Culture Change For Changing Times Family Firm Institute

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At the Family Firm Institute’s Global Conference held this past week, October 17-20 in Brussels, Belgium, I was privileged to deliver a speech and workshop on “Culture Change for Changing Times,” designed for family firms. The conference was well attended from around the globe by family firm leaders and those who consult, coach and provide professional guidance for family firms.

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  • How I developed this presentation:Work with family firms as firmsMarcalAtlantic Legal SupplyPrinting companyParagonRxBenjamin ObdykeMany in my speaking engagements and workshops, Vistage
  • ResearchU of Michigan had a marvelous tool, OCAI, began to see its value in helping clients understand culture today and what they might like it to be in the future.Of all those in the data base, not a one was a family firmHere in Netherlands, 20,000 not a single family firmWhy? Was there something of value here that family firms were missing, and might really need to help get past: OMG my father really wants to do something new? My brother in law knows it all, he’ll never change. Or my father and brothers are all entrepeneurs but we have grown to $30MM and we need to hire non-family members, and they won’t come—too loosey=goosey. Where’s the structure, rules?
  • The key to a better workplace is achieving balance between the structural and cultural forces at play. One of the great truisms of 21st-century workplaces is that change is relentless. As management experts observe, in a world of heightened risk and uncertainty, the expectation of constant workplace change almost becomes comforting. The downsizing, restructuring, mergers and acquisitions that so many Canadian employees have experienced firsthand are proof enough that change has become the norm. But something's wrong with this popular image of workplaces being incessantly remoulded, like silly putty in the hands of a six-year-old.Why does research show that most major organizational change initiatives fail to achieve their intended goals? What stands in the way of the changes needed to foster innovation and productivity or create the kind of healthy and fulfilling work environment that engages and retains employees?These questions raise the basic paradox of workplace change. To help unravel this paradox, think of workplace change in terms of yin and yang, with complementary but opposing forces in constant tension. These forces are structures and cultures, the hard and soft sides of every workplace.Structures are visible in organization charts, head counts, job classifications, information technology and rules about how work should be done.Culture is the organization as a community -- the workplace's social glue created by shared meanings of how life in the office, at the service counter or on the production line ought to be lived.So the paradox comes down to this: The more that organizations change their structures, the greater the need for supporting change in elements of culture.
  • Tell me about yours and how it is dealing with the new economic realities, new technology, changes in buying processes, Lets be the panel for today:No longer a patented productDistribution is changingInternet sales are stealing clients but competition is keenCost structures are pressing margins
  • Some others that might be urgent in your own world?
  • Stories to share that make this all come alive.Less about the tool that the problem to be solved.Is it hard to do—yes and noCan you do it yourself, sometimes, sometimes notWhen to use a hand.
  • Largest in the mid-westDoing it just the way the always haveFeet on the streetStanding by the car, the property, the stuff to sellBut recently, they had their “aha” moment. They sold a very large star trek figure online for $75,000. No feet on the street. No expense. Easy to sell and the e-bay auction did it all.
  • Sound great.But some things were not so great
  • What did he face:Nephew that came into his office in tears (I bet you might have had one of these). Talent young man, frustrated. Has to do what his father did to work his way up the organization. But he did everything differently and he had a college degree, and his father never went to college…Sister that thought she was the heir apparent, but the father chose the younger son—more experience, had been with P&G, she had none of that experience.A lot of family in jobs that they were ill-suited for but not able to move into ones they might thrive in.And the complexity and resiblity to all those families was not to be underestimated.
  • As management experts observe, in a world of heightened risk and uncertainty, the expectation of constant workplace change almost becomes comforting. The downsizing, restructuring, mergers and acquisitions that so many Canadian employees have experienced firsthand are proof enough that change has become the norm. This is very hard with our brains fighting change. It really is painful to change our beliefs about what is real. A story: took clients out to do anthropology. Hung out with their clients: distributors or manufacturers. Listened to what their stories were all about. Distributors told them that they had no growth strategies. How will they grow? Manufacturers said you are the experts get us ideas faster, and they said, but we build your batteries
  • As many in companies as in society. But the research has become very compelling that despite the diversity of ways of living, there are essentially four dominant types of corporate cultures.
  • How do we know what is right or wrong? What is “not working” mean?Is the anger at the brother-in-law about him as family or about his performance or that of the company?What about Marcal that finally went under bankruptcy reorganization-with 80 year old secretaries and very obedient sons.
  • What is this anyway that we are talking about. Only 4 dominant types of cultures, how so?Spend 15 minutes playing a game. That makes this come alive.As we do it—think about your own culture and yourself as you play your role there.
  • Take one minute and think about what you have in your hand. You are voting here. Give us a specific example not of the abstract but how you live it. Encourage break through innovation—great how?You emphasize short time to market—speed of production? Concept to development? Increasing productivity—how? Do you do this, your company?
  • See how the card game might work.
  • If you do this on line, What did your’s look like?This was a CEO of a company we were working with.
  • How to run a company without common shared beliefs about how to get things done.
  • Real issue here is the gap between what you are today, what you might think you should be more of tomorrow and what that will really be like—how do you become results or competitive? What if you are Julie and you need to be more “corporate” or controlling?
  • This is a hospital client of mine. we had over 65% of their 2500 employees and their board take the OCAI. Then we spent 5 days working with their 45 leaders/managers. First what were each of these culture types really all about and where did you need what? If we want to be more collaborative and innovative how do we do that and stay within our regulatory limitations?
  • If you are going to shift, what will you do more of and what will you do less of?
  • These are important but still a bit too abstract. So lets take two minutes and write down exactly what you might do to be able to increase employee suggestion. Or decrease the hierarchy by eliminating sign-offs for decisions? Maybe we are going to be a less punishing environment? Commodity trader example.
  • For Julie, at Catalytic Products, she had to stop being so customized and entrepreneurial if she was to hire new staff. And she had to get her Father to start to abide by rigorous standards of production and productivity. But the core essence of the company and its success was how it made each client feel very special, project was just built for them, unique,etc.
  • Culture Change For Changing Times Family Firm Institute

    1. 1. Family Firms Facing Changing Times? Time to Think About Culture Andrea J. Simon PhD Simon Associates Management Consultants© 2012
    2. 2. Pre-work• If you are planning on attending this session you might want to take the OCAI-Online at www.ocai-online.com to see what it is actually like. Bring along your graphs so we can discuss what they mean.• If you cannot or do not wish to take it ahead of time, please come and let us introduce you to the culture change process associated with the Organizational Culture Assessment Instrument (OCAI) and why it might help your company or organization, or your clients who are dealing with change.© 2012 2
    3. 3. What Could 1,000s of Companies Teach Family Firms?© 2012 3
    4. 4. Our Talk Today • Competing Values: Active Learning • Culture Change • What to do? Assess and Diagnose • Discuss tools for changing culture: ChangeMap™ Process© 2012 4
    5. 5. Change any Corporate Culture? • Business has stalled. • Times have changed. • Talent is ill-suited for the business. • When products and services are no longer relevant to the customer. • When growth comes in new markets.© 2012 5
    6. 6. For Family Firms?• Succession• Mismatch between family and jobs skills needed• Culture of the firm keeps talent in wrong jobs• Demands of the market challenging the vision of the family© 2012 6
    7. 7. A Short Story: Auction Business • Largest Auction Business in Mid-West • Founded by Grandfather • Three generations and 40 relatives of the family, 29 of whom are licensed real estate brokers© 2012 7
    8. 8. Very Successful Auctioneers© 2012 8
    9. 9. Cultural Challenge• “The company is also guided by family principles and integrity, something none of them take lightly.• “When you hire us, you hire our family, and we all have to live up to the long-term integrity of the family name.”• “It’s not taboo to have business that consists of a lot of relatives.”• “We embrace the strength of families.”© 2012 9
    10. 10. Why Change the Family Culture?• Son was brought back into the company.• What he brought back was a different way to “see, feel and think” about the business.• Times were changing, but the family running the company was still more focused on family than on who had what skills to do what kinds of jobs.© 2012 10
    11. 11. "It is a bad plan that admits of no modification.― — Publilius Syrus (First Century BC) Culture=Human BUT WHY SHOULD WE WORRY ABOUT OUR COMPANY’S CULTURE?© 2012 11
    12. 12. Culture: Makes us Human • Extraordinary Brains • Stand and Walk on Two Legs • Feel things and can Express or Share them • Symbols and Beliefs • Language(s) • These help us Live in Groups We call all of these our with shared behaviors and ways “CULTURE.” of getting things done.© 2012 12
    13. 13. So Many Different Realities• We sort reality to conform to our mind-map.• Perception is developed early.• Perception = Reality• To change is challenging© 2012 13
    14. 14. What you Believe is What you See© 2012 14
    15. 15. So Many Types of Cultures© 2012 15
    16. 16. Which one is Right for Me?• For Businesses, in General• For Family Firms, in Particular© 2012 16
    17. 17. Research is Compelling• Organizational change initiatives in last 30 years were: TQM, Down-sizing, Reengineering, and Lean/Six-Sigma.• Did they work?• But, in a survey of Fortune 500 companies: – Only 20% reported having achieved quality objectives – Over 40% indicated that they were a complete flop• Most successful were those where it was embedded in a culture change process.© 2012 17
    18. 18. What does Culture Do?• Highly successful firms have congruent cultures that: – Reduce uncertainties – Create a social order so people know what to expect – Create continuity and key values and norms – Create a collective identity and commitment – Express a vision of the future and energizes forward movement• But the wrong culture can take you down the wrong road. 18© 2012
    19. 19. Change, but to what?• Is mine fine?• Shall I adapt it to new times?• How do you change deeply embedded beliefs and values? Much less change behavior?• We don’t “do” culture. We live our culture.© 2012 19
    20. 20. The most successful businessman is the man who holds onto the old just as long as it is good, and grabs the new just as soon as it is better." — Robert P. Vanderpoel Can a Game Help? WHAT TYPE OF CULTURE ANYWAY?© 2012 20
    21. 21. Let’s Play a Game• Card Games are fun• Using the Competing Values Framework card game we are going to help you see, feel and think about culture with active learning.© 2012 21
    22. 22. Competing Values Framework• Simple exercise to understand what the four dominant types of cultures really mean.© 2012 22
    23. 23. Flexibility and Discretion CLAN ADHOCRACY Orientation: Collaborative Orientation: Creative Leader Type: Facilitator, Leader type: Innovator, Mentor, Team Builder Entrepreneur, Visionary Value Drivers: Commitment, Value Drivers: Innovative outputs, External Focus and Differentiation Communication, Development Transformation, Agility Internal Focus and Integration Theory of Effectiveness: Theory of effectiveness: Human Development and Innovativeness, vision, and new participation produce resources produce effectiveness effectiveness HIERARCHY MARKET Orientation: Controlling Orientation: Competing Leader Type: Coordinator Leader Type: Hard Driver, Monitor, Organizer Competitor, Producer Value Drivers: Efficiency, Value Driver: Market Share, Goal Timeliness, Consistency and Achievement, Profitability Uniformity Theory of Effectiveness: Theory of Effectiveness: Aggressively competing and Control and Efficiency with customer focus produce capable processes produce effectiveness effectiveness Stability and Control© 2012 23
    24. 24. What to do? ASSESSING A FAMILY FIRM’S CULTURE© 2012 24
    25. 25. The Process• Let me offer you an overview of the process we use: – Assess: OCAI – Diagnose: Picture – Envision: Picture the Future – ChangeMap™ : Map the Path 25© 2012
    26. 26. Assess: OCAI • Organizational Culture Assessment Instrument (OCAI) is easily taken in an online version (www.ocai-online.com) • Highly validated and reliable. • Over 60,000 people have taken it representing thousands of companies. • Developed and validated at the University of Michigan.© 2012 26
    27. 27. OCAI • OCAI helps you assess your organization around six questions that focus on the core elements of a corporate culture: • Dominant Characteristics • Dominant Leadership Style • Management of Employees • Organizational Glue • Strategic Emphasis • Criteria of Success© 2012 27
    28. 28. Flexibility and Discretion CLAN ADHOCRACY Orientation: Collaborative Orientation: Creative Leader Type: Facilitator, Leader type: Innovator, Mentor, Team Builder Entrepreneur, Visionary Value Drivers: Commitment, Value Drivers: Innovative outputs, External Focus and Differentiation Communication, Development Transformation, Agility Internal Focus and Integration Theory of Effectiveness: Theory of effectiveness: Human Development and Innovativeness, vision, and new participation produce resources produce effectiveness effectiveness HIERARCHY MARKET Orientation: Controlling Orientation: Competing Leader Type: Coordinator Leader Type: Hard Driver, Monitor, Organizer Competitor, Producer Value Drivers: Efficiency, Value Driver: Market Share, Goal Timeliness, Consistency and Achievement, Profitability Uniformity Theory of Effectiveness: Theory of Effectiveness: Aggressively competing and Control and Efficiency with customer focus produce capable processes produce effectiveness effectiveness Stability and Control© 2012 28
    29. 29. Two Questions• Then OCAI first asks how you feel about your organization today.• Then it asks “how you would prefer your culture to be in the future?”© 2012 29
    30. 30. This is a sample of the questions 1 Now 2 Preferred Dominant Characteristics A The organization is a very personal place. It is like an extended family. People seem to share a lot of themselves. B The organization is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take risks. C The organization is very result oriented. A major concern is with getting the job done. People are very competitive and achievement oriented. D The organization is a very controlled and structured place. Formal procedures generally govern what people do. Total 100 100© 2012 30
    31. 31. Diagnose: The Picture Emerges• Tells a story.• Helps you understand how you actually “see, feel and think” about your company and how you “do” your job.• Helps you have a “visual awakening.”© 2012 31
    32. 32. Organizational Culture Assessment Instrument (OCAI) What do you see?© 2012 32
    33. 33. Or maybe like this? Very Competitive© 2012 33
    34. 34. Or a really strong Clan fan?© 2012 34
    35. 35. ―Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up ―– James Belasco and Ralph Stayer, Flight of the Buffalo (1994) Let me tell you some stories SEE WHAT THE GRAPHS CAN SHOW© 2012 35
    36. 36. Family Firm: Construction Business• Small construction firm in Florida that was thriving despite the massive decline in construction.• Six of the nine people working were family— husband, brother, wives, children.• They had survived the recession and were doing well because they were “family.”• But…© 2012 36
    37. 37. There were a lot of issues• Systems: were put into place but not really adhered to.• One member just didn’t deliver the results—but he was “family.”• We were known for our cleanliness and tidiness but not for our innovation or speedy solutions.• How could we shift our focus for better results?© 2012 37
    38. 38. What did his OCAI look like?© 2012 38
    39. 39. His industry wants to go where he is© 2012 39
    40. 40. ―If you do not change direction, you may end up where you are heading‖ – Lao Tzu How about a Transportation Engineering Firm ABC ASSOCIATES© 2012 40
    41. 41. Another Case • Transportation Engineering Firm • $25 million annual revenues • Stalled • Succession issues • Serious loss of 3 Proposals • What to do?© 2012 41
    42. 42. Cultural Tensions and Personal Friction • “How can we improve our internal communications?” • “How can we work together –but better?” • Why isn’t work getting done? • Can’t our different offices work better with each other?© 2012 42
    43. 43. Lot’s of cultural explanations • If I know it, then everyone must know it, so why isn’t it happening…? • Maybe it is our message and not the method? • How come the underground works so much faster than the formal communication channels?© 2012 43
    44. 44. Tried a lot of things • More order and structure (more Red) – More formal structures; more rules – Change the style/frequency of our meetings – Adjust memos/emails/messaging – Adapt our tools from phone calls/texting – Add new virtual methods—WebEx and Skype – Fire people, hire people, Help! 44© 2012
    45. 45. Others wanted more collaboration• We are “lean and mean” so let’s not get burdened with formal rules, policies or meetings—who needs all that structure?© 2012 45
    46. 46. Started a Process• Culture Probes• Observational Research• OCAI© 2012 46
    47. 47. Their Organizational Culture Assessment Instrument (OCAI)© 2012 47
    48. 48. What they found in OCAI diagnosis • Lack of congruence came out in the graphics • Everyone had a different perception of how they were today and how they preferred to be in the future. • And, leadership wanted a singular way of doing things different from the rest© 2012 48
    49. 49. Went to work on their culture • How do we get aligned? • What will we do: – More of and Less of – Start and Stop – Hold secure – When do we start • Metrics Matter: How will we know if it is working?© 2012 49
    50. 50. People don’t resist change. They resist being changed! – Peter Senge Your company has your OCAI —now what? YOU WOULD LIKE TO CHANGE? HOW?© 2012 50
    51. 51. How do you change a culture? • We have a sense of where we are going • How do we get there? Where do we begin? • You want to become more innovative and collaborative. • Or more systematic and controlling? • What does each mean?© 2012 51
    52. 52. To What? Collaborate Create Control Compete© 2012 52
    53. 53. Envision the Future “You” • Story Telling • Describe your organization today in story form. • What events reflect the way you value or believe in things today?© 2012 53
    54. 54. Tell us about you in a future story?• Tell us the story as you want it to take place in the future: – “I would have wanted more people to be involved in the solution of the problem.” – “We had a team innovate to come up with the ideas.” – “No one had to ask permission.” – “We are much more focused on results.” © 2012 54
    55. 55. With stories as destinations• How do we change?• Share with you exercises that help the mind create new vision for the future company culture. – “More of and Less of” – “Start, Stop, Secure”© 2012 55
    56. 56. So, you want to be like this!© 2012 56
    57. 57. What will you do More of/Less of? Clan: Collaborative Adhocracy: Creative Hierarchy: Controlling Market: Competitive© 2012 57
    58. 58. “More of Less of”-- Means/doesn’t Mean Clan Culture increase means: Adhocracy Culture increase means: More employee empowerment More employee suggestions More participation and involvement More process innovativeness More cross-functional teamwork More thoughtful risk taking More horizontal communication Tolerance of first-time mistakes More listening to customers Hierarchy Culture decrease means: Market Culture decrease means: Fewer sign-offs for decisions Ongoing commitment to excellence More decentralized decisions A world-class organization Fewer roadblocks and less red tape Goal accomplishment Less micro-management Energized employees Trying out more crazy ideas Less myopic thinking about targets Eliminating paperwork A less punishing environment© 2012 58
    59. 59. Start, Stop, Secure Stop Start Secure Today Future© 2012 59
    60. 60. I see it now! THE STORY STARTS TO COME TOGETHER© 2012 60
    61. 61. Once you have it started, what next?• Culture Change is much like any new business venture.• You need a vision: what will it look like.• A strategy: How will we get there?• A plan in steps: Concrete things you will do to become a different type of organization.• And a map: ChangeMap™.© 2012 61
    62. 62. ChangeMap™• Backward map the process.• ChangeMap™ it!• Careful how you splice the pieces together.© 2012 62
    63. 63. Color code your plan• Is it more employee engagement and empowerment? More “yellow” CLAN ADHOCRACY• Or more “red” with better HIERARCHY MARKET controls and structure?• Should they be more “blue” for results• Or do you need more innovation—”green” 63© 2012
    64. 64. ―Never doubt that a small group of thoughtful, committed citizens can change the world.‖ — Margaret Mead Change is here to stay FINAL THOUGHTS© 2012 64
    65. 65. What Did Kikos Actual Do?• Began a process with great pain to transform the auction company into one that could thrive for the next generation.• Board Changes• Formed a new Holding Company• Process Changes• Human Resource Changes• Culture Change© 2012 65
    66. 66. We are our Culture• It is what we value and believe.• What we think is true and real.• It is how we get our jobs done and live in our companies.• Both for family firms and for large corporations.• Businesses thrive or die on how they do things, not just what they do.© 2012 66
    67. 67. What is right for when?• Is today’s culture right for the new environment you are operating in?• Should we change it? To be more Innovative or Results-Oriented; more Collaborative or more Regulated?• How do we begin? And keep it going?© 2012 67
    68. 68. Closing Thought• There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things." — Niccolo Machiavelli The Prince (1532)© 2012 68
    69. 69. For more information please reach us at info@simonassociates.netAndrea J. Simon PhDSimon Associates Management Consultants1905 Hunter Brook RoadYorktown Heights, NY 10598 USACell 914-261-1631Office 914-245-1641asimon@simonassociates.netSkype: andrea.j.simonFor the OCAI-Online we refer you to www.ocai-online.com© 2012 69

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