strategy+businessISSUE 62 SPRING 2011Stop BlamingYour CultureStart using it instead — to reinforce andbuild the new behavi...
features organizations & people                                  1
STOP                                 BLAMING                                 YOUR                                 CULTURE ...
Jon Katzenbach                    Ashley Harshak                                ashley.ha...
and within it. Discern the elements of the culture that       the realities of organizational culture. As we’ll see, be-ar...
Senior leaders cannot change                                                           cultures by themselves.            ...
— along with Aetna’s then president, Ronald Williams,                                                              who bec...
compassionate way, with a clear rationale for those cho-                                                                  ...
Repeated behaviors have         cultural impact because they are contagious.                 People unconsciously imitate ...
to change — and bring the necessary changes to life by       orative work across functional silos, Reliant identified     ...
results. Henderson’s remarks didn’t have much impact           tored into where you decide to compete, how you intenduntil...
strategy+business magazineis published by Booz & Company Inc.To subscribe, visit www.strategy-business.comor call 1-877-82...
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Cultura stop blaming your culture

  1. 1. strategy+businessISSUE 62 SPRING 2011Stop BlamingYour CultureStart using it instead — to reinforce andbuild the new behaviors that will give you thehigh-performance company you want.BY JON KATZENBACH AND ASHLEY HARSHAKREPRINT 11108
  2. 2. features organizations & people 1
  3. 3. STOP  BLAMING  YOUR  CULTURE features organizations & people by Jon Katzenbach and Ashley Harshak Start using it instead — to reinforce and build the new behaviors that will give you the high-performance company you want. 2 When Alfred M. (Al) Gray Jr. became commandant in battle fatigues in his formal portrait in the Pentagon. (the highest-ranking officer) of the U.S. Marine Corps He is one of the most respected leaders in the Marines’ in 1987, most knowledgeable observers believed that the 250-year history. Corps’s fabled “warrior spirit” culture was already dam- Leaders like Gray understand the value of an or- aged beyond repair. During the Korean and Vietnam ganization’s culture. This can be defined as the set of Wars, the Corps had grown from its historic level of deeply embedded, self-reinforcing behaviors, beliefs, 75,000 regulars to more than 200,000, and its values and mind-sets that determine “how we do things and discipline had eroded. It would have been easy for around here.” People within an organizational culture Gray to blame the damaged organizational culture for share a tacit understanding of the way the world works,Illustration by Michael Klein the problems he inherited, and to launch a formal, full- their place in it, the informal and formal dimensions of scale change initiative. But instead, he began to praise their workplace, and the value of their actions. Though and seek out elements of the old Corps culture, such it seems intangible, the culture has a substantial influ- as its ethic of mutual respect. For example, he regularly ence on everyday actions and on performance. slipped into the mess halls without insignia, so he would Organizational cultures don’t change very quickly. be served the same meals as the privates. To this day, Al Therefore, if you are seeking change in your company Gray is the only Marine Corps commandant portrayed or institution, you are most likely to succeed using your
  4. 4. Jon Katzenbach Ashley Harshak is a senior partner with Booz is a London-based partner & Company. Based in New with Booz & Company. He is York, he leads the Katzenbach part of the firm’s organization, Center, which focuses on in- change, and leadership prac- novative ideas in leadership, tice, with a focus on the public organization, culture, and hu- sector and financial services. man capital. He is the author or coauthor of nine books, including Leading Outside the Lines: How to Mobilize the (In) Formal Organization, Energize Your Team, and Get Better Results (with Zia Khan; Jossey- Bass, 2010). existing culture to help you change the behaviors that intended performance goals. matter most. Bit by bit, as these new behaviors prove Alternatively, leaders may try to ignore their culture their value through business results, the culture you and act as if it isn’t important. But when overlooked,features organizationsfeatures management & people have can evolve into the culture you need. the hidden power of a company’s culture can thwart any leader’s strategic aspirations. No matter how many Blame and Its Alternatives top-down directives you issue, they will rarely be exe- When a new leader’s strategy puts the culture of a com- cuted, at least not with the emotional commitment and pany at risk, the culture will trump the strategy, almost consistency needed to make them successful. every time. There are good reasons for this. Every com- This is not to say that your existing culture is sac- pany’s identity — the body of capabilities and practices rosanct. Indeed, many companies need some kind of that distinguish it and make it effective — is grounded culture change. There are passive-aggressive cultures in the way people think and behave. Deeply embedded where people routinely fail to follow through on their cultural influences tend to persist; they change far more agreements, creative but undisciplined cultures where slowly than marketplace factors, and cause significant talented people pull in different directions, and highly morale problems when not addressed effectively. When politicized bureaucratic cultures that must bear the ex- your strategy and culture clash visibly, more likely than pense of their heavy-handed management style. not, the culture is trying to tell you something about But when you fight your culture head-on or ignore 36 3 your own leadership philosophy. it altogether during a change initiative, you lose the But many leaders overlook this message. They chance of reviving some of the attitudes and behaviors blame the company’s culture for the resistance they that once made your company powerful — and might encounter. In the most extreme cases, they assume an do so again. Several studies (including one conducted explicit mandate for wholesale cultural change. This by Booz & Company and the Bertelsmann Foundation leads them to remove key leaders and old practices, in 2004) suggest a correlation between financial results restructure operations, set in place new rewards and and a strong, inspiring organizational culture. The cor- promotions, and announce other across-the-board pro- relation is hardly surprising; after all, cultures influence grammatic changes. This approach is costly, disrup- and energize the behaviors that matter most. Procter & tive, and risky. Moreover, it takes years to accomplish. Gamble, Southwest Airlines, Apple, Tata, Starbucks, Working in a culture that is under attack reduces em- and FedEx are among the household-name companies ployees’ energy and de-motivates them. It may require noted for unique cultures that contribute significantly strategy+business issue 62 a major marketplace or economic disruption to get to their competitive advantage. people to buy in. Clearly, this is not a game for the faint Fortunately, there is an effective, accessible way to of heart. Worst of all, it is rarely successful; few deal with cultural challenges. Don’t blame your cul- major corporate transformations, especially those in- ture; use it purposefully. View it as an asset: a source volving a wholesale change in the culture, achieve their of energy, pride, and motivation. Learn to work with it
  5. 5. and within it. Discern the elements of the culture that the realities of organizational culture. As we’ll see, be-are congruent with your strategy. Figure out which of havior can influence beliefs at least as much as the otherthe old constructive behaviors embedded in your cul- way around.ture can be applied to accelerate the changes that you • “We don’t really know how to change our culture, sowant. Find ways to counterbalance and diminish other let’s escape it.” There’s a long tradition, going back toelements of the culture that hinder you. In this way, Lockheed Aircraft’s Skunk Works in the 1940s, of cre-you can initiate, accelerate, and sustain truly beneficial ating pockets of entrepreneurial activity for high-perfor-change — with far less effort, time, and expense, and mance results. These are explicitly intended to operatewith better results, than many executives expect. outside the prevailing culture. They may thrive for a Edgar H. Schein, author of The Corporate Culture few years, but they are typically treated as outliers bySurvival Guide (rev. ed., Jossey-Bass, 2009) and a lead- the rest of the company. Eventually, they are either spuning authority on organizational culture, tells a story that off or absorbed back into the mainstream, succumbingillustrates the unexpected leverage this approach offers. to the company’s cultural malaise. “Our culture kills(See “A Corporate Climate of Mutual Help,” by Art even our most innovative efforts” thus becomes a self-Kleiner and Rutger von Post, s+b, Spring 2011.) Three fulfilling prophecy. One of the most famous of thesesenior executives of a large manufacturing company — efforts was General Motors’ ill-fated Saturn brand,the CEO, chief operating officer (COO), and head of or- modeled after the culture of Japanese automakers andganizational development — visited him, seeking advice set up to run separately and independently — but even- features title of the article people features organizations &on building a more dynamic culture. “Just yesterday,” tually overtaken by GM’s culture.said the COO, “I had my regular meeting with subor- • “Leave culture to the people professionals.” Ex-dinates. We have a big circular room, and everybody ecutives with an engineering, finance, or technologysits in the same place each time. But get this — only background often feel ill-equipped to deal with culturalfour people were present this time, and they still sat at issues. They delegate them to their human resources,the far ends of this great big table. Do you see what I’m organizational development, or communications teams.up against?” “It’s all about the ‘soft’ side,” say the executives. “We “What did you do about it?” asked Schein. have to improve our employee engagement scores.” But The executives responded at first with blank stares. the quality of the culture is as much a product of theThen they realized they were part of the system they “hard” side of the organization (strategies, structures,were blaming. The COO could have made a small but processes, and programs) as it is of the soft side (beliefs,significant change simply by asking the four of them to opinions, feelings, networks, and communities of com-move their chairs. Better yet, he could ask the full team mon interest). Although your internal professionals canto vary their seating at the next meeting. The executives measure and monitor behavior as well as advise line 37 4spent the next several hours figuring out other minor management on culture issues, they cannot motivate,actions of that sort, which they put in place the follow- execute, or implement strategic or performance impera-ing week, with great success. tives. Ensuring behavior change that drives competitive advantage is the role of line leaders at multiple levels.Myths of Culture Change • “Culture is the job of the top leaders.” It is veryWhy don’t corporate leaders naturally respond to cul- powerful when the CEO and other top executivesture in this productive way? Because of several myths take explicit personal accountability for the company’sabout culture change that have become prevalent in culture. But senior leaders cannot change cultures bythe business world. Each of these assumptions leads to themselves. They operate at such a large scale, and withtreacherous pitfalls. such broad visibility, that they cannot directly motivate • “Our culture is the root of all our problems.” This people to implement the specific practices and behaviorsbecomes an all-purpose, convenient excuse for perfor- that are required. To succeed with a culture interven-mance shortfalls. “Our process-oriented culture inhibits tion, top leaders need the support of many leaders downcollaboration,” managers say. Or “our long-standing be- the line — particularly those who have daily contactliefs about nurturing people make us coddle weak per- with the people whose behavior change is most critical.formers.” Underlying this myth is a view that attitudes Sometimes, this myth manifests itself at the boardand beliefs shape people’s behavior. This view ignores level. Directors assume that the only way to improve
  6. 6. Senior leaders cannot change cultures by themselves. They need the support of many leaders down the line. performance is to replace the current CEO with an- cal farmers improve their productivity. Would you start other top leader who can bring forth a new and bet- by trying to overhaul their culture to be more like your ter culture. Because they are looking for someone who country’s culture? Or would you set out to learn morefeatures organizationsfeatures management & people promises major change, the company inevitably gets a about the way they thought, looking for connections to full-scale culture overhaul — with all the expense, risk, your ideas, giving them reasons to feel confident about disruption, and likely failure involved. trying something new? The former approach might make you feel more important at first, but it would Working with and within Your Culture likely fail — or at best, take years to accomplish. In Each of these myths plays out differently. But under- contrast, offering a few new methods might generate lying all of them is a big dose of defeatism. Culture is an approving early response, and those practices would thought to be too big to ignore, too tough to conquer, spread as they produced results. The same is true in and too soft to understand (at least by typical managers). your company. Thinking this way, especially when there have been pre- As Schein puts it, “Always think first of the culture vious culture change disappointments, is enough to sap as your source of strength.” Tapping into the emotion- your energy and enthusiasm for change. It can squelch ally gripping aspects of your existing culture can accel- any realistic effort toward high performance before you erate performance. For example, a deep commitment gain the momentum necessary for sustainable success. to customer service may exist, even in companies that 38 5 By contrast, working with and within a culture is are losing customers. This can be drawn upon in efforts sensible, practical, and effective. Thus, it is inherently to improve customer retention rates. The ability to di- energizing. When leaders learn to operate this way, their agnose the beneficial attributes of a culture, and then employees tend to become more productive and their use them to motivate strategically important behavior, own efforts become more rewarding. is one of the key factors that differentiate peak-perform- The first thing to change is the view that, as a lead- ing organizations from the also-rans in their field. er, you can fix your culture by working on it directly. A corporate culture takes some of its attributes from Rarely is that the case. Just as you typically can’t argue the professional and educational background of partici- someone out of a deeply held belief, you can’t force peo- pants. An electronics engineering–driven company like ple to change the way they think and feel about their Hewlett-Packard has a very different cultural ambi- work. Instead, you need to focus on specific behaviors ance from a pharmaceutical firm like Pfizer, a bank like that solve real problems and deliver real results. This, in JPMorgan Chase, or a “metal-bending” manufacturer strategy+business issue 62 turn, enables people to experience the results of think- like GM. Culture is also influenced by the attitudes of ing differently. Experience becomes a better teacher the founders, the location of the headquarters, the types than logical argument. of customers that the company serves, and the experi- Imagine that you were an advisor from an industri- ences people have together. That’s why different com- alized nation, sent to a remote island village to help lo- panies in the same broad industry, such as HP, Apple,
  7. 7. — along with Aetna’s then president, Ronald Williams, who became CEO upon Rowe’s retirement and is now the company’s chairman — led one of the most success- ful turnarounds in U.S. corporate history. In five years, Aetna went from losing $1 million per day to earning $5 million per day. The Rowe/Williams effort was the fourth attempt to transform Aetna’s strategic performance in 15 years. The previous three efforts were derailed by the culture,Microsoft, Intel, Acer, IBM, and Dell, can succeed with which was known within the company as “Mother Aet-such different cultures. Within an overarching corpo- na.” This mind-set pitted the 40,000 employees of Aet-rate culture, there are generally several subcultures, na against everyone else the company had to deal with, features title of the article people features organizations &each with its own unique elements. Schein writes that for example, doctors, patients, medical providers (suchthese can include an operational culture, spurred by line as hospitals), and the employers who bought insurance.managers eager to get the most out of their people; a This “us-against-them” attitude had given Aetna a repu-senior executive culture, grounded in financial insight tation as the most suspicious, recalcitrant, and bureau-and training; and an engineering culture, in which at- cratic health insurance company in the United States.tention is focused on the technology. All three previous top-down change interventions tried To understand your culture, you need to pay close to increase the staff’s empathy for customer organiza-attention to its quiet, sometimes hidden, manifesta- tions, sensitivity to doctors, and responsiveness to pa-tions, such as the side conversations in the hallways, tients. Two efforts basically ignored the culture, and thethe informal consultations behind closed doors, and the third tried to smash it apart. All failed.incisive guidance that people get when they ask one an- Rowe often describes himself as the least likely per-other for advice. It is also evident in the formal lines of son for the Aetna board of directors to pick as CEO.the organization chart and the ways in which directives “I never ran a business,” he says. “I had never been toare worded. Cultures can be diagnosed best by the work business school, or had any commercial management 39 6behaviors they promote. Do people collaborate easily? experience. The only thing I’d ever done was take careDo they make decisions individually or in groups? Are of patients and try to make hospitals do better.” Thatthey open with their information? Do they reflect on willingness to admit he didn’t know everything servedsuccesses and failures and learn from them? him well. He started by identifying about 100 people As you move from diagnosing to improving behav- throughout Aetna as “nonhierarchical influencers.” Heiors, focus first on the few critical changes that matter sought them out informally, asking them to help himmost and support getting the work done, thereby accel- understand how employees felt — about customers anderating the results you want. Make use of both formal patients, about their own work, and about the goals ofand informal mechanisms. the company. These people acted as what anthropolo- gists call key informants: cultural guides who couldTurning Around Mother Aetna help him get to know the company more intimatelyOne executive leader who worked expertly with his ex- than he ever would through purely formal channels. Heisting culture was John W. (Jack) Rowe, CEO of Aetna stayed in touch with them continually, through e-mail,Inc. from 2000 through 2006, chairman from 2001 one-on-one visits, and group discussions. They gradu-through 2006, and currently on the faculty of Colum- ally became the core of a group of people who shapedbia University’s Mailman School of Public Health. A and supported Aetna’s new strategic direction.former gerontologist at Harvard Medical School, Rowe Second, he set out to reconsider the company’s
  8. 8. compassionate way, with a clear rationale for those cho- sen to leave, and with pay increases and stock options (along with an increased work week) for those who re- mained. Rather than worrying that their jobs might be next, the remaining staff at Aetna now had a culture that they had helped define, in which they felt more a part of the growth direction. Rowe and Williams also commissioned a cross- organizational effort to build motivational capability shared values. Aetna had been in business since 1819 among the most respected frontline supervisors in the (in its current form, since 1853), and its company state- company. These “master motivators” were respected by ments about such values as honesty, caring, truthful- their peers; they connected widely and virally in waysfeatures organizationsfeatures management & people ness, and teamwork were long established. But they that energized many of the changes. weren’t congruent; he uncovered at least a dozen dif- ferent formal values statements that various leaders had The Power of Behavior Change put forth over the past decades. So Rowe set up dia- The notion that behavior change leads to attitude logues in Aetna offices around the U.S., on the subject change can be traced back to the 1950s, to psychologist “Why aren’t our shared values practiced in interactions Leon Festinger and his theory of cognitive dissonance. with our customers?” People discussed this question in Festinger argued that when people are induced to act in groups of about 30, defining specific ways in which they new ways, even if those new behaviors feel unfamiliar or (and others) might act differently. wrong at first, their need for consistency will gradually After 20 or more such events, Rowe worked with affect the way they think and feel. They will seek out several of his colleagues to write up a new statement reasons to justify their new actions — both rationally of values and behaviors. He also set up what came to and emotionally. be called purpose-driven councils — cross-functional Behavior change affects attitudes most powerfully groups designed to find ways to make critical changes when it is supported by empirical evidence and real-life 40 7 happen. Rowe and his team designed these councils observation of better results. Direct experience trumps with three distinctive characteristics. First, they as- the old beliefs of an established culture. If that experi- signed each an explicit purpose, such as organizational ence is reinforced by a group of people, then it is far effectiveness (developing a plan for restructuring the easier to change a culture than most people believe. But company) or strategic direction (developing a plan for you must focus on changing the behavior rather than prioritizing customer opportunities). Second, they en- engaging with the culture directly. listed members who were well respected by their col- In emphasizing behavior, you are looking for those leagues and who had many informal connections. few actions, conducted again and again, that will lead Third, they gave the councils decision authority over to better values (and thus to better results). Make clear the areas they were investigating. The strategy council’s the distinctions among the values you want to develop, efforts eventually led Aetna to spin off its financial-ser- the one-time actions you are changing, and the recur- vices businesses and discontinue some unprofitable of- ring behaviors you hope to instill. A commitment to strategy+business issue 62 ferings, such as health insurance in certain countries. service, for example, is a value. When a retail salesper- The new formal practices were congruent with the son expresses that value by helping a customer exchange values in the culture. For example, the executives laid a purchase, that’s an action. When the salesperson does off about 15,000 people, or almost one-third of the this routinely, knowing that over time it will help so- workforce. But they did it in a relatively transparent, lidify customer loyalty to the store, it’s a behavior.
  9. 9. Repeated behaviors have cultural impact because they are contagious. People unconsciously imitate what they see others do.Similarly, frugality in government is a value. When a In moving people to change behaviors, you willprime minister flies on a commercial airline once (as need to rely on both rational arguments and emotionalU.K. leader David Cameron did to the U.S. in July appeal. On the rational side, you need to make a case features title of the article people features organizations &2010, shortly after his election), that’s an action. When for change: Here’s why this particular behavior is need-the prime minister does this consistently, as Singapore ed. Help people recognize, for example, how the newleader Lee Hsien Loong does, that’s a behavior — and it behaviors will support the firm’s business strategy, willis likely to have much more cultural impact. improve customer retention rates, or will be received by Thus, if you are seeking more accountability, iden- Wall Street analysts.tify the types of ongoing behavior that embody that But emotional factors will undoubtedly mattervalue. You might have to be specific: “I expect you to even more. Compassion, fairness, and environmentalread, record, and respond to every customer complaint responsibility are very convincing motivators. So are— and I will reward or penalize you accordingly.” relief from anxiety and the opportunity to work more These new behaviors can be startlingly simple. Years congenially with other people. Many employees willago, Shell Oil Company (a subsidiary of Royal Dutch/ likely be concerned about how the changes will affectShell PLC) had a reliability problem in the global refin- their peers, their own ability to take pride in their work,ery system. It was traced back to the safety and quality their work–life balance, and their family’s and commu-control processes, which were designed at the central nity’s reactions, as well as the firm’s reputation. These 41 8office but not followed consistently at the refineries. issues must be addressed at a gut level, to ensure that ac-Instead of launching a broad accountability initiative, ceptance of the change will be genuine, enthusiastic,a peer group of managers convinced the executive lead- and widespread.ers to institute one new behavior. Before initiating any Understanding without acceptance and commit-new process, central office managers had to ask local ment will not suffice. Nor will acceptance and com-people how they could best introduce it. That simple mitment suffice without discipline, alignment, and thebehavior change, conducted by just a handful of cor- right capabilities. The rational and emotional elementsporate executives, ensured consistent implementation of need to align to yield sustainable change.the new process. Repeated behaviors have cultural impact because Pragmatic Practicesthey are contagious. People unconsciously imitate what Numerous principles for changing culture through be-they see others do. This is particularly true among re- havior have become evident through ongoing practice.spected colleagues; mutual respect is a powerful source • Start pragmatically. Don’t try to change every-of influence. Even small changes in behavior, if they thing at once. Focus on a few critical behaviors thatare picked up by more than one individual, can ripple resonate with your current culture, but that will raisethrough an organization as others see their value and your organization’s performance. Explicitly identifybegin to act accordingly. the target group — the employees whose behavior needs
  10. 10. to change — and bring the necessary changes to life by orative work across functional silos, Reliant identified demonstrating them. the people who had to act differently in order for the • Reinforce the new behaviors through formal and new behavior to take hold. Then, through a combina- informal means. Provide formal metrics, incentives, and tion of training, incentives, and peer-to-peer reinforce- process guidance that lead people to practice these new ment, Reliant induced these individuals to change first. behaviors again and again, until they experience their This effort enabled the company to capture $600 mil- value. For example, set up appraisals, salary reviews, lion of value during the first nine months. and training to reinforce and reward the new behaviors Any leader can do something similar, but take care you seek. At the same time, develop informal connec- that the effort is simple, clearly focused, collectively re- tions that foster the responsiveness and emotional com- inforcing, and not threatening to those who aren’t in- mitment needed to deal with the unexpected. When cluded. Suppose that you’re the head of strategy, frus- there’s a challenging situation, like Shell’s reliability trated at the way such new directives are executed. Havefeatures organizationsfeatures management & people issue, cultivate support networks of people who can as- the top leadership identify 10 people who are linchpins sess it and put in place actions not prescribed by process of strategy execution — whose participation is critical and procedure. to any serious strategic effort. Bring them together to • Seek out role models for the new behavior. Start talk about the barriers they face when trying to execute with the most effective practitioners, the people who new ideas, and the ways that they might overcome those distinguish themselves by the way they act. We often boundaries. Look for places where resources can be or- call these individuals pride builders because their exam- ganized differently, and develop an agenda accordingly. ple helps instill pride about the behavior change. They • Use the culture you already have. Take pains to stay can also help you find ways to get others to adopt the within the most essential tenets of the existing culture. same behavior. This work is sometimes known as look- Make sure you understand clearly the reasons that cur- ing for positive deviance. rent practices exist before you try to change them. In Several years ago, Bell Canada — a 35,000-em- the wake of the Deepwater Horizon oil spill of 2010, ployee telecommunications company owned by BCE many oil companies are being forced to change their Inc. — started with a dozen such pride builders. They safety and environmental practices. It can be surprising- 42 9 rapidly became exemplars for others, and they helped ly difficult to do so, because the existing performance explain to the executives why people did not always contracts include strict requirements about timing adhere to the critical behaviors. The CEO then asked and deadlines. The only way around this is to explic- the group to help develop at least 1,000 more exem- itly rethink those restrictions, taking on the difficult plars by the end of the year. Each member of the first challenge of designing new behaviors that can improve group identified 10 or more other pride builders, and safety while maintaining an acceptable pace. What is the group took off exponentially. With several more it- required here is an integration of process discipline and erations, this effort directly touched more than 15,000 individual initiative and the courage to step up when employees — more than a third of the entire workforce the unexpected occurs. — by the end of the year. • Model what matters most. Be a visible and con- • Enlist your current “cultural carriers.” These are sistent role model of the behavior change you want to the people who are well positioned to transmit behaviors see in others. When he was interim CEO of General strategy+business issue 62 to others, and who can be developed to spread the posi- Motors leading the company’s remarkable transforma- tive elements of the existing culture. In the early 2000s, tion after the U.S. government bailout in 2009, Fritz Reliant Energy recognized the value of cultural carriers Henderson repeatedly admonished his staff to be “in- during an operational performance improvement pro- dividually and collectively accountable,” which meant gram. After defining a small set of behaviors for collab- focusing only on activities directly linked to business
  11. 11. results. Henderson’s remarks didn’t have much impact tored into where you decide to compete, how you intenduntil he provided examples. He posted e-mails with ty- to win, and what operating model you work within.pos, showing that quick decisions were more important As you continue to work with and within your cul-than painstaking attention to appearances. There were ture, you will find it continually changes, keeping pacealso more dramatic examples, like making nearly every with the changes in the marketplace. Your operatingmajor decision on the spot himself rather than waiting model and the execution of your strategy will changefor consensus. accordingly. To be sure, deeply embedded cultures Perhaps the most telling moment came when Hen- change slowly — far more slowly than the business en-derson was handed a 300-page binder of backup infor- vironment. But some cultural elements can adapt moremation as part of his preparation for testifying before rapidly, particularly if you encourage your pride build-the U.S. Congress. The next day, he asked his chief ers, culture carriers, and leading-edge thinkers to ex-of staff to tell the research team to stop. “It must have periment with new ideas, such as digital media or newtaken 20 people a month to produce this report. And forms of customer service, and spread their experienceI’ll never use it. I’d rather have incomplete information through the networks that you have fostered.[than this unnecessary work].” Whatever happens in the outside world, however, • Clarify the specific implications of the new behavior. keep your internal focus on the few critical behaviorsThe new CEO of a large financial-services institution that matter most — those that determine your strategicannounced one of his highest priorities: a new approach and operating performance. Find ways to measure both features title of the article people features organizations &to managing the trade-offs on uncertain deals, which he the behavior change itself, and the results it produces.called taking measured risks. Although he talked about Resist the temptation to attempt changes in theit constantly, and employees understood its importance, behaviors, attitudes, and values of the system all at once.many people still needed more guidance. “I work in le- Remember, it is much easier to act your way into newgal,” someone might say, “and I’m not sure what this thinking than to think your way into new actions. +means to me. Am I supposed to be taking more risks, Reprint No. 11108or am I supposed to help others by pulling on the reinswhen they go too far?” The answer might well havebeen “a bit of both,” but it needed to be spelled out. Similarly, in the midst of any cost reduction exer-cise, people need guidance about new behaviors. How Resourceswill they monitor expenses from now on? How should Joel Cooper, Cognitive Dissonance: Fifty Years of a Classic Theory (Sage,they call attention to wasteful activities that they do 2007): Solid introduction to Leon Festinger’s grand idea and its rel-not control? If a utility shifts from being a government- evance to today’s conflicts. 10 43owned enterprise to a privately held company, the cul- Jon Katzenbach and Zia Khan, Leading Outside the Lines: How to Mo-ture may need to become more focused on customer bilize the (In)Formal Organization, Energize Your Team, and Get Better Results (Jossey-Bass, 2010): Integrating formal and informal measuresservice. What kinds of things could people do different- (with more on the Aetna story).ly? What kinds of regular reminders can be put in place Jon Katzenbach and Zia Khan, “Leading Outside the Lines,” s+b, Sum-to reinforce key behaviors? Which aspects of subscriber mer 2010, How StockPot, aoutreach matter most? division of Campbell’s Soup, used metrics to shift cultural behavior. Richard Pascale, Jerry Sternin, and Monique Sternin, The Power of Posi- tive Deviance: How Unlikely Innovators Solve the World’s Toughest Prob-Culture Consciousness in Times of Change lems (Harvard Business Press, 2010): Changing behavior by championingEvery corporate culture has behaviors that will help you people who get better results.enable the change you want and others that will hinder Edgar H. Schein, The Corporate Culture Survival Guide (rev. ed., Jossey-it. As you become skilled at picking the enablers out and Bass, 2009): Realistic, masterful handbook for diagnosing your culturedeveloping them, this kind of adaptability will become and raising its tacit assumptions to the surface.part of your own distinctive corporate identity. This is The Katzenbach Center website, we_think/katzenbach_center: Ongoing source of research and insight oncritical to the lasting success of peak-performing en- culture change theories and methods.terprises. Your culture can thus become a major factor For more thought leadership on this topic, visit s+b’s website at:supporting your strategy. Its overall strengths are one of company’s intangible assets, and it should be fac-
  12. 12. strategy+business magazineis published by Booz & Company Inc.To subscribe, visit www.strategy-business.comor call 1-877-829-9108.For more information about Booz & Company,visit Park Ave., 20th Floor, New York, NY 10178© 2011 Booz & Company Inc.