Break on through

As we all pick up the pieces from the after effects of the GFC, organisations need to be aware of the unprecedented changes that are taking place. To respond to this challenge requires unprecedented thinking and results.

Margaret Wheatly, author of ‘Leadership and the New Science’ (1999), stated that “Most companies have at least a grasp on the ‘what’ of change. They want to be customer-focused, quality conscious, empowered, profit-making businesses. The ‘why’ is accounted for by global competition, customer demands and other external forces.

“That brings us to the actual “how” of change and the trail gets tougher from here on. The problem is, you’ve still got a lot of people out there who are convinced that they are just one DVD away from tranquillity. That all they have to do is get re-structuring right and then life is going to slow down. Well, it’s not going to.”

An organisational culture change process will require that the organisation critically examines the underlying assumptions and beliefs that people hold about the nature of work, the purpose of the organisation and the strategic challenges faced by your organisation.

What is organisational culture?

Organisational culture simply refers to what is important and valued in the organisation in relation to how managers manage, information is shared, conflicts are handled, teams cooperate, problems are dealt with and the work gets done.

Organisational culture is ubiquitous, like the ocean in which we swim, yet is not discernable. It touches everyone and impacts on all strategic, planning and operational practices. It is the hidden context that determines whether or not the organisation can become world class, competitive in a hyper competitive world and achieves its vision.

Why attend to organisational culture?

Research presented by the Harvard Business School’s Professors Kotter and Heskett, and Edgar Schein of MIT, provides a compelling argument for companies to manage meaningful long-term culture change. In a Harvard University study on organisational culture they found that companies that were successful in creating adaptive, performance cultures outperformed their competitors by a factor of 10 to 1 (Kotter and Heskett).

Evidence clearly indicates that most managers often fail to go beyond their initial reactions in order to critically examine the deeper concerns raised by culture, avoiding the time and tension associated with such work.

It is important to realise that for organisational transformation and merger situations to be successful, there must be widespread acceptance of the need for culture change at all levels. There must be a departure from old beliefs and habits and the invention of new and more powerful ways of working together on behalf of the organisation’s strategy and vision.

Low-performance cultures

Unhealthy or un-adaptive cultures are more common than healthy and adaptive cultures. Unhealthy organisational cultures share three critical characteristics. First, managers tend to be arrogant, behaving as if they have all the answers and rarely looking to staff or outside the firm for new and better ideas. Second, managers in these organisations tend to value themselves, their own immediate work groups and their own particular products and services more highly than anything else. Finally, these organisations tend to be highly bureaucratic, focusing excessively on procedures, stability and order.

People in an unhealthy culture tend to operate in ‘survival mode’, that is they engage in protective games, petty politics and turf battles. They refuse to take risks and be innovative out of fear of failure.

10 causes of an unhealthy culture

• Too much management and not enough leadership
• Management do not value or encourage leadership at all levels
• Management tend to stifle initiative and innovation
• Management do not deeply value customers, staff and shareholders
• Too much focus on bureaucracy and control
• Management and staff development is not continuous
• Management lacks strong strategic thinking skills
• Management becomes increasingly arrogant and complacent
• Coordination and integration is weak at all levels
• Senior management is not a cohesive team

Adaptive or performance cultures

Adaptive organisational cultures are characterised by two key elements. Firstly, managers pay close attention to all three critical constituents of their business: employees, shareholders and customers.

Secondly, leadership at each level of the management hierarchy is valued. People are encouraged to provide leadership and initiate change when needed in order to satisfy the legitimate interests of the above constituents.

The organisational behaviour theorist and consultant Ralph Kilman describes a performance culture as one that “entails risk-taking, trusting and a proactive approach to organisational as well as individual life”.

10 strategies to develop a high performance culture

• Management provides excellent leadership that builds engagement at all levels, encourages team work and models the desired values and behaviours
• Management generates a sense of urgency in regards to the need to change and succeed
• Management involves others in the exciting new vision and its inherent possibilities
• A growing group of managers who share and live the values of the organisation emerge. These values are modelled by management
• The organisation’s culture values and rewards individual and team learning and performance
• The culture also encourages inter-departmental cooperation and coordination
• Employees operate out of their own volition (engagement) and sense of responsibility rather than by coercion
• Communication is open, honest and straightforward at all levels of the organisation
• Employees have a line of sight from their contribution to the organisation’s vision and strategy
• There is an on-going commitment to organisational learning and insight in regards to internal processes, staff attitudes and ideas, competitive threats, the customer and the market place

Changing organisational culture is challenging because:

• Values need to be realigned
• Power dynamics and coalitions need to be addressed
• Reward systems ultimately must change
• There will always be resistance!

10 things to change your organisational culture

• Identify where you are now - what are the characteristics, current values and behaviours of your organisation
• Create an atmosphere of urgency and opportunity
• Develop and clarify the vision for the kind of organisation you need to create (and why)
• Define the kind of culture that is needed. Be clear on the values, principles and behaviours of the desired culture
• Engage others and involve at all levels to shape the cultural values and behaviours that are critical for success
• Communicate the vision widely and constantly reinforce
• Management will need to work through their own values, actions and practices that they want to inculcate
• It will be critical to empower others to act
• It will be important to achieve some quick but sustainable wins
• Demonstrate patience and persistence!

About the author

Dr Des Tubridy is a director of Quantum Management Indicators, specialists in employee engagement, organisation culture and customer satisfaction surveys.