Culture by Default or by Design?
by Chris Edmonds and Bob Glaser
 
Every organization has its own culture. Despite its constant presence, culture can be difficult to describe. Yet its impact can mean the difference between success and failure for an organization, and it should be designed accordingly.
 
Leaders today are faced with difficult challenges. The U.S. and the world are attempting to climb out of the worst recession since the Great Depression. In this turmoil, it is imperative for leaders to examine their organization's culture and intentionally shape it to create competitive advantage.
 
In a February 2009 Fortune magazine article, Jim Collins said, "In times of great duress, tumult, and uncertainty, you have to have moorings. Companies like P&G, GE, J&J, and IBM have an incredible fabric of values, of underlying ideals or principles that explained why it was important that they existed. The more challenged you are, the more you have to have your values. You need to preserve them consistently over time." Values are one of the primary vehicles leaders can use to embed desired behavioral norms in an organization.
 
As Dr. Phil is prone to ask as he challenges people to face their behavioral issues during his prime-time television show, "So, how is that working for you?" We can ask the same question of organizational leaders today - how is your organization's culture working for you? How is it working for your employees? The customer? In other words, does the corporate culture drive the behavior of all members in ways that will best serve the organization and its customers?
 
If your response to this question is "I don't know," "I am not sure," or "maybe not," then what are you doing about it?
 
Culture can be intentionally designed and promulgated throughout the organization via a thoughtful process that determines, communicates and reinforces the behaviors that define a good corporate citizen. Further, the process can produce measurable impact on key performance results.
 
What Is Culture and Why Pay Attention?
 
Look closely at the operations of any high-performing organization, and a strong and distinct culture is likely the backbone. Yet culture can be a slippery concept to describe. Essentially, it is the context in which all organizational practices exist. It is the organization's personality - "how things are done around here." An organization's culture could refer to the values, attitudes, beliefs, behaviors and practices of its members.
 
Most members of an organization find it difficult to describe their company's culture because they are so immersed in it. They have not thought about the unique elements, symbols, rituals, stories, events and demonstrated behaviors that make their culture what it is.
 
New members of an organization often learn about the culture the hard way, by bumping into it - literally and figuratively - as they attempt to navigate their way through it. Experienced members are quick to correct the newcomers and educate them about expected behaviors.
 
Leaders begin to consider a culture change when something in their organization is broken and performance results are not acceptable or sustainable. It may be a single incident that raises eyebrows - or requires a costly recovery - or patterns of behavior that demonstrate a low threshold of trust, respect and confidence across the organization. Perhaps a series of low scores on employee morale surveys tells leaders the organization is less than healthy.
 
How to Lead Cultural Transformation
 
A high-performing, values-based culture has a foundation of clear performance expectations, behaviorally defined values and accountability for demonstrating both. Following a proven process helps senior leaders identify gaps that exist in their organization's current culture and take steps to turn their cultural vision into reality.
 
During the last decade, we've seen consistent positive results when the four critical steps described below are followed - and inconsistent results when they are not.
 
1. Discovery:
Honest discovery creates a snapshot of the current organizational culture. Interviews with senior leaders help clarify expected performance outcomes, the degree of values clarity, the degree of employee passion that exists, and what accountability systems are in place to ensure people meet performance expectations and that their behavior matches the organization's desired values.
 
Interview analysis compares the current organization's cultural elements with the best practices of high-performing, values-aligned cultures. A thorough discovery process identifies the organization's issues and gaps, and poses recommendations for closing those gaps.
 
For example, most organizations do not define their desired values in measurable, observable, behavioral terms. Without behavioral definitions, staff members don't know what a good corporate citizen looks like.
 
2. Immersion:
Immersing change agents in best practices provides organizational leaders a thorough exposure to the best practices of high-performing, values-aligned cultures. Senior leaders must be the champions of the change initiative; their demonstrated commitment to modeling these best practices builds a foundation for the desired culture.
 
An organization will need to dedicate a few days to orient senior leaders in best practices, highlighting how their organization fares on its culture assessment. During this orientation, leaders should learn the elements of the culture change process, identify consensus issues to address and decide whether to move forward with the initiative.
 
One assessment item that generates a great deal of discussion is "our work environment fosters trust among organization members." Senior leaders typically find some areas of their organization do foster trust while others do not. A number of organizational practices might need to be refined to address this gap, such as conflicting incentives, self-serving leadership behaviors and tacit approval of "I win, you lose" between employees.
 
At this point, senior leaders must agree on a process to formalize the organization's new vision, purpose and values. They must decide how to manage performance with greater discipline, with clear goal agreements and accountability. They must also manage values with greater discipline, describing the specific desired behaviors and how people will be held accountable for demonstrating values. They must develop a communication plan that clearly describes the reasons for the change initiatives and fully explains the desired values and behaviors. They must invite staff members to provide thoughts and insights as the new organizational vision, purpose and values are developed.
 
As senior leaders focus on these action steps over the following months, additional orientation sessions should cascade throughout the management hierarchy. In these sessions, managers assess how their functional teams operate compared to best practices. Managers offer feedback on the initial work done by the senior leadership team. Managers' action plans typically are more tactical and day to day in nature than those of senior leaders, which are usually more focused on organization-wide strategies.
 
3. Alignment:
This next phase allows the re-engineering of organizational structures and systems to be consistent with the desired culture. Without this step, it's impossible for members of an organization to walk the talk and be held accountable for desired changes. All staff members must understand what's expected of them in terms of specific performance and valued behaviors. Only after these expectations have been defined and agreed on can coaching, celebrating or redirecting occur.
 
The senior leadership team should identify key metrics for the culture change initiative and share them with organization members. Metrics often include performance gains, efficiency, growth and employee morale or passion. These metrics need to be measured regularly with the results published throughout the organization.
 
Systems tweaks occur to ensure staff members deliver on performance expectations and demonstrate desired values. Competing systems and procedures frustrate staff, reduce employee passion and create inferior products and services.
 
Once the values and behaviors have been shared, accountability systems are created and tested. The most effective tool to determine values accountability is a customized employee survey that measures demonstration of the organization's defined valued behaviors.
 
Senior leadership team members then analyze the results for gaps in values alignment and develop tactical plans to address the gaps quickly. Employees might identify gaps in systems and procedures and provide insights into specific supervisors or managers who may not consistently demonstrate the desired valued behaviors. It is of the utmost importance to share the survey results, at least in summary form, to coach leaders on how to refine behavior and to fix broken systems as soon as possible after the survey is completed.
 
To stay in touch with employee perceptions, survey the employee community every six months. After each round, a summary of successes and gaps should be published and staff members should be made aware of what is being done to address those gaps.
 
The final element of creating alignment is orienting front-line staff to the culture change process. Typically, intact teams experience modular sessions lasting two hours each. These sessions allow front-line teams to clarify and formalize their team's purpose and to refine the organization's values into team norms that are relevant to their work and customers.
 
4. Refinement:
The culture refinement process is a senior leadership team project that never ends. Senior leaders must continue to refine systems and policies - and at times even reorient managers and staff members - to reinforce desired behavior and values. Survey data analysis and monitoring of key metrics continues, ideally featuring grand celebrations of accomplishments. The senior leadership team may discover the need for additional skill building for leaders and team members, building self-directed work teams, for example, to keep the culture change alive and well. New employees are oriented to the newly clarified purpose, values and performance expectations.
 
It is likely that organizational values and valued behaviors will need refinement over time. As talent leaders experience how valued behaviors are embraced or tested, tweaking will help ensure the day-to-day culture continues to reflect the desired vision.
 
 
[About the Authors: Chris Edmonds and Bob Glaser are senior consulting partners with The Ken Blanchard Cos. and co-authors of Leading at a Higher Level.]