Culture Transformation

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True culture transformation requires more than a cosmetic corporate make-over. How can companies re-align culture and make change stick?

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Culture Transformation

  1. 1. 1Sustaining culture changeTrue culture transformation requires more than a cosmetic corporate make-over.How can companies re-align culture and make change stick?Culture means businessThe concept of organizational culture is highly Firstly, culture is challenging to grasp as it is anappealing to business leaders. Indeed, many inherently intangible issue. Secondly, changing theglobally admired companies credit their success to behavior of one person is already difficult enough,their unique organization cultures. let alone trying to sustain new behaviors throughout an entire organization. Finally, attempts to transformRepresenting ‘how things are done’, organizational culture are often met with cynicism – the culturecultures are important drivers of employee behavior, snaps back to old habits if initial changes are notparticularly when employees must be relied upon to sustained.act on their own initiative in a way that is consistentwith the company’s objectives, culture and values. Traditionally, executives look to their HR department and their tools – from reward toBut managing and/or transforming organizational training – for help to change culture. But evenculture is not for the faint-of-heart. Nor does it experienced HR professionals get frustrated. Themerely involve a cosmetic sleight-of-hand. Efforts to reason lies in the fact that successful transformationchange organizational culture often face three does not depend on the number of tools used, butsignificant obstacles. rather how deeply the efforts penetrate.©2012 Hay Group. All rights reserved www.haygroup.com
  2. 2. 2Sustaining culture change More than skin deep Driving culture change Most HR interventions attempt to transform culture Hay Group defines culture as “the by targeting behavior change directly. We are combination of organizational inspiration and familiar with them: forming teams to try to increase purpose, motives and beliefs of individuals, collaboration, changing performance management and the norms and patterns of interactions of and reward systems to increase accountability, or groups, which provides the meaning to drive establishing written codes of conduct to enforce leaders’ and employees’ behaviors and results.” transparency in business practices. In short, culture is the fabric that provides meaning for people in their work and their However, these change efforts typically do not have lives. long-lasting impact since the underlying drivers of behavior are untouched, and people eventually Based on our research and a historical review revert to their old habits. of culture studies1, we view culture as the unique combination of phenomena that What is needed to sustain change is an approach operate at three levels [Figure 2]: that addresses the deeper drivers of behavior, including shared purpose and meaning, individual • Individual – motives and values beliefs and values [Figure 1]. • Social – relationships and networks • Organizational – purpose and meaning The underlying aspects of culture can serve as either barriers or enablers to culture transformation. They • Motives and values are not directly observable and are challenging to understand and manipulate. However the good Personal motives and values refer to the core news is that the sustainability of the change is goal-states, wants and needs that individuals directly proportional to the depth of the change typically strive to reach and to satisfy. effort. Hence, the key is to target change efforts at the underlying drivers of culture. Figure 1: The challenge of culture change©2012 Hay Group. All rights reserved
  3. 3. 3 Culture: three interdependent webs of meaningFigure 2: The three dimensions of culture Fields of anthropology and philosophy Organization  The collective and symbolic purpose and fabric of meaning in terms of which people interpret their meaning experience and guide their action Point of Field of sociology shared Field of psychology  The form that action meaning  The core goal , wants, typically takes and needs that people People The pattern of social and Individuals’ usually strive to reach and  relationships satisfy power interaction motives and and values networksPsychological approaches to culture emphasize the socialization processes. For instance, itshared and deeply-learned skills, habits of thinking, manifests itself in such advice given to newand mental models employed by individuals in an employees to ‘keep your head down, don’torganization. create conflicts, and you will be successful.’David McClelland’s social motives, which are Hence, culture is a social phenomenoncharacteristics of individuals, play a role in defining observed in the behavioral patterns that ariseorganizational culture. For example, firms when people interact: the language they use,populated largely by individuals selected for a strong the customs and traditions that evolve, and theneed for achievement will emphasize the rituals they employ in a wide variety ofaccomplishment of short-term and tangible goals, situations. If you ask people about theiroften at the expense of longer-term aspirations. organization’s culture, they may answer in terms of relationships, for example: ‘We are• Relationships and networks very competitive,’ ‘this is a command-and-The sociological and social psychological approaches control organization,’ or ‘we work as oneemphasize group norms as a manifestation of team.’culture. Norms are the implicit standards and valuesthat evolve in working groups, and are reflected inthe rules of the game, often most visible in1 Hay Group conducted an extensive review of culture research including: Beyer (1987), Deal and Kennedy (1982),Douglas (1986), Gagliardi (1990), Geertz (1973), Goffman (1959, 1967), Hofstede (1984), Homans (1950), Jones,Moore, and Snyder (1988), Pondy, Frost, Morgan, and Dandridge (1983), Smircich (1983), Van Maanen (1976) www.haygroup.com
  4. 4. 4Sustaining culture change • Purpose and meaning Shared meanings are created by group members as they interact with their environment. They derive a sense of purpose, inspiration, and success from their choices. Purpose and meaning also are shaped by the values and formal philosophy espoused by leaders, and the publicly-announced principles and broad policies that guide action. These meanings often are represented in a culture through the metaphors and integrating symbols circulating in use within the community. Simply put, organization purpose can be elicited when you ask employees, ‘Why does this company exist?’ Some responses could include: ‘to make money for its shareholders,’ ‘to improve the lives of our customers,’ or ‘to give back to the community.’ Creating alignment At the intersection of the three dimensions of culture is ‘shared meaning.’ By focusing on this area, companies have a powerful lever to align culture that touches the individual, group and organization, thus creating a high-performing culture. One of the manifestations of shared meaning can be found in the “corporate narrative” that And it is easy to see why. Employees are most likely employees recount to each other and which to be deeply engaged in their work and committed illustrates the desired corporate values. to the organization when there is alignment between their individual motives and values, the way that relationships and networks operate in the For instance, many people are familiar with organization, and the overall purpose of the the story of how P&G’s A.G. Lafley created business. a culture of innovation and collaboration focused on the consumer, which included many symbolic changes that had real impact: Conversely, if any of the dimensions are misaligned, dismantling the insular corporate executive we will see employees who are less motivated and offices and replacing them with training rooms committed. The collective behaviors of groups may and open space, and changing conference even work at cross-purposes, leading to long-term room tables from rectangular to round to decrease in both performance and reduce hierarchy. productivity.©2012 Hay Group. All rights reserved
  5. 5. 5New game, new rulesChanging culture is a transformational journey. It’s Often the most impactful changes are focusedcertainly not an event. It takes time and self- on realigning symbols and artifacts – theawareness. Moreover, individuals and organizations intangible levers of change – coupled withcannot change if they cannot learn. Hence culture leadership acting as role models of the newtransformation is really a journey of building culture.awareness and alignment between where you aspireto be strategically and the three dimensions of One of the biggest challenges in mostculture. organizations is that leadership behaviors, management systems, and organizationalThe starting point is to understand the strategic symbols send conflicting messages torequirements of your organization: what type of employees. For example, a company toutsculture is needed to deliver the short- and long-term itself as a ‘caring employer’ but employees areresults you desire? Leaders need to define the types expected to report for work even when theyof behaviors that will be required to help the are ill. Hence, it is critical to make sure thatorganization be successful. Then, they need to consistent messages are sent to reinforce theprioritize the change levers that will produce the behaviors that are needed at the individual,most impactful culture change and focus on team, and organization levels.systematically implementing those catalysts forchange [see Figure 3]. Figure 3: How to transform and align culture              1 www.haygroup.com
  6. 6. 6 Sustaining culture change Leading culture transformation Another mistake that many organizations make is As senior executives lead their organizations, trying to change too many things at once, often they are also – whether they like it or not – the focusing on communications, training, and internal champions of culture. Shaping culture is marketing campaigns – which can be challenging, yet extremely powerful, since it overwhelming, superficial, and short-lived. It is also touches the heart of what drives people and important to identify the positive elements of the performance. The best leaders of culture current culture that should be kept and reinforced display reflective or intuitive awareness of in the future. It is unlikely that an organization what works and what does not work in their needs to undertake a complete change of all the organizations. They model the right attitudes, attributes of its culture. Therefore, the use appropriate management styles, and send transformation should focus just on the elements consistent messages to the organization. that need to change or be realigned.The content in this report is provided solely for informational purposes. This report does not establish any client, advisory, fiduciary or professional relationship between Hay Group and you.Neither Hay Group nor any other person is, in connection with this report, engaged in rendering accounting, advisory, auditing, consulting, legal, tax or other professional services or advice. ©2012 Hay Group. All rights reserved
  7. 7. 7When an organization’s culture needs to Culture is extremely powerful when itsignificantly evolve or adapt to the environment, systematically and skillfully translates aneffective leaders are the first ones to make the effort organization’s collective and individual beliefsto demonstrate new behaviors, acknowledge when into consistent and effective behaviors.they fail, and show resilience to try again. Culturetransformation requires leaders that are engaged in You can be successful if you follow thelearning, risk-taking and re-affirming the behaviors principles of culture transformation we havethat are expected in an organization. outlined in this paper:Leading culture transformation requires the 99Go ‘deep’ to drive and sustain behaviorwillingness to ‘go deep’ within oneself and the changeorganization. Helping others to change their beliefs 99Align organizational culture to the businessand their behaviors requires a clear sense of self, strategyemotional maturity, and determination to make thejourney over several months (and often years). 99Create shared meaning at the individual, social, and organizational levelsAchieving successful change 99Identify the key levers to help implement culture change 99Demonstrate self-awareness andCulture transformation is a journey that will commitment to lead the transformationchallenge the most resilient and experiencedexecutives and their leadership teams. But that doesnot mean that it is to be avoided. Effectively Culture transformation is a journey withoutexecuted, it is a rewarding experience that leads to a final destination. If undertaken in the righthighly-motivated employees, satisfied customers, way, it is a process of continuous improvementand outstanding business results. and adaptation that will lead to increased employee engagement and improved business performance for everyone involved. About Hay Group’s global R&D centre for strategy execution Hay Group’s global R&D centre for strategy execution researches best practices in strategy execution globally. Based in Singapore, the centre provides a unique East-West perspective for business leaders all over the world. Our research helps provide insightful advice to executives looking to build effective organizations for the future. Contact Jeff Shiraki Vice-president, Hay Group E| jeff.shiraki@haygroup.com Andreas Raharso, Ph.D Director, Global R&D centre for strategy execution, Hay Group E| andreas.raharso@haygroup.com Agnes Long Research associate, Global R&D centre for strategy execution, Hay Group E| agnes.long@haygroup.com Hay Group’s Jean-Marc Laouchez, Katie Lemaire and Ruth Wageman also contributed on this paper. www.haygroup.com
  8. 8. Africa Frankfurt Middle EastCape Town Glasgow DubaiJohannesburg Helsinki RiyadhPretoria Istanbul Kiev North AmericaAsia Lille AtlantaBangkok Lisbon BostonBeijing London CalgaryHo Chi Minh City Madrid ChicagoHong Kong Manchester DallasJakarta Milan EdmontonKuala Lumpur Moscow HalifaxMumbai Oslo Kansas CityNew Delhi Paris Los AngelesSeoul Prague MontrealShanghai Rome New York MetroShenzhen Stockholm OttawaSingapore Strasbourg PhiladelphiaTokyo Vienna Regina Vilnius San FranciscoEurope Warsaw TorontoAmsterdam Zeist VancouverAthens Zurich Washington DC MetroBarcelonaBerlin Latin America PacificBilbao Bogotá AucklandBirmingham Buenos Aires BrisbaneBratislava Caracas MelbourneBrussels Lima PerthBucharest Mexico City SydneyBudapest San José WellingtonDublin SantiagoEnschede São PauloHay Group is a global management consulting firm that works withleaders to transform strategy into reality. We develop talent, organizepeople to be more effective and motivate them to perform at theirbest. Our focus is on making change happen and helping peopleand organizations realize their potential.We have over 2600 employees working in 85 offices in 48 countries.For more information please contact your local office throughwww.haygroup.com

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