1www.haygroup.com©2012 Hay Group. All rights reservedSustainingculture changeTrue culture transformation requires more tha...
©2012 Hay Group. All rights reservedSustaining culture change2More than skin deepMost HR interventions attempt to transfor...
3www.haygroup.comPsychological approaches to culture emphasize theshared and deeply-learned skills, habits of thinking,and...
©2012 Hay Group. All rights reservedSustaining culture change4• Purpose and meaningShared meanings are created by group me...
5www.haygroup.comNew game, new rulesChanging culture is a transformational journey. It’scertainly not an event. It takes t...
©2012 Hay Group. All rights reservedSustaining culture change6Another mistake that many organizations make istrying to cha...
7www.haygroup.comWhen an organization’s culture needs tosignificantly evolve or adapt to the environment,effective leaders...
Hay Group is a global management consulting firm that works withleaders to transform strategy into reality.We develop tale...
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Sustaining culture change

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Sustaining culture change

  1. 1. 1www.haygroup.com©2012 Hay Group. All rights reservedSustainingculture 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 highlyappealing to business leaders. Indeed, manyglobally admired companies credit their success totheir unique organization cultures.Representing ‘how things are done’, organizationalcultures are important drivers of employee behavior,particularly when employees must be relied upon toact on their own initiative in a way that is consistentwith the company’s objectives, culture and values.But managing and/or transforming organizationalculture is not for the faint-of-heart. Nor does itmerely involve a cosmetic sleight-of-hand. Efforts tochange organizational culture often face threesignificant obstacles.Firstly, culture is challenging to grasp as it is aninherently intangible issue. Secondly, changing thebehavior of one person is already difficult enough,let alone trying to sustain new behaviors throughoutan entire organization. Finally, attempts to transformculture are often met with cynicism – the culturesnaps back to old habits if initial changes are notsustained.Traditionally, executives look to their HRdepartment and their tools – from reward totraining – for help to change culture. But evenexperienced HR professionals get frustrated. Thereason lies in the fact that successful transformationdoes not depend on the number of tools used, butrather how deeply the efforts penetrate.
  2. 2. ©2012 Hay Group. All rights reservedSustaining culture change2More than skin deepMost HR interventions attempt to transform cultureby targeting behavior change directly. We arefamiliar with them: forming teams to try to increasecollaboration, changing performance managementand reward systems to increase accountability, orestablishing written codes of conduct to enforcetransparency in business practices.However, these change efforts typically do not havelong-lasting impact since the underlying driversof behavior are untouched, and people eventuallyrevert to their old habits.What is needed to sustain change is an approachthat addresses the deeper drivers of behavior,including shared purpose and meaning, individualbeliefs and values [Figure 1].The underlying aspects of culture can serve as eitherbarriers or enablers to culture transformation. Theyare not directly observable and are challenging tounderstand and manipulate. However the goodnews is that the sustainability of the change isdirectly proportional to the depth of the changeeffort. Hence, the key is to target change efforts atthe underlying drivers of culture.Driving culture changeHay Group defines culture as “thecombination of organizational inspiration andpurpose, motives and beliefs of individuals,and the norms and patterns of interactions ofgroups, which provides the meaning to driveleaders’ and employees’ behaviors and results.”In short, culture is the fabric that providesmeaning for people in their work and theirlives.Based on our research and a historical reviewof culture studies1, we view culture as theunique combination of phenomena thatoperate at three levels [Figure 2]:• Individual – motives and values• Social – relationships and networks• Organizational – purpose and meaning• Motives and valuesPersonal motives and values refer to the coregoal-states, wants and needs that individualstypically strive to reach and to satisfy.Figure 1: The challenge of culture change
  3. 3. 3www.haygroup.comPsychological approaches to culture emphasize theshared and deeply-learned skills, habits of thinking,and mental models employed by individuals in anorganization.David McClelland’s social motives, which arecharacteristics of individuals, play a role in definingorganizational culture. For example, firmspopulated largely by individuals selected for a strongneed for achievement will emphasize theaccomplishment of short-term and tangible goals,often at the expense of longer-term aspirations.• Relationships and networksThe sociological and social psychological approachesemphasize group norms as a manifestation ofculture. Norms are the implicit standards and valuesthat evolve in working groups, and are reflected inthe rules of the game, often most visible insocialization processes. For instance, itmanifests itself in such advice given to newemployees to ‘keep your head down, don’tcreate conflicts, and you will be successful.’Hence, culture is a social phenomenonobserved in the behavioral patterns that arisewhen people interact: the language they use,the customs and traditions that evolve, and therituals they employ in a wide variety ofsituations. If you ask people about theirorganization’s culture, they may answer interms of relationships, for example: ‘We arevery competitive,’ ‘this is a command-and-control organization,’ or ‘we work as oneteam.’1 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)Figure 2: The three dimensions of cultureCulture: three interdependentwebs of meaningIndividuals’motives andvaluesPeoplerelationshipsandnetworksOrganizationpurpose andmeaningFields of anthropologyand philosophy The collective and symbolicfabric of meaning in terms ofwhich people interpret theirexperience and guide theiractionField of sociology The form that actiontypically takes The pattern of social andpower interactionField of psychology The core goal , wants,and needs that peopleusually strive to reach andsatisfyPoint ofsharedmeaning
  4. 4. ©2012 Hay Group. All rights reservedSustaining culture change4• Purpose and meaningShared meanings are created by group members asthey interact with their environment. They derive asense of purpose, inspiration, and success from theirchoices. Purpose and meaning also are shaped by thevalues and formal philosophy espoused by leaders,and the publicly-announced principles and broadpolicies that guide action.These meanings often are represented in a culturethrough the metaphors and integrating symbolscirculating in use within the community. Simplyput, organization purpose can be elicited whenyou ask employees, ‘Why does this company exist?’Some responses could include: ‘to make money forits shareholders,’ ‘to improve the lives of ourcustomers,’ or ‘to give back to the community.’Creating alignmentAt the intersection of the three dimensions ofculture is ‘shared meaning.’ By focusing on this area,companies have a powerful lever to align culturethat touches the individual, group and organization,thus creating a high-performing culture.And it is easy to see why. Employees are most likelyto be deeply engaged in their work and committedto the organization when there is alignment betweentheir individual motives and values, the way thatrelationships and networks operate in theorganization, and the overall purpose of thebusiness.Conversely, if any of the dimensions are misaligned,we will see employees who are less motivated andcommitted. The collective behaviors of groups mayeven work at cross-purposes, leading to long-termdecrease in both performance andproductivity.One of the manifestations of shared meaningcan be found in the “corporate narrative” thatemployees recount to each other and whichillustrates the desired corporate values.For instance, many people are familiar withthe story of how P&G’s A.G. Lafley createda culture of innovation and collaborationfocused on the consumer, which includedmany symbolic changes that had real impact:dismantling the insular corporate executiveoffices and replacing them with training roomsand open space, and changing conferenceroom tables from rectangular to round toreduce hierarchy.
  5. 5. 5www.haygroup.comNew game, new rulesChanging culture is a transformational journey. It’scertainly not an event. It takes time and self-awareness. Moreover, individuals and organizationscannot change if they cannot learn. Hence culturetransformation is really a journey of buildingawareness and alignment between where you aspireto be strategically and the three dimensions ofculture.The starting point is to understand the strategicrequirements of your organization: what type ofculture is needed to deliver the short- and long-termresults you desire? Leaders need to define the typesof behaviors that will be required to help theorganization be successful. Then, they need toprioritize the change levers that will produce themost impactful culture change and focus onsystematically implementing those catalysts forchange [see Figure 3]. Often the most impactful changes are focusedon realigning symbols and artifacts – theintangible levers of change – coupled withleadership acting as role models of the newculture.One of the biggest challenges in mostorganizations is that leadership behaviors,management systems, and organizationalsymbols send conflicting messages toemployees. For example, a company toutsitself as a ‘caring employer’ but employees areexpected to report for work even when theyare ill. Hence, it is critical to make sure thatconsistent messages are sent to reinforce thebehaviors that are needed at the individual,team, and organization levels.Figure 3: How to transform and align culture1
  6. 6. ©2012 Hay Group. All rights reservedSustaining culture change6Another mistake that many organizations make istrying to change too many things at once, oftenfocusing on communications, training, and internalmarketing campaigns – which can beoverwhelming, superficial, and short-lived. It is alsoimportant to identify the positive elements of thecurrent culture that should be kept and reinforcedin the future. It is unlikely that an organizationneeds to undertake a complete change of all theattributes of its culture. Therefore, thetransformation should focus just on the elementsthat need to change or be realigned.Leading culture transformationAs senior executives lead their organizations,they are also – whether they like it or not – thechampions of culture. Shaping culture ischallenging, yet extremely powerful, since ittouches the heart of what drives people andperformance. The best leaders of culturedisplay reflective or intuitive awareness ofwhat works and what does not work in theirorganizations. They model the right attitudes,use appropriate management styles, and sendconsistent messages to the organization.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.
  7. 7. 7www.haygroup.comWhen an organization’s culture needs tosignificantly evolve or adapt to the environment,effective leaders are the first ones to make the effortto demonstrate new behaviors, acknowledge whenthey fail, and show resilience to try again. Culturetransformation requires leaders that are engaged inlearning, risk-taking and re-affirming the behaviorsthat are expected in an organization.Leading culture transformation requires thewillingness to ‘go deep’ within oneself and theorganization. Helping others to change their beliefsand their behaviors requires a clear sense of self,emotional maturity, and determination to make thejourney over several months (and often years).Achieving successful changeCulture transformation is a journey that willchallenge the most resilient and experiencedexecutives and their leadership teams. But that doesnot mean that it is to be avoided. Effectivelyexecuted, it is a rewarding experience that leads tohighly-motivated employees, satisfied customers,and outstanding business results.Culture is extremely powerful when itsystematically and skillfully translates anorganization’s collective and individual beliefsinto consistent and effective behaviors.You can be successful if you follow theprinciples of culture transformation we haveoutlined in this paper:99 Go ‘deep’ to drive and sustain behaviorchange99 Align organizational culture to the businessstrategy99 Create shared meaning at the individual,social, and organizational levels99 Identify the key levers to help implementculture change99 Demonstrate self-awareness andcommitment to lead the transformationCulture transformation is a journey withouta final destination. If undertaken in the rightway, it is a process of continuous improvementand adaptation that will lead to increasedemployee engagement and improved businessperformance for everyone involved.About Hay Group’s global R&D centre for strategy executionHay Group’s global R&D centre for strategy execution researches best practices in strategyexecution globally. Based in Singapore, the centre provides a unique East-West perspective forbusiness leaders all over the world. Our research helps provide insightful advice to executiveslooking to build effective organizations for the future.ContactJeff Shiraki Vice-president, Hay Group E| jeff.shiraki@haygroup.comAndreas Raharso, Ph.D Director, Global R&D centre for strategy execution, Hay GroupE| andreas.raharso@haygroup.comAgnes Long Research associate, Global R&D centre for strategy execution, Hay GroupE| agnes.long@haygroup.comHay Group’s Jean-Marc Laouchez, Katie Lemaire and Ruth Wageman also contributed on thispaper.
  8. 8. Hay 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.comAfricaCape TownJohannesburgPretoriaAsiaBangkokBeijingHo Chi Minh CityHong KongJakartaKuala LumpurMumbaiNew DelhiSeoulShanghaiShenzhenSingaporeTokyoEuropeAmsterdamAthensBarcelonaBerlinBilbaoBirminghamBratislavaBrusselsBucharestBudapestDublinEnschedeFrankfurtGlasgowHelsinkiIstanbulKievLilleLisbonLondonMadridManchesterMilanMoscowOsloParisPragueRomeStockholmStrasbourgViennaVilniusWarsawZeistZurichLatin AmericaBogotáBuenos AiresCaracasLimaMexico CitySan JoséSantiagoSão PauloMiddle EastDubaiRiyadhNorth AmericaAtlantaBostonCalgaryChicagoDallasEdmontonHalifaxKansas CityLos AngelesMontrealNew York MetroOttawaPhiladelphiaReginaSan FranciscoTorontoVancouverWashington DC MetroPacificAucklandBrisbaneMelbournePerthSydneyWellington

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