Authored by: Dave Gray, Entrepreneur, Author, Consultant and Founder of XPLANE
I’ve never met a senior leader who didn’t acknowledge the importance of culture. We all agree it is vital. Numerous examples in multiple domains — not just business but in war, sports, and social change, have demonstrated over and over that culture is a more powerful force-multiplier than money, power or superior technology.
Superior business culture is the most-often cited factor in business success stories, like Google, Southwest Air, and Nordstrom. Toxic or stagnant culture is most-often blamed for the catastrophic downfall of companies like Kodak, Nokia, and Motorola. Jack Welch and Lou Gerstner, who presided over two of the most effective comebacks in corporate history (GE and IBM, respectively), both cited culture as one of their top priorities.
Companies are made out of people, after all, and the most successful companies make people, and culture, a top strategic priority. And yet as leaders we struggle to get a grip on culture. It’s slippery, difficult to name, define, measure or get any kind of traction on.
Business volatility requires business to adapt.
We are entering a new business era characterized by high levels of volatility, uncertainty and disruption. There is no organization that is not being affected by these winds of change. Established companies are being disrupted by newcomers with astonishing regularity so common it now has a name — “Getting Netflixed” — a reference to the way Netflix outfoxed and outmaneuvered Blockbuster by redefining and digitizing the customer experience. What Netflix did to video rentals, companies like AirBnB, Uber, Spotify and Zipcar are doing to hospitality, transportation, music and car rentals.
When the business environment is evolving this rapidly, culture must keep up.
Culture change is also difficult. Changing culture requires changing habits, behaviors, and routines that have solidified over decades. To imagine the scope of a culture change initiative, just imaging 5,000 people trying to quit smoking at the same time. It’s incredibly hard, and the risk of failure is high. Even success does not guarantee you will be appreciated. Jack Welch and Lou Gerstner are controversial figures to this day.
Three culture change challenges.
Leaders interested in enabling culture change face three problems:
First, getting a grip on the current culture by identifying the direct links between business results, behavior, and organizational enablers like incentives, work systems, and management practices.
Second, imagining and designing the future culture, including not just the desired business results and behaviors, but the incentives, systems, habits and practices which will enable the new culture to emerge.
Third, the hard work of shifting deeply embedded, entrenched habits and behaviors. For leaders this is especially difficult, because they will necessarily be learning and acting out new behaviors while they are also on display, watched by everyone. Not to mention that culture change, by nature, often occurs in difficult business circumstances, within organizations that will certainly include many critics, cynics and skeptics.
Three steps to a new culture.
1. Diagnose your current culture.
The first step is to build a solid understanding of the culture you have today. Historically this has been a difficult undertaking, but today it is easier, due to the emergence of business design tools for rapidly diagnosing, describing and designing business strategies and systems.
Leading the charge for business design tools are two of the top 50 business thinkers in the world, Alex Osterwalder of Strategyzer and Yves Pigneur of the University of Lausanne, designers of the Business Model Canvas, which is used by more than 5 million people in organizations around the world.
The Culture Map: A business design tool.
Alex and Yves helped us develop a new tool for understanding and designing culture, called the Culture Map.
The Culture Map links business outcomes and behaviors with the enablers and blockers that are caused or influenced by managers.
Culture Mapping is a process that involves deep listening exercises designed to find the real underlying system behind the noise that masks many business realities.
2. Design your future culture.
This is a more difficult exercise than the current state diagnostic, because it takes not just the imagination to visualize a future state, but also the humility to be realistic about what can be achieved and how quickly it can happen.
A visual culture map depicting desired behaviors.
An important part of the design process is visualizing future behaviors in high-granularity detail, to eliminate as much doubt, uncertainty, and skepticism as possible.
We recommend that you develop a visual culture map depicting the culture you aspire to, showing people exactly what you want them to do and say in the future you envision.
The description should be as clear, specific and detailed as possible.
If new behaviors are not clearly and visually articulated, the most likely outcome is that the old behaviors will simply continue: business as usual but with new names.
3. Do the hard work of following through.
True culture change is a difficult endeavor, not to be taken lightly. It can take up to three years for a new culture to take root.
We like to compare culture work to gardening. Designing the garden is the easy part. For your culture change efforts to succeed, you will need the patience and dedication of a gardener. Like a garden, a new culture will grow at its pace, not your pace. There is no way to speed up this kind of change.
People must first hear that you are committed to the change. Then, over time, they will closely observe your actions and ongoing behavior, looking for discrepancies and clues. Most people must overcome some cynicism and skepticism before they will believe that the change is real. From that point on, there is still much work to do in order for those changes in belief to become new habits, routines and behaviors.
Six best practices for driving cultural change.
Make culture a top priority.
When culture change is necessary, it must be a top priority for senior management. If there is one thing we have learned from more than 20 years working on organizational effectiveness and change initiatives, it is this:
In such cases, its highly likely that the organization’s strategies, and in some cases the company itself, will also fail.
Lead by example.
The tone for culture is set at the top. It is critically important and cannot be delegated. It must be lived and acted daily, in large and small ways. People may listen to what you say, but they also watch what you do. And if your actions don’t match your words, they follow the example that’s set by your actions.
Focus on one habit at a time.
We recommend that executives focus on no more than six key behaviors, and that they focus on these one at a time. For a period of three to six months, leaders focus on changing one key behavior, practicing it with each other and with employees, making the commitment privately and in public to make that a personal habit, and soliciting feedback from colleagues and employees.
Establish a rhythm and track progress.
The most effective tool we have seen for measuring cultural improvement over time is a simple employee survey, similar to what you see on Yelp or Amazon reviews. These surveys measure employees perceptions about behaviors, and in the world of culture, perception is reality.
Culture perceptions can be measured by frequent, simple, easy surveys.
Measure employee perceptions about the habit you are focusing on. Poll and review the numbers weekly.
Look at the numbers as part of your regular operational rhythm, such as weekly team meetings and status updates. Ask probing questions about what causes and influences those perceptions.
Track your progress over time. Talk about your culture survey results publicly and make them a topic of conversation throughout the company.
Plan for a short-term drop in performance.
Expect a “muddy middle”period, where people are shedding their old behaviors but have not yet embraced or learned the new ones. Performance will most likely drop during this period. This is where many culture change initiatives lose their resolve and snap back to old habits and routines.
Culture work takes time. The first habit is the hardest to break, and the most difficult days are the early days. As people begin to see progress and see that your actions match your words, resistance and skepticism will decrease and you will gain momentum over time.
With a strong commitment from leaders who are leading by personal example, asking the right questions, and tracking cultural performance over time, can make steady progress toward a revitalized culture.