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Family Firms           Facing Changing Times?         Time to Think About Culture                     Andrea J. Simon PhD ...
Pre-work• If you are planning on attending this session you might want  to take the OCAI-Online at www.ocai-online.com to ...
What Could 1,000s of Companies        Teach Family Firms?© 2012                              3
Our Talk Today         •   Competing Values: Active Learning         •   Culture Change         •   What to do? Assess and...
Change any Corporate Culture?    • Business has stalled.    • Times have changed.    • Talent is ill-suited for the busine...
For Family Firms?• Succession• Mismatch between family and jobs skills  needed• Culture of the firm keeps talent in wrong ...
A Short Story: Auction Business                     • Largest Auction Business in                       Mid-West          ...
Very Successful Auctioneers© 2012                                 8
Cultural Challenge• “The company is also guided by family principles and integrity,  something none of them take lightly.•...
Why Change the Family Culture?• Son was brought back into the company.• What he brought back was a different way to  “see,...
"It is a bad plan that admits of no                   modification.― — Publilius Syrus                   (First Century BC...
Culture: Makes us Human    • Extraordinary Brains    • Stand and Walk on Two Legs    • Feel things and can Express or     ...
So Many Different Realities•   We sort reality to conform to our mind-map.•   Perception is developed early.•   Perception...
What you Believe is What you See© 2012                           14
So Many Types of Cultures© 2012                               15
Which one is Right for Me?• For Businesses, in General• For Family Firms, in Particular© 2012                             ...
Research is Compelling• Organizational change initiatives in last 30 years were:  TQM, Down-sizing, Reengineering, and Lea...
What does Culture Do?• Highly successful firms have congruent cultures that:   – Reduce uncertainties   – Create a social ...
Change, but to what?• Is mine fine?• Shall I adapt it to new times?• How do you change deeply embedded beliefs  and values...
The most successful businessman is the man                      who holds onto the old just as long as it is              ...
Let’s Play a Game• Card Games are fun• Using the Competing Values Framework card  game we are going to help you see, feel ...
Competing Values Framework• Simple exercise to  understand what the  four dominant types  of cultures really  mean.© 2012 ...
Flexibility and Discretion                                                  CLAN                               ADHOCRACY  ...
What to do?   ASSESSING A FAMILY FIRM’S   CULTURE© 2012                         24
The Process• Let me offer you an overview of the process  we use:         – Assess: OCAI         – Diagnose: Picture      ...
Assess: OCAI   • Organizational Culture Assessment Instrument     (OCAI) is easily taken in an online version     (www.oca...
OCAI         • OCAI helps you assess your organization around six           questions that focus on the core elements of a...
Flexibility and Discretion                                                  CLAN                               ADHOCRACY  ...
Two Questions• Then OCAI first asks how you feel about your  organization today.• Then it asks “how you would prefer your ...
This is a sample of the questions            1 Now   2 Preferred                              Dominant Characteristics    ...
Diagnose: The Picture Emerges• Tells a story.• Helps you understand how  you actually “see, feel and  think” about your co...
Organizational Culture Assessment Instrument (OCAI)                          What do you see?© 2012                       ...
Or maybe like this? Very              Competitive© 2012                              33
Or a really strong Clan fan?© 2012                                  34
―Change is hard because people                                  overestimate the value of what they have and              ...
Family Firm: Construction Business• Small construction firm in Florida that was thriving  despite the massive decline in c...
There were a lot of issues• Systems: were put into place but not really adhered  to.• One member just didn’t deliver the r...
What did his OCAI look like?© 2012                                  38
His industry wants to go where he is© 2012                                     39
―If you do not change direction, you may                                     end up where you are heading‖ –              ...
Another Case  •      Transportation Engineering Firm  •      $25 million annual revenues  •      Stalled  •      Successio...
Cultural Tensions and Personal                     Friction         • “How can we improve our internal           communica...
Lot’s of cultural explanations   • If I know it, then everyone must know it, so why     isn’t it happening…?   • Maybe it ...
Tried a lot of things    • More order and structure (more Red)         –   More formal structures; more rules         –   ...
Others wanted more collaboration• We are “lean and mean” so let’s not get  burdened with formal rules, policies or  meetin...
Started a Process• Culture Probes• Observational Research• OCAI© 2012                         46
Their Organizational Culture Assessment Instrument (OCAI)© 2012                                                           47
What they found in OCAI diagnosis         • Lack of congruence came out in the graphics         • Everyone had a different...
Went to work on their culture    • How do we get aligned?    • What will we do:         –   More of and Less of         – ...
People don’t resist change. They resist                                 being changed! – Peter Senge   Your company has yo...
How do you change a culture?         • We have a sense of where we are going         • How do we get there? Where do we be...
To What?         Collaborate              Create           Control                                   Compete© 2012        ...
Envision the Future “You”                  • Story Telling                  • Describe your organization                  ...
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 wa...
With stories as destinations• How do we change?• Share with you exercises that help the mind  create new vision for the fu...
So, you want to be like this!© 2012                                   56
What will you do More of/Less of?          Clan: Collaborative     Adhocracy: Creative         Hierarchy: Controlling   Ma...
“More of Less of”-- Means/doesn’t Mean    Clan Culture increase means:         Adhocracy Culture increase means:    More e...
Start, Stop, Secure                  Stop   Start   Secure         Today         Future© 2012                             ...
I see it now!   THE STORY STARTS TO COME   TOGETHER© 2012                        60
Once you have it started,               what next?• Culture Change is much like any new business venture.• You need a visi...
ChangeMap™• Backward map the process.• ChangeMap™ it!• Careful how you splice the pieces  together.© 2012                 ...
Color code your plan• Is it more employee  engagement and  empowerment? More “yellow”         CLAN      ADHOCRACY• Or more...
―Never doubt that a small group of                            thoughtful, committed citizens can                          ...
What Did Kikos Actual Do?• Began a process with great pain to transform the  auction company into one that could thrive fo...
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 ...
What is right for when?• Is today’s culture right for the new  environment you are operating in?• Should we change it? To ...
Closing Thought• There is nothing more  difficult to take in hand,  more perilous to conduct,  or more uncertain in its  s...
For more information please reach us at info@simonassociates.netAndrea J. Simon PhDSimon Associates Management Consultants...
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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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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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