after it started. This included his boss and other senior people. It caused 
quite a stir at the beginning!
Practice 2: Appointment times were strictly adhered to. If someone was late for an appointment, the appointment was automatically cancelled. This 
was a big deal as it was extremely difficult getting time booked with the leader who spent a lot of time at work sites. It could be weeks before 
people had another chance to meet with him.
Behavior: The leader always arrived at least 5 minutes early for every meeting. If it was someone else’s meeting, he would wait 10 minutes and if 
the meeting hadn’t started, he would leave. Initially, this was a problem with his boss and his boss’ peers in other groups however he was able to 
manage the issue by agreeing to return to meetings if required. He made his point swiftly and effectively.
Result: Within days, people began to show up on time for their appointments. Within a few weeks, people consistently arrived on time for meetings 
and not just his meetings but also meetings hosted by his boss and others in the organization. Meetings became more efficient and effective and 
people appreciated that they could depend on the fact that the meetings would always end on time.
He also introduced a number of other practices which he supported through his own behavior. Many of these were small like the ones in this example 
but the results were huge. Although the change started small with only one department, the change in performance of that department drew attention 
to what the leader was doing. Soon other departments began to follow suit and within a matter of a few months a significant shift in culture had 
taken root across the organization.
In Summary
The Good News:
You may not have the power to change the culture of the whole organization, but you can change the culture in your work area and, perhaps, 
influence the culture of the department, division, region and even the organization.
Leaders can use their words and actions in an intentional and purposeful way to influence the norms of behavior in use in their organizations and 
thereby shape culture.
When a critical mass of leaders purposefully and authentically demonstrates the same core set of behaviors, the potential for positive change 
increases dramatically.
Every leader can change practices that are part of the way that work is done on a day-to-day basis. 
The Challenge:
Using leader behaviors and practices in a purposeful and mindful way to shape culture requires…
A high level of self-awareness that only comes from deep personal reflection which is a skill that few of us have and needs to be developed and 
honed.
A high level of constant vigilance to notice how one’s words and actions are influencing the behaviors of others and to pick up on the subtle 
clues and messages that people provide.
The courage to stand by one’s convictions and the tenacity to stick with it for the long term.
The organizational acumen to make sure that your plans don’t get derailed by people at higher levels.
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Lesson 4: Who Are Your Leaders?

A Leader's Sphere of Influence

Culture is created by shared experience, but it is the leader who initiates this process by acting out his or her beliefs, values, and assumptions in the behaviors he or she demonstrates and the practices he or she uses.

So far, we have focused on senior leaders due to the power they have to drive change. Specifically, we’ve examined how a senior leader can shift culture by intentionally using the tools at his or her disposal. When this is done effectively, change within his or her sphere of influence is pretty much guaranteed.

Yet, it isn’t only people in senior leadership roles who have influence. Anyone in a management position has the capacity to affect the people reporting to them, while highly regarded individuals in non-management roles influence their peers and others in their network. In other words, every leader regardless of level can influence culture however, the extent depends on their sphere of influence.

This is important for two reasons. For one, if you can identify the leaders in your organization with the largest spheres of influence then align and engage them in culture change, you can accelerate the change process significantly. Second, focusing on high influence leaders allows for a targeted approach and investment that optimizes the use of precious resources while achieving the desired outcomes. This doesn’t mean you ignore the rest of the organization. Obviously, other people with less influence are part of the culture and need to be considered in the change effort. The difference is in the strategies you use to engage them.

A Leader’s Sphere of Influence

A leader’s sphere of influence refers to the people and things (that is; policies, processes, structures, space and so on) directly or indirectly affected by his or her actions. The size and scope of the sphere of influence is determined, in part, by the person’s role, responsibilities and relationships. In other words, the more senior you are, the greater your potential influence and capacity to effect change.

A Leader's Sphere of Influence

In a small organization, the senior leader or leadership team is typically involved in most if not all aspects of operations, thus their sphere of influence is extensive and powerful. This is what is meant by the phrase “you can see their fingerprints on pretty much everything”.  Other leaders have influence over people and things, but this is limited. As an organization grows, we can see an increase in the scope of influence below the senior management level. This does not mean that the senior leaders’ sphere of influence has diminished. The increase in size and complexity that accompanies growth requires senior leaders shift more and more of their attention to strategic matters and delegate responsibility for running the business to people at lower levels. As a result, front-line employees, their managers and their managers’ managers may have limited, if any, contact or interaction with senior leaders.

The outcome is an increase in the influence of mid-level managers and the immediate manager. People in these roles directly effect the work experience of the people who report to them and the way things are done within their area of responsibility. They also indirectly affect people and work in adjacent areas. To make matters more complex, leaders can also be found in non-management roles usually by virtue of their expertise, personality and/or credibility. The result is a complex web of shared connections and work creating overlapping spheres of influence.

Why is this important? When a critical mass of leaders is aligned and committed to achieving a common goal, it creates an amplifying effect exponentially increasing the probability of achieving meaningful, sustained culture change in a relatively short period. The bottom-line is the more tools used in an intentional and aligned manner by the more people in positions of influence, the greater the impact and speed of change. Consider for a moment the potential for accelerating culture change by engaging influential leaders. If we can align the behaviors and practices of these leaders, we have the potential to create an “influence bomb”. In other words, we can maximize impact by focusing on the critical few. This creates new demands on people in senior leadership roles as they must not only lead the way but identify, engage and support leaders at all levels through the change effort.

Leaders Exist at Every Level

So, who are your ‘leaders’? One thing for sure is they can’t be identified simply by job titles and descriptions. Job titles generally indicate a person’s position in the organization’s structure while job descriptions broadly define the person’s role, responsibilities and level of authority. They might even include the word ‘leader’, but this doesn’t mean the person is a leader.

A leader is anyone who others follow and who, in turn, influences others’ beliefs, values and behaviors. He or she may be in a leadership role by nature of his or her position in the organization, such as a manager, team leader or supervisor. However, a leader can also be a technical expert, a person with a lot of seniority who knows how to get things done, someone with a charismatic or relatable personality, or anyone that others look to for guidance. These informal leaders do not have the same capacity to effect change however, they can still be highly influential.

This was evident in spades at a global security company where I participated in a study of innovation practices. The company had managed to hire a core group of highly respected software engineers to develop new product solutions using cloud technology. These individuals had tremendous credentials with work experience at companies like Google, Yahoo and Amazon. Yet, here they were working in an outdated office at an industry mall located at the outskirts of Irvine, California. To put this in perspective, the company is in the security industry not high tech and the office didn’t even have a decent coffee maker, never mind any of the bells and whistles offered by other employers. Why did the engineers choose to work here?

For one, the opportunity to have a significant role working with leading-edge technology on a full product solution was a huge factor. This is what helped them to land the first engineer; that, and an attractive compensation package. The rest of the team however, followed the first engineer. They wanted the opportunity to work with him trusting that if he thought the work was interesting and exciting, they would too. A few team members had in fact followed him from company to company. As a result, instead of having to recruit the other members of the team, they had people knocking at their door.

To be clear, the first engineer was not the team leader or manager. He had absolutely no interest in either role. Yet, arguably he had more influence on other members of the team than anyone in the organization regardless of their job title or position. He set the ‘rules’ and others followed. This included adopting flexible work hours, creating physical spaces where the team could collaborate, participating in open source communities, hosting ‘beer Friday’ progress reviews, and utilizing agile development practices. These were things he had experienced working with other high performing teams that he believed created the right kind of environment for the team to be creative and do their best work.

In this case, the manager of the team’s role was, to use a football analogy, run block for the first engineer and the team. This involved navigating the bureaucracy to make sure the right people were aware of what was happening and supported the team. This was no easy task as the

Leaders Exist at Every Level

company was indeed large, slow-moving and hierarchical with a strong aversion to risk and propensity for standardization and compliance. Despite his efforts, there were numerous situations where people in functional groups tried to force the team to comply with company policies and eliminate non-standard practices. Most were the results of complaints from other employees who believed they should have the same opportunities and perks as the engineering team. Fortunately, senior executives recognized the importance of the team’s efforts and were closely monitoring its progress. They also recognized that attracting and retaining top engineering talent required protecting the team from the existing culture and allowing them latitude to operate outside accepted norms and policies. The result was a team culture that was a stark contrast to the culture in the rest of the company. It was agile, flexible, adaptive and responsive; attributes critical to innovation.

Five Essential Leadership Qualities

What was so special about the first engineer that other top professionals looked to him for leadership? He was a leader because other people viewed him as such, not because he chose to be or as a by-product of his position and seniority. The company employed many engineers with even more experience however, few came closer in terms of influence. When asked to what he attributed his influence, he responded with a shrug and “I don’t know” so, we asked his peers.

First and foremost, he was widely acknowledged as one of the absolute best software engineers in his field. This wasn’t the result of a degree or professional accreditation but rather credibility he earned through his work, articles and blogs he wrote, and his participation in open source and other forums. Second, he was passionate about his work and wanted people to challenge and question him. He had a healthy ego but, at the same time, he valued the ideas of other experts, which made for some intense and, to quote, “incredibly stimulating and productive arguments and debates”. Third, he was a team player who was fun to work with. Bottom-line, he was respected and, as more than one person said, “I like to work with people I know, like and respect”. Fundamentally, he demonstrated five qualities essential to developing the trust-based relationships required to be an effective leader at any level:

Authenticity: True to self and genuine. The first engineer was very clear on what was important to him which was evident in his reasons for joining the security company instead of one of the big, sexy high-tech firms. The security company promised to meet his need to work on leading edge tech while providing creative freedom, flexibility and ownership of a solution. He could also work with other experts and people he liked presenting an opportunity to learn and grow professionally; something very important to him. In other words, he chose to work at a place and with people aligned with his personal values. In so doing, he demonstrated a high level of self-awareness and the courage to make choices consistent with his values. He was also transparent and forthcoming in sharing these values and expectations, as well as his opinions and concerns, with his peers, manager and others. While, they might not agree, he expected people to respect his views and values. As a result, people knew what was important to him and could accurately predict how he would react in different situations.

Credibility: Respected and believable. The first engineer knew his stuff which automatically gave him street cred, especially with his peers. If he said something, they believed him. The thing is this wasn’t limited to his area of technical expertise. When he shared his opinions on people, processes and policies, for instance, his peers listened and usually adopted similar views. This meant he had tremendous potential as an agent for change. It also meant that his concerns or negative experiences had a much greater impact on others than might be expected. This was abundantly clear when it came time for performance reviews and merit increases. The company’s policy was to direct managers to rank performers within a team from top to bottom and allocate merit increases accordingly. Added to this were policies limiting the maximum percentage and amount of the merit increase based on budget and compensation range. This was not received well by the first engineer who was very vocal in sharing his discontent with the rest of the team. In short order, this became a significant issue with team members openly talking about job opportunities elsewhere.

Trustworthiness: Honest and reliable. He does what he says he will do. His words and actions are 100% consistent; he ‘walks the talk’. If the first engineer said he was going to do something, he delivered to the best of his abilities. This wasn’t isolated to his job, specific tasks and deliverables but extended to meeting the team’s commitments. If he saw another person struggling, he would step in to help never asking for recognition or credit. This was also evident in the way he worked with other groups. A lot of the team’s deliverables depended on people in other functions and business units who worked in more traditional ways. This meant the team had to adopt practices so they could move forward despite the obstacles they faced. It wasn’t good enough to point a finger at another group when things went wrong. They did everything in their power to meet their commitments and, on the rare occasion when they were unable to deliver, they and the rest of the organization knew it wasn’t for a lack of effort.

Collaborative: We not me. While the first engineer was widely viewed by his peers as the informal leader of the team, leadership often shifted between team members as they worked together to solve a problem or complete a deliverable. There were also times when he deferred to the team manager, such as when there were issues with other teams that needed positional clout to resolve. This is what they meant when his peers described him as a team player. Rather than assuming the role of leader with the rest of the team following, he was a partner and collaborator. If there was an issue to be dealt with, he came to the table as an equal participant with other members of the team. People listened to him and often moved forward with his ideas because of his expertise not because he was their ‘leader’. They would go to him with questions, to bounce ideas around and ask for his thoughts on things they were working on because they valued his insights and vice versa.

Integrity: Does the right thing, always. Possesses and steadfastly adheres to high moral principles or professional standards. For the first engineer, and other experts, integrity is essential as it is the foundation of credibility and respect. This requires acting in a manner that is beyond reproach especially when it involves sharing knowledge and ideas. The first engineer and members of the team drew heavily on the work of external experts available through open source and professional forums. They spoke about this openly always attributing ownership to the source. This was an unspoken credo. If anyone was to ‘steal’ someone else’s code or ideas and, heaven forbid, imply it was their own was to risk immediate and significant censure.

When a leader embodies these five qualities, he sends the message that he genuinely believes in what he is doing and saying; that he is 100% committed in both words and actions to doing what he believes is right; and he adheres to high moral standards. In other words, this is someone that others can trust – period.

The Manager as Leader

In an ideal world, we would see these qualities in everyone who holds a management title and position. Unfortunately, this isn’t always the case, which is why I argue you can be a manager and not a leader. Leadership is earned not given. It isn’t a title that can be bestowed on a person. It is something others give because they trust and want to follow a person.

Managers have influence because of their position of authority over others. If the manager isn’t trusted, this influence is limited to the people and things under their direct control. On the other hand, if the manager is trusted, his sphere of influence expands in breadth and depth. The people who he works and interacts with look to him for guidance and are proactive in following his lead. They engage with him on an emotional level. This applies to people who report to him directly as well as others within his network. With this in mind, we are going to take a closer look at two management roles that play an important part in culture change.

The Importance of the Immediate Manager

Anyone who has worked with a very good or bad manager can clearly recall the effect this person had on the culture of their department or team. Remember the ‘micro-manager’ that was constantly looking over your shoulder and telling you in agonizing detail how to do things or the manager that never, ever, made a decision? How did that affect your work experience? On the other hand, many of us have been fortunate enough to work with managers who empowered us to make decisions and backed this up with the support and guidance we need to be successful. How different was that?

Whether a manager is good or bad, if they have people reporting to them and assign work, evaluate performance, determine rewards and impact career options, they influence others and culture. This power over others creates a dynamic whereby people look to their immediate manager for guidance in terms of behavior and work practices. For instance, if the manager is detailed-oriented, the people who report to her quickly learn to pay attention to detail. This is simply common sense. For this reason alone, it is important to engage managers in the change process. If senior leaders are saying one thing, even if their actions are consistent with their words, and the immediate manager is doing something different, in most cases people will follow the lead of their manager who they believe has the greatest impact on them personally.

This is important as it highlights the need to develop strategies to engage and align managers regardless of their scope of influence. If they have people reporting to them, they influence behavior and practices which means they impact culture. While it doesn’t make sense to engage them in the same way we would high influence leaders, it is important to include strategies that make the immediate manager part of the solution.

Caught in the Middle   

I can’t tell you the number of times I’ve heard senior leaders point to mid-level managers as ‘the problem’ in change initiatives. They believe that employees and front-line managers are on board, but those darn middle level managers keep getting in the way. In one particularly memorable instance, the CEO of a large multi-national telecom manufacturer described mid-level managers as a ‘sponge’ – they soak up information shared by executives and drip down bits to front-line managers and employees. In other words, they filter the information to the point that the message is lost or distorted. The result is confusion and misunderstanding leading to unclear priorities and a lack of alignment which negatively affects performance and the change effort.

In all fairness, mid-level managers have perhaps the most difficult role in an organization. They are expected to translate senior leader’s vision and strategy into actions, which often involves leading strategic initiatives and complex projects. At the same time, they are expected to

Corporate Leadership

communicate priorities and manage the performance of work by lower level managers who look to them for direction and support. To make things even more challenging, they are also expected to work across boundaries to ensure alignment in executing the strategic priorities. This places them in the difficult position of having to juggle demands from several directions. They are literally caught in the middle.

At the same time, the nature of their role means the mid-level manager has tremendous potential to affect and accelerate culture change. One of the most effective strategies for changing culture is to use projects and strategic initiatives as vehicles for introducing new behaviors and practices. They can also identify systemic barriers which need to be addressed to support and sustain the change. By taking this approach, culture change is embedded in business-as-usual activities versus treated as a distinct initiative, thereby creating a higher probability of success. This approach also provides a unique way to learn new behaviors and practices while proving the merits of the new way of working thereby accelerating adoption in other parts of the organization. It is particularly effective in addressing challenges working across boundaries as this is a common feature of complex projects and strategic initiatives.

In Summary

While people in senior leadership roles are critical to the success of any culture change endeavor, it is important to remember that leaders exist at every level. These are the people others look to for advice, guidance and support. They earn the right to lead by being respected and trusted; they are credible, authentic, trustworthy, collaborative and have integrity. They have the power to intentionally shape the culture within their sphere of influence (the formal and informal groups that they belong to).  They do this through their words and actions which send clear messages to those around them that this is the ‘right’ or ‘best’ way to go about doing things. Identifying and enlisting a critical mass of these high influence leaders is important to the success of any culture change initiative.

Second, while a management title doesn’t mean someone is a leader, it is an indicator the person has influence over others behavior and work. As a result, culture change initiatives should include strategies to align and engage the immediate manager. These strategies are going to be different from those applied to high influence leaders but are still important. Third, mid-level managers, especially those who are influential leaders, have tremendous potential as change agents. In addition to their personal influence, the strategic initiatives, projects and businesses they manage are potential learning laboratories for the new culture. These can be used to learn new behaviors and practices and identify systemic barriers while at the same time providing proof of the benefits of culture change. Finally, people in positions of authority must be vigilant and fully committed to supporting these leaders otherwise, and I quote, “the organization’s immune system (existing culture) will kill the organism (new culture)”.

 

© CULTURESTRATEGYFIT® All rights reserved

Dr. Nancie Evans
Dr. Nancie Evans is co-founder and VP Client Solutions at Culture-Strategy Fit Inc. specializing in the alignment of organizational culture and strategy. She has developed a unique set of leading-edge diagnostic tools and approaches that provide leaders with deep insights into the culture of their organizations, how it is supporting or getting in the way of strategy execution, as well as the levers that they can use to drive rapid culture change.

CULTURESTRATEGYFIT®
Culture-Strategy Fit Inc. is a leading culture and executive leadership consulting firm conducting groundbreaking work in leveraging culture to drive strategy and performance. Its suite of culture surveys and culture alignment tools are used by market-leading organizations around the world.

Lesson 3: The Leader’s Culture Change Toolkit

Encouraging words for leaders who are trying to change their culture for the better.

Most leaders already have the fundamental skills required to effectively lead culture change. They are terrific problem solvers and action-oriented. When faced with a challenge, they shift into solution mode relying on personal experience and the advice of trusted colleagues and subject matter experts to identify the best approach for the situation. They search their bank of past successes and lessons learned to identify actions they believe will deliver the desired results. Many of these include behaviors, practices and systemic changes to structures, processes, policies and so on.
This is what Bill did so well as told in the story in Lesson #1. He used behaviors, practices, stories (remember the one about the cell phone and locking the CEO out of the meeting room for showing up late), structure and processes to create a more disciplined culture. In other words, he intentionally used the tools in his personal toolkit to achieve and sustain a significant change in culture.

The Personal Culture Change Toolkit

So, what is the leader’s personal culture change toolkit? Basically, it consists of the tangible elements of day-to-day life in an organization. These fall into two categories: people and environment. People tools refer to the actions that convey what is important and valued to individuals and teams. These are shared primarily through social interactions, such as observation and first-hand experience. The environment tools are the ‘systemic’ elements of the organization that determine the way people work and interact. These are important as their design can either support and encourage the desired behavior or create significant obstacles to adoption.

People Tools
The ‘people tools’ are the actions explicitly directed at influencing people. Behaviors and practices were introduced in an earlier chapter, so I’ll just provide a brief recap. Behaviors are the oft unconscious actions that we demonstrate in response to different situations. These actions send signals that tell others what is expected and, when the leader is influential, the best way to act. For this reason, it is important that leaders are self-aware and in touch with the ways that their words and actions are influencing others’ behavior and shaping the culture around them. Practices are the repeat patterns of activity or routines that leaders use as they go about their day-to-day work. They are different from processes which are the transformation of an input into an output. An example of a practice is the way you run meetings. If you run your meetings in a structured and disciplined manner, it sends a very different message than if your meetings are ad hoc and infromal. Thoughtfully using a mix of practices is an especially powerful strategy for reinforcing new behaviors and shifting culture.

Stories and Heroes
Stories and heroes refer to the telling of events involving people doing exceptional things. This is a powerful way to send a message about what is valued and important. They can be told in formal and informal settings and through a mix of verbal, written and visual media. The more stories about different people doing something that brings the values and desired behaviors to life, the better. The key is they must be authentic, credible and relatable.

Turtle in a bowl - company cultureThere is a great WestJet Airlines commercial that illustrates this beautifully (https://www.youtube.com/watch?v=o5nfJ_u_8Ws). In the commercial, WestJetter Amanda helps a little girl and her family who find out they can’t bring her pet turtle on the plane. Her solution? She offers to look after ‘Steve’, the turtle, until they return from their vacation. The message is that Amanda is an owner and owners care, which is a core value of the company. This is just one of several videos showing employees going above and beyond to help their customers. It sends a clear message of what is important and valued to employees, customers and any one else who cares to listen. By the way, if you want to really understand your culture, ask people to tell stories about the company at its best and its worse. It is amazing what you will uncover.

Traditions and Rituals
Traditions and Rituals are a forum to celebrate the things that really matter. While common in families and religions, they can also be found in organizations usually taking the form of a special event such as a family picnic, annual profit-sharing celebration or Christmas party. To be considered a tradition or ritual, they must be meaningful and endure the test of time. An example is an annual family picnic that emphasizes the importance the company places on employees and their families, as well as the desire to nourish a sense of family and community within the company itself. If the picnic is only held once, it is a nice gesture. When it is a recurring event held for several years, it becomes a tradition.

Company Picnic - Corporate Culture

Traditions and rituals are usually established by founders and other senior leaders, however, leaders at lower levels can also do something meaningful but on a smaller scale. These events rarely become traditions as circumstances can change limiting their ability to endure over time (i.e., budget cuts, staffing changes etc.). Their power is in the potential to augment the global message by making it personal – this leader personally believes in the importance of family and creating a sense of community.
One of the challenges with traditions, and why it is important to be intentional in using them, is they become part of the company’s identity and embedded in the tacit employment contract. As a result, discontinuing a tradition, such as the family picnic, sends a strong, usually negative, message to employees. This is regardless of how good the reasons and how effective you are communicating them. In the end, employees interpret discontinuing the picnic as the company no longer values employees and their families. They point to other things the company is spending money on as evidence that leaders could continue the picnic but are choosing to do otherwise. This is why cost-cutting initiatives that target these types of events should be carefully considered and the consequences evaluated before taking action. In the end, the long-term impact of cutting the family picnic may far outweigh the short-term benefits.

Environment Tools
Environment tools are the elements of an organization that create the conditions to encourage and sustain new values, behaviors and practices. My favorite way to explain this is to consider what it takes to successfully lose weight. I can change my behavior by modifying my eating habits and going to the gym on a regular basis. I can adopt new practices such as weighing myself weekly, tracking my food intake and attending group support meetings. However, if my kitchen cupboards contain my favorite high-calorie snacks and the gym is 45 minutes from home, chances are sooner or later I am going to fall off the bandwagon. The same thing happens in organizations when leaders articulate new values and expected behaviors but don’t make the environmental changes required to support them. Even when significant time, money and attention is invested in initiatives such as communication and training, a lack of aligned structures, processes, policies and so on sends conflicting messages that discourage change and reinforce existing behaviors.
Now, you might be thinking, these are tools that only leaders in senior positions can use. The truth is every leader, regardless of level, can use the environment tools. However, the scope and scale depends on the leader’s role, responsibilities and level of authority. For example, senior leaders are accountable for the overall design of the organization’s structure providing direction including boundaries and limitations for lower level design efforts. Mid-level managers apply these parameters in designing the structure of their area of responsibility and lower-level managers to the design of their teams. The same applies to processes, policies, systems, space and symbols.

Structure
Structure determines who does what and how decisions are made in pursuit of an organization’s goals. It involves the design of roles, responsibilities, reporting relationships and authority levels. This includes temporary governance structures, such as advisory boards and management committees, as well as team structures. Structure has a powerful effect on culture influencing the ways people work and interact within and across levels, teams, business units, functions and geographies.
As an example, organization structures tend to fall somewhere between hierarchical or mechanistic and organic or flat and can take various forms depending on the company’s operating model. Hierarchical structures tend to provide a clear chain of command however, they can contribute to bureaucracy and slow decision-making. In many hierarchical structures, business units operate independently which means collaboration between groups can suffer. On the other hand, flat structures use teams to respond and adapt quickly to challenges and opportunities which is critical in dynamic external environments. While this allows for faster decision-making, it can lead to confusion and inefficiencies especially as an organization grows. If the teams operate independently, which is often the case, there is also the potential for redundancies and breakdowns in collaboration.

The way functional reporting relationships are designed also affects culture. Specifically, are the functions, such as Sales, Finance and Human Resources, centralized or decentralized? Do the functions report directly to the business units or are they operating as shared service centers providing support to the business units? Perhaps they report directly to a Corporate executive and indirectly to the business units as is common in a matrix structure, or maybe functional roles are fully integrated into project teams as in a flat structure. This is important because the functions own many of the processes and policies that determine the way things get done and thereby affect culture. In some organizations, this includes acting as a ‘gatekeeper’ to ensure consistency and manage risk. Anyone who has had to go through multiple steps to get Legal approval for a contract or business deal knows how this affects culture. Talk about bureaucracy!
While the above examples are part of the senior leader’s toolkit, managers can also use structure to intentionally shape culture albeit not to the same extent. Managers and team leaders typically decide who does what and how employees are going to work together to deliver expected outcomes. For example, in transactional roles such as Accounts Payable and Receivable, jobs are usually designed with efficiency of task completion a priority. This results in discrete roles with very structured job descriptions that offer little flexibility or opportunities for personal growth. The culture, at least within this team, places a high value on normative practices such as process consistency and compliance, as well as orderliness and attention to detail. While this might make perfect sense for the Accounts Payable and Receivable department, the same structure applied to a team of Software Engineers tasked with developing new products would be a disaster. For this team to be productive, the culture needs to encourage collaboration, experimentation (including making mistakes), flexibility, adaptability and responsiveness, as well as execution and results. Rather than narrowly defined roles and job descriptions with clear task allocation, a loose and flexible team structure is a much better option.

Systems, Processes and Policies
Systems, processes and policies (“the system”) are the guidelines and integrated methods and procedures that define how work is to be performed and people are expected to behave. This includes boundaries and limitations, as well as best practices. In my experience, a lack of alignment between “the system” and desired behaviors is one of the most common obstacles to culture change. This is notwithstanding the fact many organizations do a good job aligning Human Resource processes and policies to support desired behaviors.
Talent acquisition and management processes, performance management systems, competency models, employee training and manager development programs, as well as rewards and recognition programs,  are some of the tools typically used to encourage specific behaviors and help change culture. I emphasize ‘help change’ versus ‘change’, as Human Resources processes and policies on their own are rarely sufficient to achieve the desired results. This is not to say they aren’t important or relevant. They are. The point is that most organizations stop here and don’t make the necessary changes to other parts of the system.
Pretty much every organization has functional groups such as Sales, Legal and Finance. Even small companies have an overarching system of controls to ensure fiduciary, regulatory and legal compliance, at a minimum. As organizations grow, the role of the functions tends to expand and with it their influence over day-to-day work. The need to reduce waste and lower costs, increase efficiency and effectiveness, and reduce risk are just a few of the drivers behind this shift. Now, you might be asking what does this have to do with culture? The answer is a great deal; every function has policies, procedures and processes that affect the way things get done, otherwise known as culture.
Take for example an organization that needs to become more agile in order to compete in an increasingly dynamic and unpredictable marketplace. By increasing agility, the company should be able to respond quickly and adapt to changing circumstances, which is a must in this type of environment. Now, let’s say this same organization is a large, mature global company that insists employees comply with restrictive Finance, Legal and Human Resource policies and procedures when making decisions. For instance, there are strict limits on spending reinforced by delegation of authority (DOA) policies and a rigorous expense approval process. All contracts regardless of the cost, including rental of off-site meeting rooms, require multiple layers of Legal review and approval. Furthermore, senior executives must sign off on all new hires and promotions per Human Resource policies. This isn’t exactly a system designed to foster agility. In fact, some might (and do) call it downright bureaucratic.
How successful do you think the culture change effort will be if these and other relevant policies, processes and procedures remain the way they are? It will fail…100% guaranteed. Even if Human Resources does a terrific job defining the desired behaviors and embedding them in their processes and programs, the change effort will be for not. There is simply too great a disconnect between the desired behaviors and the system. For the company to become more agile, it must make substantial changes to these and other elements of the system at both the macro and micro level.
While the above is an example of the macro level system in action, managers and team leaders play a critical role in identifying the required macro and micro level changes. They work most closely with front-line employees and understand the nuts and bolts of the day-to-day performance of work. If an organization needs to be more agile, it is the lower level managers and front-line employees who can identify the specific changes required to align the system in support of the desired behaviors. Simply asking them what is stopping them from being agile (of course, supported by a clear description of what this means) is guaranteed to elicit useful information about obstacles and potential solutions.

Space
Space refers to the design and use of the physical workplace. It includes micro spaces such as individual and team workspaces; shared spaces such as meeting rooms, cafeterias and collaborative work areas; outdoor spaces such as parking lots, gardens, courtyards and sports fields; and, macro spaces such as building and campus floor plans. Every one of these spaces has the potential to help build and shape culture at the same time as it supports strategy execution and the effective completion of work.

Man working alone in a cubicle - company cultureLet’s say, for example, leaders have identified the need to increase creativity and generate more good ideas in support of innovation. How can the design and use of physical space help or get in the way? Consider for a moment a traditional office building floor plan comprised of walled offices for managers and cubicles for non-managers. These are connected by a hallway that wraps around the central elevator core and stairwell. There are a few meeting rooms located off the hallway also at the core. These are equipped with standard furnishings and decor, such as a table and chairs, speakerphone, screen and projector with computer connections and a few pictures on the walls. Also located at the core are washrooms and a shared supply room that serves a dual purpose providing vending machines that dispense snacks, drinks and coffee. Sound familiar? Space is expensive so companies try to use it as efficiently as possible. This might be fine if people need quiet spaces to focus on their work and complete tasks. However, it is hard to see how this would inspire creativity and idea generation.

Corporate Culture Strategy

Now, contrast this with a workspace specifically designed for this purpose. Perhaps you envision a Google-type workplace where the design of space encourages people to come together to interact, play and have fun. Alternatively, maybe you’re thinking of war rooms, coffee shops, team layouts, movable walls, learning labs or other spaces designed with creative collaboration in mind. There are lots of options. The art and science is in the intentional design of space to serve a purpose and fit the people and work they are doing. This purpose can and should include building or changing culture in support of your strategy and goals. While space used in isolation of other tools is not enough to change culture, intentional design can help accelerate change, encourage new behaviors and reinforce values.

Symbols
Symbols are the tangible objects or artefacts that we encounter in the workplace. They include signs, awards, product samples, photos, wall murals and basically anything we can see or touch. Their power is in the meaning they hold for the observer, which can be different depending on the context and person. For example, the image at right is a photo of a poster hanging on the wall of a meeting room at a Toronto Public Relations firm. Take a close look. What is the meaning of the poster?

Hand print artwork - Company culture
Perhaps you thought the following:

  • They are obviously ‘creative’ (and have too much time on their hands)…yep, this was someone’s answer.
  • The hands look like they are from members of a team who probably did something special, hence the ‘High Five’ at the top.
  • Several hands are small, so it is a team made mostly of women.
    The different colors symbolize diversity. Diversity of background, experience and thought is important.
  • People signed their names below their hands, so they recognize not just the team but each team member’s contribution.

The real story behind the poster, as provided by the firm owner, is it is a celebration of the contribution each person makes to the success of the firm. By working together and learning from each other, they create outstanding solutions that are recognized by their clients and the industry (they’ve received multiple industry awards which are displayed in the entrance lobby). Every person brings something unique that makes a difference and continues even after they leave. This is captured in the names beneath the handprints, many of whom are people no longer with the firm. The lesson is that objects and artefacts can be powerful tools for reinforcing values, sharing memories and shaping culture. However, it is important to remember that people can interpret things differently, which means the meaning you intend may not be what is received.
I encountered this recently while being escorted on a tour of a Corporate Headquarter building. Just off the lobby, in a high traffic area, was a wall covered floor to ceiling with a mural depicting the history of the company. Impressed, I commented on some of the themes I noticed such as its longevity, the continuity of leadership and commitment to organic growth versus acquisitions. It seemed to me to suggest an organization that is proud of its heritage, as well as somewhat cautious but has been able to adapt as the world changes. The Director escorting me paused, looked at the mural, looked at me and said, most employees view the mural as company propaganda intended for customers. All the things I say may be true, but employees see the mural as a symbol of resistance to change, out-of-touch leadership, risk aversion and bureaucracy. To them, the company is stuck in the past, whereas it should be focused on the future. Sure, there is a message about the company being a survivor and overcoming challenges, but recent experience is raising questions regarding its ability to change fast enough to be viable in today’s marketplace.
This brings up another important point. There must be congruence between the symbol and people’s experience for it be an effective tool. Symbols can be aspirational, but they must be real and authentic. For example, a company that launches a campaign using events, programs and artefacts to encourage employee engagement would be ill-advised to do so when they are laying off people. Similarly, I encountered a good example recently when visiting a manufacturing site. One of the first things I saw when I entered the building was a sign stating, ‘Safety First – Safety is Everyone’s Responsibility’. Next to it was a large scoreboard itemizing the previous quarter’s performance on key safety indicators. This included the number of incidents, days lost due to accidents, and the number of near misses. This looked great. Obviously, the company is serious about safety, right?
The problem is that, throughout my visit, I saw numerous safety violations starting with me being allowed on the floor without the appropriate gear. What message does this send to employees? For symbols to be effective in building and changing culture they must be meaningful, clearly explained and consistent with people’s lived experience. If not, they can serve to damage the change effort and the leader’s personal credibility.

In Summary

Most culture change initiatives focus on defining values and expected behaviors, which are communicated to managers and employees with the expectation they will demonstrate these behaviors in their work and interactions. Recognizing that telling people to behave differently usually doesn’t produce results, most organizations embed the expected behaviors in Human Resource programs, policies and processes, such as talent acquisition and performance management systems. Some even offer training programs to teach managers how to role model and change behaviour. Yet, these efforts only scratch the surface when it comes to the tools available to change culture.
As we know, engaging leaders is critical for any change effort to be successful. This is especially true in the case of culture change. Every leader influences culture through their words and actions as they go about their day-to-day work. The behaviors they demonstrate, practices they use, stories they tell and traditions they establish serve to reinforce what the organization, and they personally, believe is important and valued. By using these people tools in an intentional manner, leaders set clear expectations for behavior that are reinforced in people’s day-to-day experience. Even better, when they align the work environment by making relevant changes to structure, processes, policies, space and symbols, they create the conditions for the new behaviors to take root and flourish.
The exciting thing is leaders already have access to the tools they need to drive culture change. They are using them now as they go about their work and interact with people. The problem is leaders aren’t aware of these tools or, if they are aware, don’t know how to use them in an intentional manner to change culture. This creates a huge opportunity for most organizations. Instead of taking years, culture change can occur in months by helping leaders learn how to use their personal toolkit and align their efforts to achieve a shared vision of the future.

Dr. Nancie Evans
Dr. Nancie Evans is co-founder and VP Client Solutions at Culture-Strategy Fit Inc. specializing in the alignment of organizational culture and strategy. She has developed a unique set of leading-edge diagnostic tools and approaches that provide leaders with deep insights into the culture of their organizations, how it is supporting or getting in the way of strategy execution, as well as the levers that they can use to drive rapid culture change.

CULTURESTRATEGYFIT®
Culture-Strategy Fit Inc. is a leading culture and executive leadership consulting firm conducting groundbreaking work in leveraging culture to drive strategy and performance. Its suite of culture surveys and culture alignment tools are used by market-leading organizations around the world.

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Culture Change: Senior Leaders Must Lead The Way

Culture Change - Senior Leaders Must Lead The Way

Culture Change: 30 Years of Lessons Learned

It’s been a long time coming, 11 years and multiple drafts, but I’m excited to announce that my book is finally looking like it is going to be completed. Yay! In my book, I share the many things I’ve learned over 30+ years of searching for the answer to one question: How do we achieve meaningful and sustained culture change in organizations?

This is one of the chapters from the book. I am offering it in the hope it provides some useful insights but also to ask for your feedback. I would sincerely appreciate any thoughts or suggestions you would care to share. Thank you in advance! Onwards….

Lesson 1: Senior Leaders Must Lead The Way

Who is accountable for an organization’s culture?  The answer is leaders. By ‘leaders’, I mean anyone at any level who others look to for guidance, especially people who hold senior positions in an organization. The reason is simple — leaders are the single most important factor in determining the success of any culture change effort.

If you rolled your eyes and said ‘duh…everyone knows that’, you’re not alone. After all, if senior leaders are committed to the change effort, they will make it a priority and allocate the resources, required to be successful. Right? The answer is ‘yes and…’

Absolutely, leaders must commit time, people and money if the change effort has any chance of being successful. The thing is they need to go further which means owning it. They must be fully committed to the change and personally involved in a meaningful way in all phases of the change effort. Sure, they are going to need help, but they are going to have to lead the way which means showing — not just telling — others what is expected, making tough decisions and creating the conditions for success. It can’t be a, nice to do, nor can it be delegated to Human Resources or others.

Isn’t Culture a Human Resources Thing?

In almost every organization I’ve worked with, Human Resources are responsible for culture. Leaders might say they own it, but the reality is they typically articulate values and, in some cases, identify the culture the organization needs, communicate this to employees and then hand off the heavy lifting to Human Resources to make the change happen. Unfortunately, this doesn’t work.

Don’t get me wrong. Human Resources plays a critical role in culture change. They own a lot of the processes that encourage and reinforce expected behavior, such as hiring practices, performance management systems, advancement criteria and so on. Leadership and organization development professionals can also provide leaders with expert guidance and support in areas such as behavior change, coaching and feedback and change management.  In other words, Human Resources can and should be strategic partners helping leaders with the change effort, but they cannot do it for them.

Why not? Three reasons —- behaviors, practices and environment.

Leaders’ Actions Send Messages to Others

Through their words and, more importantly, their actions, leaders send messages about the expected way of doing things. When words and actions are consistent — they walk the talk — the message is clear and pretty much guaranteed to influence others to behave in a similar manner.

Image of a department head leader offering assistance to one of the team members.

The thing is employees notice absolutely everything that a leader says and does. If a leader consistently arrives early for a meeting, his or her direct reports will do the same or risk being perceived as unpunctual and disrespectful of others’ time. If he or she always wear the appropriate safety gear on a work site, people know this is important and they can expect to be censured if they don’t do the same. Of course, the opposite is also true. A leader that is frequently late for meetings and appointments sends the message that it is okay not to be punctual. Likewise, a leader who blames others for his or her mistakes is telling people through his actions that avoidance of responsibility is okay.

What if there is a disconnect between what a leader says and does? The answer…people will default to actions as the real message. If a leader says candor is important and she wants employees to openly voice their concerns and then reacts negatively to their comments, guess what the message is? Candor means telling her what she wants to hear. A few situations like this and people will have figured out the rules — how to make her believe they are being candid while protecting themselves from harm. The leader is happy thinking employees are speaking candidly when the reality is far different. To make matters worse, the credibility of the leader has been damaged. People now know not to believe what she says but rather to look to her actions for direction.

The bottom-line is a leader’s words and actions must be consistent and role model what is expected — no exceptions and no excuses! No amount of effort by Human Resources can replace this.

Leaders Reinforce Culture in Day-To-Day Practices

Practices are the repeat patterns of activity or routines that people use as they go about their work. They are different from processes which involve the transformation of an input into an output. Practices cover a wide range of routines including the way decisions are made, information is shared, and people are recognized, just to name a few. They are the building blocks that help to determine “the way that things are done around here”.

While every employee use practices to some extent, leaders employ more of them more extensively which gives them greater influence over culture. This includes the approach they take to developing plans, conducting meetings, managing performance, developing employees, and so on and so forth. To illustrate the effect practices have on culture, contrast meetings that are managed in a structured and disciplined manner with ones that are loosely organized.

Leader asking questions to one of the team members

A disciplined approach to meetings typically includes a carefully designed agenda that is sent out well in advance. Materials such as briefing notes and reports are distributed prior to the meeting with clear instructions regarding expected action, such as read prior to the session and come prepared with questions. In some cases, there is even a clear ask such as, this item requires a decision while another seeks advice or feedback. The meeting itself starts on time and the agenda is tightly managed. The rules of engagement are clear and closely monitored. Minutes are taken with decisions and actions noted and distributed to the attendees. This approach is usually preferred by leaders who value efficiency and discipline. They assess the effectiveness of a meeting by the decisions made, issues resolved, and actions identified. Relationship building is, in most cases, viewed as secondary to achieving these objectives.

Loosely organized meetings are very different. These are usually preferred by leaders who believe the primary purpose is to share information, exchange ideas and build relationships. For these leaders, making decisions, resolving issues and developing action plans happens in other ways. It is therefore not surprising that their meetings often lack structure and discipline. If there is an agenda, it may or may not be followed. It might even be sent out in advance and include some pre-meeting materials but there is an implicit understanding that this is a guideline rather than a commitment. Often, a good portion of the agenda is never reached, and this is okay. Similarly, there may or may not be minutes depending on what happens in the meeting and if any decisions are made or actions identified.

This is just one example. If the same beliefs are reflected in other practices, there is a compounding and reinforcing effect. For instance, a leader who believes relationships are critical might take a consultative and inclusive approach to decision-making and problem-solving. Similarly, a leader who believes discipline and efficiency are the keys to success is going to apply this in other practices such as, setting clear objectives and systematically monitoring and measuring performance. The more different practices are consistent, the more impact they have on culture. This is what I call using a network of practices, which is discussed in more detail in a later chapter.

The practices used by leaders not only reflect their beliefs but are an indicator of their expectations of others. If a leader believes discipline is important, he is going to assess others performance and abilities using this as a criterion. Anyone who demonstrates a lack of discipline, as perceived by the leader, is taking the risk of being judged negatively. In fact, practices may be even more influential than behavior as they directly affect the way people work and interact and how they are perceived by others. Once again, this is not something Human Resources can do for leaders.

Leaders Create the Conditions for Success (Environment)

Leaders also determine the design of structures, systems and processes. They decide how space is used, what artefacts are on display (or allowed) and what traditions and rituals are practiced.  By the choices they make, leaders create the conditions that encourage and reinforce expected behaviors and practices.

My favorite way to explain this is to use a metaphor of someone trying to lose weight. It is easy to identify the behaviors to start and stop, such as eating more fruits and vegetables, cutting out foods with high levels of sodium and sugar, and exercising more. It’s also easy to identify practices to reinforce these behaviors such as using an app to track food consumption and exercise, weighing in on a weekly basis and attending regular meetings with other people who have similar goals. If I do these things, chances are pretty good I am going to lose weight at least in the short term. The challenge, as many of us know, is overcoming temptation especially when you’re stressed or tired. This is where the environment plays an important role by creating the conditions for success.

If the kitchen cupboards are stocked with salty snacks, cookies and chocolate, eventually the temptation is going to be too great to resist. Similarly, if other family members are munching away on high-calorie foods and drinks that you love, I can pretty much guarantee everyone of us is going to cave. Likewise, if you hate going to the gym and this is your main source of exercise, there is no way you will be able to sustain the motivation to keep going. This is what I mean by the environment needing to support the desired behaviors in order to create the conditions for success.

Supervisor leader overseeing work performed by team members.

We see this same pattern repeated over and over in organizations. A tremendous amount of effort and resources is invested in articulating and communicating the case for change, values and expected behaviors. Expected behaviors are then embedded in various Human Resource processes such as talent acquisition and so on. There may even be a commitment to coach and hold leaders accountable for modeling these behaviors. Yet, time and time again these efforts fail to result in meaningful, sustained culture change. Why not?

When we ask people to change their behavior but don’t align the system to support these behaviors, we are setting them up to fail. Human Resource policies, programs and processes are a critical part of this system. Aligning these to support the desired change is essential and fortunately usually happens, at least to some extent. The problem is other important parts of the system, many owned by other functions and groups, often get ignored.

Take Legal, for example. In large mature organizations, the Legal group is often a gatekeeper reviewing and approving contracts or arrangements. It is not unusual, to hear stories of long delays and the need for multiple levels of approval to get something done. This happens for very good reasons, such as the need to protect the organization’s best interests, meet its regulatory and legislated obligations, manage costs and get the best possible deal with suppliers. It does, however, contribute to slow decision-making and missed opportunities.

Let’s say things change. New competitors, emerging technology and changing market and customer expectations require increased speed and responsiveness to compete. In other words, the organization needs to be more agile which means decisions need to be made swiftly often with limited data meaning risks are going to be taken and mistakes made. This is a significant culture change for an organization that has been successful operating in a slow, cautious and methodical manner. The thing is, for the organization to become agile, the role of Legal and many of its core processes and policies need to change. They must align with and support agile behaviors and practices. This is threatening not only to Legal as a function but to its individual members. It also challenges existing beliefs as to the best and right way of doing which motivates people, often with good intentions, to resist the change.

Clear communication of the case for change accompanied by the effective implementation of change management practices can help to overcome resistance, at least to some extent. However, for the change to be successful and accomplished in a reasonable time, senior leaders must be actively involved in identifying and implementing the required changes to structures, processes, policies and so on. To be clear, they are not doing this alone. They need to engage subject matter experts and others whose expertise is critical to arriving at the best possible solution. The leader’s role is to challenge, push and test to ensure changes deliver the expected results. Ultimately, leaders must create the right environment so new behaviors can take root and flourish. They must be willing to make tough, unpopular decisions and hold people accountable in order to create the conditions for successful culture change.

The good news is culture change can be achieved in a matter of months, not years, when senior leaders effectively use a combination of behaviors and practices and create the conditions for success. To illustrate, let’s look at the story of Bill G., CFO of a large U.S. telecommunications company.

Bill’s Story

Bill had recently been hired to replace the outgoing CFO who was retiring. He brought to the role 25 years of experience and a proven track record leading several finance organizations in the telecommunications industry. The company he joined was a relatively young organization but growing quickly as it capitalized on new and emerging technology. It was known to be innovative and entrepreneurial with tremendous growth potential.

It wasn’t long before Bill realized that this entrepreneurial spirit included what he described as ‘an allergic reaction to anything resembling discipline, structure or process’. Employees, led by senior leaders, saw these as bureaucratic impeding their ability to be flexible, responsive and take risks; qualities that had played a major part in their success to date. As a result, past efforts made by the Finance team to introduce more discipline in areas such as budgeting, reporting and analysis never got off the ground.  Bill experienced this first hand at one of the early meetings he attended with the rest of the executive team.

The executive team was meeting to decide on the coming year’s advertising plan and budget. Several options were on the table for consideration requiring a sizable financial investment. The discussion was animated as executives shared their opinions as to the best way to proceed. This went on for a while with a lot of back and forth as people discussed the merits of the different options. When Bill suggested they consider the results from past advertising campaigns, there was silence. It turns out, there was no data available. Marketing didn’t have any performance metrics and wasn’t tracking results. Executives were making decisions involving millions of expense dollars based on intuition and personal preferences.

The more questions he asked and investigating he did, the more he realized this was the way things were done. Discipline was simply not part of the culture. He saw examples everywhere he looked from day-to-day practices such as meetings and appointments to decisions involving millions of dollars. While the entrepreneurial spirit was great, the lack of discipline was costing the company large sums of money due to rework, redundancies, poor decisions and so on and so forth. This was also contributing to productivity and performance issues, as well as taking people away from doing higher value work. The challenge, as he saw it, was to introduce more discipline without crushing innovation and agility.

The Solution Part 1 – Behaviors and Practices

Recognizing the difficulties in attempting to tackle the issue at the enterprise level, he decided to focus on things within his immediate control and sphere of influence. He started by introducing practices designed to bring more discipline into the way the Finance team worked starting with meetings and appointments. Bill reinforced these practices with his own behavior. For example, he made it clear that people were expected to be on time and prepared when attending meetings, no exceptions and no excuses. To this end, he introduced the following practices and behaviors:

Appointments and One-on-One Meetings

Practices

  • To schedule an appointment with Bill, people had to explain why the meeting was required and the expected outcome. If his input or a decision was required, relevant background information was to be provided so he could review it prior to the meeting.
  • Appointment times were strictly adhered to. If someone was more than 5 minutes late, the appointment was automatically cancelled, and the person was forced to reschedule another date. This was a big deal as it was extremely difficult getting time with him. It could be weeks before the next opening in his schedule. People quickly learned to be on time.
  • Bill’s schedule included time for travel to meetings, unexpected requests, preparation and other events. While there were times when emergencies required a change to his schedule, these were the exception and time was blocked to allow for canceled appointments to be rescheduled at an early date.

Behaviors

  • Bill was always on time for appointments and he expected the same of others.He read everything provided in advance. If the work provided wasn’t up to his standards, he would send it back and, in some cases, canceled the appointment. Initially, he provided clear written feedback as to what was missing and questions that needed to be answered. This happened once. After that, the person was expected to figure out what was missing and fix it.
  • At the end of one-on-one meetings, he provided feedback including what was done well and needed to be improved for the next time. For example, he expected people to provide a recommendation with their rationale when asking him for input or a decision. His feedback included coaching to help the person improve the quality of their recommendations.

Meetings

Practices

  • Meetings started and ended exactly at the scheduled time. If the meeting was to start at 9:00 a.m., he locked the door and started the meeting. People were not allowed to enter the meeting after it started. This included his boss and other senior people. It caused quite a stir at the beginning!
  • Bill introduced a set of practices aimed at improving the efficiency and effectiveness of meetings. These included publishing the meeting agenda with background information to be reviewed one week ahead of the meeting date. The agenda included the ‘ask’ for each item, such as provide input, identify issues or obstacles, make a decision or provide information.  Items that fell into the ‘provide information’ category were reviewed to determine if these could be effectively addressed in other ways and removed from the agenda. The amount of time allowed for each agenda item was determined by the complexity of the topic and the “ask”. In the meeting, these timelines were strictly adhered to albeit with some growing pains at the outset. Initially, agenda items were closed without having achieved the “ask”. As the team got better at using the available time, this became the exception rather than the rule.
  • He also implemented meeting principles that clearly defined expectations for behavior. These included being present and engaged which meant turning off cell phones and other non-essential devices. To address potential emergencies, he provided a person outside the meeting to contact. These principles were posted on the meeting room wall and used as a form of performance review at the end of each meeting. Specifically, the team quickly did a ‘green, yellow, red’ scorecard of each principle to indicate what they did well and needed to do better. A brief discussion of the ‘do better’ principles clarified expected changes for the next meeting.

Behaviors

  • Bill always arrived at least 5 minutes early for every meeting. If it was someone else’s meeting, he would wait 10 minutes and if the meeting hadn’t started, he would leave. Initially, this was a problem with his boss and his peers, however, he was able to manage the issue by getting their buy-in and agreeing to return to meetings if required. He made his point swiftly and effectively.
  • In the first meeting he hosted, one person made the mistake of not taking him seriously and answered a call. Bill stopped the discussion, walked up to the person and held out his hand for the phone. He told the person at the other end to call back when the meeting was over and turned off the phone. He then took the phone and dropped it in the garbage can. Everyone laughed, and the discussion continued. At the break, the phone’s owner approached Bill and apologized asking if he could have his phone back. Bill said no. The rules were clear and there needed to be consequences. If he wanted a phone, he was going to have to get a new one. The story traveled through the building like wildfire.

Within days, people began to show up on time for their appointments with Bill. Within a few weeks, people consistently arrived on time for meetings and not just his meetings but also meetings hosted by his boss and others in the organization. Meetings became more efficient and effective and people appreciated that they could depend on the fact that meetings would always end on time.

This discipline wasn’t restricted to appointments and meetings. He applied the same principles to performance management, written communications, business case preparation, presentations and an assortment of other practices. He used every opportunity to bring greater discipline into day-to-day work and interactions.

Four months after Bill joined the company, employees described a significant, observable culture shift towards increased discipline resulting from the behaviors and practices he role modeled. Although initially limited to the Corporate Finance team, they were already seeing evidence of change elsewhere as other leaders and teams followed his lead.

The Solution Part 2 – Creating the Conditions for Sustained Success

Leader and team members celebrating a victory with 'high fives'.

In the words of one employee, Bill’s primary goal was to increase the discipline applied to cost management and decision-making by implementing initiatives that would encourage “deeper economic and operational analysis from both a tool and process perspective”. The behaviors and practices he introduced were only the beginning. Bill recognized that addressing the big issues at the enterprise level required a substantial investment in core processes and technology, as well as changes to the way Finance was structured. These changes required careful planning and project management with implementation happening over a period of 24 months.

An Interim Solution – Paving the Way for Change

Prior to Bill taking over as CFO, the vast majority of Finance professionals were generalists who reported directly to business unit leaders. Their responsibilities were broad and included budgeting, cost and sales estimates, expense management, reporting and anything else the business unit leader needed. A few specialists reported directly to the CFO handling Corporate level fiduciary requirements, such as Treasury, Investor Relations, Financial Planning and Analysis (FP&A), and Controller/Accounting.

The Finance generalists concentrated their efforts on meeting the needs of the business unit leaders. As a result, every business did things differently. They had their own way of estimating sales and revenue, budgeting, reporting, managing costs, analyzing results and so on. When it came time to pull together financial information at the enterprise level, the Corporate team had a mess on their hands, if they could get the information they needed from the business at all. This led to long delays and inaccurate and incomplete financial information that no one trusted.

Many of the processes required to solve this problem were already in place. The issue was they were not being followed. One option was to mandate that the businesses comply with the Corporate processes, however, this would put the Finance generalists in the difficult position of having to push back on leaders and not deliver what they wanted. This wasn’t realistic given business leaders set the Finance generalists’ objectives, assessed their performance, determined rewards including merit increases, and had a significant say in advancement and development opportunities. Asking the generalists to put Corporate needs ahead of the business and go against the wishes of the business leader was setting them up to fail.

In the short-term, Bill decided to do things that didn’t totally resolve the situation but certainly improved it. The first was to insist on a greater role in setting expectations and evaluating the performance of the Finance generalists. By making this a shared responsibility, he was able to align their objectives with his priorities while at the same time providing an incentive to consider Corporate Finance requirements when they set priorities. Second, he sought agreement from business leaders to comply with the processes most critical to addressing the issues with the timeliness and accuracy of financial information. Given the severity and visibility of the problem, it was relatively easy to get the support he needed. With this in place, he quickly deployed resources to ensure expectations were clear, and the processes and tools understood.  

Phase Two – Process Changes

With the immediate problem addressed, Bill directed his attention at making the changes required to achieve his goal of increasing the discipline applied to cost management and decision-making. To this end, he identified and set about implementing a set of initiatives targeted at improving the timeliness, quality and quantity of financial information available to business managers when making decisions. This included launching a major Activity Based Costing (ABC) initiative, adding rigor to the approval process for new hires and capital funding, and spearheading a new business priority and objective setting process. He also partnered with the CIO to lead the implementation of a decision-support system (data and analytics). These initiatives were prioritized and carefully planned so as not to disrupt business-as-usual while ensuring progress was made as quickly as possible.

Recognizing this was not a strength in Finance, or elsewhere, Bill established and staffed a new Project Management Office (PMO). The PMO was responsible for helping the various project teams effectively plan, implement, monitor and report on their progress. Although not entirely successful, due to new hires who clashed with the existing culture, it resulted in a level of consistency and transparency that had been absent from past initiatives.

Phase Three – Structural Changes

Approximately six months after the business leaders agreed to follow the prioritized Finance processes, there continued to be major issues with the timeliness and accuracy of financial information. Despite their assurances, the business leaders had quickly reverted to their old ways of doing things insisting that the Finance generalists make their needs a priority. While most of the generalists did their best to deliver the information required by Corporate, workload pressures and competing demands meant delays and inaccurate and incomplete information was the norm.

The situation came to a head when the company was called to task by outside analysts for overestimating projected revenue and failing to notify the market that expectations were going to be missed. Although painful, this was the opening Bill needed to restructure the Finance function. He immediately moved to change reporting relationships so the generalists reported directly to him and indirectly to the business leaders.

Making this happen was not easy. The business unit leaders fought hard to maintain the status quo. They argued that the current structure allowed them to focus their Finance staff on business priorities, such as pricing, competitive bids and so on. They feared that a centralized structure meant they would lose control of these resources which would cause delays in getting the Financial support required to effectively manage their P&L. In the end, the financial forecasting and reporting issues outweighed their concerns and the CEO supported Bill’s restructuring plan.

Almost overnight, things started to improve. The Finance generalists still had a difficult task as saying no to business leaders is never easy. Knowing their boss, Bill, supported them and would step in to help when needed went a long way to giving them the confidence and courage they needed. Indeed, in the early days, there were several stories of Bill confronting business leaders and C-suite executives who tested the new way of doing things. This only had to happen a few times for the situation to improve but the message was clear. This was the new world order…take it or leave it.

Of course, sustainability ultimately depended on Finance’s ability to deliver timely, accurate financial information that addressed the company’s fiduciary obligations and a need for greater discipline in cost management and decision-making. If the problems persisted after the change, things would have quickly reverted back to the old way of doing things. Fortunately, the changes resulted in an immediate improvement to the quality and accuracy of financial information and only got better as the more complex, longer-term initiatives were implemented.

Two years after he was hired, Bill had achieved his goal of increasing discipline in cost management and decision-making. He also changed the culture. By changing core processes and structures, he created the conditions to encourage and sustain higher levels of discipline not just in Finance but across the company. However, as the business unit leaders had feared, there was also a decrease in the flexibility and responsiveness that was such a valued part of the company’s entrepreneurial culture. This contributed to a level of resentment and disapproval of the changes Bill had introduced, although most leaders acknowledged that it was the right thing to do. This rebalancing or calibration of culture attributes is part of the challenge of changing culture, and a topic for a later chapter.

In Summary

Bill’s story is an example of leader-led culture change. He concentrated his efforts on changes within the scope of his role and decision-making authority and used the tools at his immediate disposal to move things forward. This was not a ground-up effort to engage employees to get their buy-in and support. You may also have noticed that Bill’s story doesn’t make mention of defining expected behaviors, communicating these to employees and embedding them in Human Resource processes and practices. Nope…this was an influential leader leading the way through his actions. This is not to say there isn’t value in engaging employees or partnering with Human Resources, which can be powerful ways to accelerate change. It just isn’t the approach Bill used which, contrary to popular opinion, was very effective.

Image of Simple Instructions for Leaders who wish to lead organizational change in their company.

The thing is achieving meaningful and sustained culture change requires that leaders lead the way. They do this by role modelling values and behaviors, using day-to-day practices, and creating the conditions for success. When this is done effectively, culture change is pretty much guaranteed.

Even more exciting is the fact that this is something any leader at any level can do. You don’t have to be in a senior management position. Anyone in a leadership role can use their words and actions in an intentional and purposeful way to shape and change culture. You may not have the power to change enterprise level structures and processes, but you can change the culture in your team and, perhaps in so doing, influence the culture of the organization. Furthermore, when a critical mass of leaders purposefully and authentically uses a similar set of behaviors and practices, the potential for positive change increases dramatically. When the organization system is aligned to support the change, well…the sky is the limit.

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Dr. Nancie Evans

Dr. Nancie Evans is co-founder and VP Client Solutions at Culture-Strategy Fit Inc. specializing in the alignment of organizational culture and strategy. She has developed a unique set of leading-edge diagnostic tools and approaches that provide leaders with deep insights into the culture of their organizations, how it is supporting or getting in the way of strategy execution, as well as the levers that they can use to drive rapid culture change.

Culture-Strategy Fit®

Culture-Strategy Fit Inc. is a leading culture and executive leadership consulting firm conducting groundbreaking work in leveraging culture to drive strategy and performance. It’s suite of culture surveys and culture alignment tools are used by market-leading organizations around the world.

Contact Us

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The Amplifying Effect of Leaders on Company Culture

Role of Leaders on Company Culture

Leadership is the primary driving force behind company culture. In a thoughtful piece for the Harvard Business Review, Jim Whitehurst, the CEO of Red Hat, one of the leading providers of enterprise IT products and solutions, argues that changing a company’s culture isn’t easy, but involves changing how the employees of that company behave and think. “Culture,” he argues, “is a learned behavior, not a by-product of operations.”

Leaders Shape Company Culture

Leaders play an integral role in this process, influencing company culture through their own words and actions. As Whitehurst puts it, if you want to create an “innovate” culture, you can’t simply decree “go innovate!” It is the combined product of embraced behaviors of the entire corporation from the top down.

Companies like Amazon are excellent examples of creating a thriving culture of innovation.  They have implemented an organizational model where employees aren’t afraid to fail. Jeff Bezos, Amazon’s founder, and CEO has instilled a core-belief of innovation and risk-taking amongst his employees. Bezos has stated if his employees have a one-in-ten chance of making a one-hundred-fold return on an investment, they should make that bet every time. This acceptance – and even embracing – of failure has promoted the innovate culture that continues to drive Amazon today.

What Can Leaders Do to Enact Change?

When it comes to driving culture change, leaders play a critical role. This begins with using their behavior to set the tone for what’s acceptable within a company. This is especially true for start-ups, such as Amazon. “The moment you found a company, culture comes into the conversation,” says Lisa O’Keefe, Senior Advisor of Talent and Engineering Culture at Pritzer Venture Capital. The Management and Culturemore that leaders can share a company’s core values, the more likely that according to O’Keefe they will “become a reality and not just these random words uttered without meeting or random quotes on a wall.” The key according to Nancie Evans, VP Client Solutions at Culture-Strategy Fit is to be authentic while at the same time living the values consistently day in and day out…no exceptions and no excuses!

Enacting change, or instilling values, can only occur with a proactive drive from the top. By identifying and consistently acting in a way that makes your core beliefs and aspirations real, it is possible to create genuine change in an organization. Taking a vested interest in helping employees grow and thrive, for example, can create more motivated employees and boost production. This investment in the development of “human capital” goes a long way towards creating a culture of engagement, inspiring all within its structure and forming a discernable company ethos.

Similarly, as more leaders realize that their employees can provide valuable insights into their corporate culture, they can encourage employees to become an ambassador for their brand through social media channels. This creates not only publicity for the brand which helps to attract new talent, as well as a sense of solidarity and ownership in employees but also has the benefit of increasing the authenticity of social media posts.

Inspiring cultural change can seem like a daunting task, but it doesn’t have to be. If you need help defining or improving your business’s culture, check out some of Culture-Strategy Fit’s leading-edge cultural products and services, or give us a call today at 1-800-976-1600 for a free consultation.

 

 


 

Where to Next for the CEO & Culture?

where to next for the CEO and company culture

A recent article in BOF, How Gucci’s Company Culture Fuels Business Success, about how the CEO of the company, Marco Bizzarri, has used culture to drive an impressive business turnaround speaks clearly to what every CEO needs to be doing about culture in 2018.

Every CEO needs to be wading deeply into their company’s culture and shaping it to deliver purpose, strategy, and brand. At the same time, they need to protect the reputation and long-term success. To Bizzarri, culture is a business imperative that needs active CEO leadership and intervention. As he states in closing the article, “I think that the old way of managing a company is finished, especially for CEO’s who are used to working in the same way. We are human beings, we tend not to innovate. We tend to protect what we were doing in the past.”

So, what exactly does this article describe so effectively? What do CEOs need to be doing about culture in 2018? We’re glad you asked. CEO’s creating a healthy and successful company culture will:

1) Identify the behaviors that underpin agility, innovation, and high performance

Make sure that these behaviors are consistently demonstrated by everyone – no exceptions, no excuses. Bizzarri talks about attracting the right people. This is futile if those people enter an environment where the company values and culture are only demonstrated by some. He clearly calls upon everyone, from his newest hire to his senior C Suite executives, to demonstrate the key behaviors Gucci wants as part of its future.

Bizzarri speaks to what some of these valued behaviors are: respect, collaboration, transparency, creativity, and risk-taking. These are the foundation for company-wide agility, innovation, and high performance.

Every CEO in 2018 needs to be explicit about the specific behaviors needed across the organization. This includes foundational behaviors that strengthen productivity and manage risk (respect, collaboration, agility) and strategic behaviors that ensure a successful future (innovation, customer experience).

2) Lead by Example

Too often top leaders define a desired culture, talk about it, even hire for it, but then allow top performers to violate that culture. This is a difficult struggle that requires courage, especially when quarterly results hinge on this performer’s output.

A top performer may drive brand vibe or customer and investor confidence. Allowing violations of values erodes the underlying robustness and agility of the organization. More to the point, it creates significant risks to reputation and viability. Take one look at the numerous Entertainment and Media scandals of the past several months for abundant proof.

As Bizzarri says, “You need to show that you believe in that and that you [remove] all the people who do not follow this kind of respect you want to create in the company.”

CEOs should lead their company culture by example

3) Make it an Ongoing Activity

Bizzarri states, “You need to show on a daily basis that you really believe in these values.” This requires tireless vigilance, especially at the level of senior leaders. These are the individuals who set the standard for what is acceptable behavior. Messages about culture ripple throughout the organization daily. CEOs need to make sure they are the right ones.

We were part of a meeting at a Retail organization recently. In this meeting, a Division President and his GMs paused for a short time to allow Marketing to demonstrate a potential design for new uniforms. Two male employees demonstrated male uniforms and jackets. As the female Marketing Director took off the new windbreaker to reveal the female uniform, a sound was heard across the room.

This sound seemed to suggest that this woman looked good in the uniform more than the uniform was a good selection. The senior leader asked for a break and immediately pulled his team into a side room. He asked each person what had happened in the room and what each of them thought he or she needed to do about. Accountability was individual and collective. Every leader returned and apologized to the Marketing Director.

More importantly than making the situation right, this was treated as another learning experience for the various leaders. They were able to collectively reflect on how their behaviors were received by others, and how they could better create a safe and inclusive environment.

4) Shift Organization Practices

Bizzarri describes how he has intervened to shift some of Gucci’s practices to adapt to the external customer change of a more Millennial market. This is a perfect example of adaptation to a complex, dynamic marketplace where traditional ways of managing a business no longer work. In 2018, every CEO needs to be searching out practices that aren’t aligned to the desired culture. They need to switch or realign these practices in order to deliver strategic goals and growth.

Gucci’s substantial turnaround may be due to its CEOs willingness to break with traditional routines and search for new ones. The examples of changes Bizzarri talks about are instructive:

  • A Shadow Comex – a shadow team of younger employees providing input to the executive committee
  • Resourcing of talent and ideas from external talent sources around the world, rather than persisting in traditional practices
  • Use of an off-site meeting to pull influential people together to understand how to work together in new ways
  • Decision making based on expert knowledge versus hierarchical position

Each of these builds on current culture strengths while creating new and adaptive approaches to working together.

Every organization operates using four kinds of practices:

  • Managing – planning, financial management, resource management, risk management, etc.
  • Operating – what the organization does to deliver products and services
  • Social – the way people work together
  • Organizational Learning – how the organization improves and adapts

New CEOs often have the vision to spot where changing a few practices can shape the culture. A perfect example of this was when Alan Mullaly took over at Ford. Sometimes, CEOs who have had a long, successful career need help.

One such CEO brought 180 global leaders together to focus on cross-boundary collaboration as a strategic culture priority. The CEO then explored with them what needed to be different. It became painfully apparent that what had brought them success in the past was not working anymore. Deep insights set the stage for redesigning several Managing Practices.

measure your company's culture progress

5) Measure Your Progress

One of the most difficult challenges for CEOs is understanding the reality of the current culture. This includes how the company operates and where they should pay attention.

Organizations are complex, with culture strengths that can contribute to strategy or undermine it. They have culture weaknesses that may create vulnerability and risk. Subcultures within departments, divisions, professions, and generations all need to be understood so leaders know what needs attention.

In 2018, CEOs need to be asking how culture will be measured in their company. They need to:

  • Look broadly at culture to understand its foundation and how strong and resilient it is for change
  • Understand the unique culture DNA that needs to be valued and leveraged
  • Track where and how strategy is being supported by changes to culture.

This means more than measuring Engagement, Compliance, or Quality. All are important. They’re the parts of the elephant if we think of the old metaphor, but not a cohesive picture of culture and its impact on future success.

In 2018, CEOs need to wrestle with their culture measurement system and make sure it is feeding important data for action up, down, and across the organization.

Gucci is experiencing its strongest period of financial growth in 20 years with 20 consecutive quarters of revenue growth in a slowing market. This means it’s achieving not just organic growth, but also taking market share from its competitors. Bizzarri has made clear choices and responded with creativity, persistence, and courage to shape the business and its culture for competitive success.

In 2018, CEOs still need to worry about strategy and transformation, about risk and reputation, about brand and engagement, but they need to step up their focus on culture on a broader and deeper level if they want to protect the organization and survive an increasingly complex and dynamic world.