Monday, June 25, 2012

Embedding Change in Your Firm's Culture

Corporate culture is defined by the shared values and behavioral norms that determine how things get done within an organization. It's influence is pervasive, yet companies often attempt to change some aspect of their operations without considering the role of culture. That's typically a recipe for failure.

If you want to understand a firm's culture, don't look at what is written in terms of values, policies, procedures, or strategy. Look at behavior. Listen to what is said in conversation. See which metrics are emphasized. Culture is always expressed by what people do, and at a deeper level, by the factors that influence their behavior.

That's why change (in what people do) must always align with culture (what influences what they do). But most change efforts I've witnessed failed to connect the two and predictably fell short. Making the connection must go in one of two directions: (1) fitting the change to the current culture or (2) changing the culture to accommodate the change. 

Option number one is easier, although it may constrain making the depth of change that is needed. Kotter artfully describes this approach as endeavoring "to graft the new practices onto old roots while killing off the inconsistent pieces." To do this successfully, of course, you need to understand your culture to gauge how compatible the new practices will be. Most firms, however, have never really assessed their culture. 

Option number two is more difficult, but may be necessary--such as when severe marketplace changes force a radical rethinking of how you conduct your business. Kotter points out that culture change should not be a starting place for transforming practices, but the result of establishing new patterns of behavior and new ways of reinforcing those behaviors. In large part, culture is changed through experiences rather than by directive.

A few strategies for anchoring change in your corporate culture, with emphasis on the second option: 

Capitalize on your incremental success. Kotter found that new approaches tend to settle into the culture only after employees see that they work and are superior to the old methods. That's why you want to establish interim milestones that can be reached quickly and then share the positive results with employees (even in the face of inevitable setbacks).

Don't assume that people will simply notice. Keep in mind that many employees will enter the change process with anxiety or skepticism. They will be more prone to see shortcomings than successes. So you need to counter with whatever evidence you can find that the change is producing desirable outcomes. It helps, naturally, if you are appropriately measuring results. 

Talk it up. Conversation and stories play an important role in shaping culture. That's because what we most talk about reflects what we most care about. If I spent a few days in your office, I could learn much about your culture based solely on what I heard in conversation. So if you want to change the culture, you need to also take steps to change the conversation.

Some ideas: Open every internal meeting or conference call with a tip or comment related to the change (e.g., how "safety minutes" or "quality minutes" are part of the routine in many firms). Share specific stories about how the change is working in your firm or in other firms that have already made a similar change. Use multiple channels to get the word out. Be sure your leaders, in particular, are regularly talking about the change.

Just as what people most talk about reveals what most matters to them, I believe that the more people talk about something the more it will matter to them. That in turn shapes culture that influences behavior. So talk it up.  

Remember culture is ultimately defined locally. While we talk about "corporate" culture and recognize that many national and international companies have succeeded in creating a distinctive culture, in a practical sense culture is defined at the local level. Since culture is learned primarily by experience, those reinforcing experiences must be manifested where most employees live--the local office.

This obviously adds to the complexity of culture change. But the challenge is by no means insurmountable. If your firm has multiple offices, corporate leaders should focus on helping local leaders implement the change and the corresponding shift in culture. Equip local leaders with the tools and support they need to proceed in a relatively consistent manner across the organization. Have common talking points. Communicate with them regularly. Track local metrics. Stay involved with all offices. 

Lead by example. Effective leaders at all levels enable change and cultural alignment to happen. They not only talk about it but exemplify it by their own actions. That's the topic of my next post, the last in this series on corporate change. Hope you're finding this helpful.

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