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The power of culture in transformation

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Presentation is from the Agile Leadership meeting on April 17th at the Hunt library at NC State.

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The power of culture in transformation

  1. 1. OST The power of culture in transformation Perry Riggs – Deutsche Bank, April 2018
  2. 2. OST About the presentation Title: The power of culture in transformation Overview: This presentation explores two themes “Culture eats Strategy” (Peter Drucker) and “Culture can be changed in a managed way”. It looks at an actionable definition of culture, first and second order change initiatives, why cultural change is a wicked problem and what companies have done to successfully change their culture. About the Speaker: Perry Riggs is a seasoned IT leader with 30 years of experience building and leading teams across a wide array of industries and corporations ranging from startups to the fortune 50. He has worked at Deutsche Bank for 6 years first as a scrum master, then a product owner and is now lead for the Transformation Pillar on the Agile Services Team at Deutsche Bank. Perry’s research interest include culture, open source, leadership and communities of practice. You can contact Perry at perry.riggs@db.com or via LinkedIn. He is always interested in talking to people about any topic but especially the challenges of Agile leadership and organizational change management.
  3. 3. OST • Motivations • Two Premises & A Question • What is Culture? • 3 Cultural Change Approaches • Individuals • Team • Enterprise • References • Invitation Overview Learn from the mistakes of others. You can’t live long enough to make them all yourself Eleanor Roosevelt
  4. 4. OST Motivations Beginnings
  5. 5. OST Motivations
  6. 6. OST Two Premises and a Question Focusing the conversation
  7. 7. OST Premise 1: Culture eats strategy! Premise 2: Culture can be changed in a managed way! Culture & Transformations are Linked Question: Does your initiative need a cultural focus?
  8. 8. OST Culture research has existed for decades
  9. 9. OST What is culture, Why should we care? Unraveling the Gordian Knot
  10. 10. OST Results from an eleven year Study1 Why should we care about organizational culture? 1Kotter, John P. Corporate Culture and Performance. • Everything about your business can be copied except your culture. • Culture “can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.” (Heskett 2011) • Companies with high performing cultures better weather tough economic times. • Including a cultural focus in a transformation project greatly increases the impact and effectiveness of that transformation. (Quinn 2011) • Its easier to attract and retain talent. Companies with high performing cultures far out perform their peers who do not. Average Increase for Twelve Firms with Performance-Enhancing Cultures Average Increase for Twenty Firms without Performance- Enhancing Cultures. Revenue Growth 682% 166% Employment Growth 282% 36% Stock Price Growth 901% 74% Net Income Growth 756% 1%
  11. 11. OST What comes to mind when you consider Organizational Culture?
  12. 12. OST • 164 definitions (Kroeber, Kluckhohn,1952) • A frequently referenced definition is Edgar Schein’s What is Culture? A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems • Descriptive, Understandable, but not actionable. • A model is needed that reveals the components of culture and how they interact.
  13. 13. OST Multiple Organizational Cultural Models have been defined. Handy's Model of Organizational Culture Power Role Task Person Environment Behavior Capability Beliefs Values Role Identity Gil Broza’s Logical Levels Geert Hofstede’s Cultural Dimensions
  14. 14. OST Behavioral science’s view of cultural change Behavior Capability Beliefs Values Role Identity Gil Broza’s Logical Levels Transformation Implementation Second Order Change – Leadership, Revolutionary • Cultural transformation - a process that would change the meanings that members attach to a phenomenon to subsequently invoke a change in their attitudes A form that penetrates so deeply into the genetic code that all future generations acquire and reflect those changes. First Order Change – Management, Evolutionary • Cultural reproduction – repetition of established ways of doing things • Cultural adaptation – Changing the form but not involving any change to the meaning attached to the change target. E.g. adapting a process from another industry to your. Cultural Transformation is a wicked problem1 Wicked problems are complex and complicated and have no ready-made solution. They cannot be solved by a commander-in-chief or an elite management cabal. They can only be solved through leadership, i.e. engaging the organization, asking thoughtful questions, participating in a dialogue of solutions. (McCalman 2015)1Rittel and Webber coined the term Wicked Problem in the context of problems of social policy
  15. 15. OST Cultural Change Approaches Individuals - Neurological Levels of Change
  16. 16. OST Location / People / Time… Actions / Reactions… Knowledge / Resources… What’s important? Labels we place on us… For what purpose? “Problems cannot be solved at the same level of awareness that created them”… Albert Einstein NLP: Neurological Levels of Change Model
  17. 17. OST “Whether you believe you can or believe you can’t, you’re right”… Henry Ford Neurological levels of change Question / Prompts Your current truth Question / Prompts Your new truth What needs to happen / the development points? Any limiting beliefs that need eradicating? Purpose What is your purpose? What is the highest positive intention for this area of your life? 6) Knowing your purpose move into your identity. n/a Identity Who are you in this area of your life? Who are you when you do the things you do/ What are the labels you place on yourself? 5) Who are you now in this area of your life? Who are you now and what labels do you now place on yourself? 7) Values & Beliefs What’s important to you about this? Why does it matter? What’s the most important thing to let someone you care for know about it? 4) What is now important to you about this? What now matters? 8) Skills & Capabilities What areas of expertise do you draw on? What skills do you put into practice? What capabilities do you tap into? 3) What areas of expertise do you now draw on? What skills do you now put into practice? What capabilities do you now tap into? 9) Behaviours What is it that you do? If someone was watching you what would they see you do? What would they hear you say? 2) What is it that you now do? If someone was watching you what would they now see? What would they now hear you say? 10) Environment Where are you when you engage in this area of your life? Who else is there? What do you see and hear about your environment? 1) Where are you now or in the future? Who else is there now or in the future? What do you see and hear about your environment 11) NLP: Neurological Levels of Change Framework
  18. 18. OST Cultural Change Approaches Individuals & Small Teams – Cultural Retrospective
  19. 19. OST The Cultural Retrospective • Utilize the 10 Moving Motivators from Management 3.0 • Individuals rank the Motivators most to least important. • Introduce the Motivation Map Motivation Map Moving Motivators
  20. 20. OST The Cultural Retrospective • Post individual rankings onto the Motivation Map • Discuss Findings with Team and rank Motivations • Introduce the Culture Map Motivation Map with Team Rankings Culture Map
  21. 21. OST The Cultural Retrospective • Collaboratively notate (as shown to the right) the teams current state for each motivator. • Workshop actions to close the gaps between motivator priorities and current culture • Capture actions and track as in a normal retrospective • Experiment with your own motivators and values Culture Map With Team input
  22. 22. OST Cultural Change Approaches Teams, Divisions, Enterprise - The Competing Values Framework
  23. 23. OST The Competing Values Framework Development History • Campbell, Brownas, Peterson, and Dunnette (1974) 39 indicators • Quinn and Rohrbaugh (1983) analysis results in two competing dimensions. • Flexibility, discretion, dynamism vs stability, order, and control • Internal orientation, integration, unity vs external orientation, differentiation, and rivalry • The two dimensions give rise to four quadrants that are contradictory or competing across the diagonal which is the source of the name. • Each quadrant represents basic assumptions, orientations, and values—the same elements that comprise an organizational culture. Flexibility and Discretion Stability and Control InternalFocusandIntegration ExternalFocusandDifferentiation Clan (Collaborate) Adhocracy (Create) Hierarchy (Control) Market (Compete)
  24. 24. OST Adhocracy Orientation: Creative Leader Type: Innovator Entrepreneur Visionary Value Drivers: Innovation outputs Transformation Agility Theory of Innovativeness, vision Effectiveness: and new resources produce Effectiveness The Competing Values Framework • Hierarchy oriented cultures are structured and controlled, with a focus on efficiency, stability and “doing things right.” • Market oriented cultures are results oriented, with a focus on competition, achievement, and “getting the job done.” • Clan oriented cultures are family-like, with a focus on mentoring, nurturing, and “doing things together.” • Adhocracy oriented cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation, and “doing things first.” • Cultural Profile may vary by division or team • Cultural Congruence – Leadership success, ease of change Flexibility and Discretion Stability and Control InternalFocusandIntegration ExternalFocusandDifferentiation Clan Orientation: Collaborative Leader Type: Facilitator Mentor Team Builder Value Drivers: Commitment Communication Development Theory of Human Development Effectiveness: and participation produce Effectiveness Hierarchy Orientation: Controlling Leader Type: Coordinator Monitor Organizer Value Drivers: Efficiency Timeliness Consistency and Uniformity Theory of Control and efficiency Effectiveness: with capable processes produce effectiveness Market Orientation: Competing Leader Type: Hard Driver Competitor Producer Value Drivers: Market Share Goal Achievement Profitability Theory of Aggressively Competing Effectiveness: and customer focus produce Effectiveness Start Ups
  25. 25. OST Formative Years Clan Adhocracy Hierarchy Market Early Success Clan Adhocracy Hierarchy Market Apple’s story via Competing Values Framework John Scully Years Clan Adhocracy Hierarchy Market Jobs Returns Clan Adhocracy Hierarchy Market 1976 – Apple Founded, entrepreneurial, charismatic leader was setting direction 1984 – Macintosh, entire organization adopts the “pirate culture” of Macintosh team 1985 – Global Expansion, Competitive rivals, John Scully hired to baby sit Jobs and ultimately orchestrates his firing 1997 – A better version of Steve Jobs returns to the role of CEO 2000 – Jobs leads the company back to including elements of a Clan/Adhocracy culture (Quinn 2011, chapter 3)
  26. 26. OST Home Depot’s story via Competing Values Framework 1979 – First Store opens, “take care of associates so they can take care of customers”, Inverted leadership pyramid 1981 – Home depot goes public, one of the founders, Bernard Marcus is CEO 2000-2007 – Robert Nardelli CEO, Lean Six Sigma approach, Revenue $45B Up to $81B, stock  8% Lowes  180% Culture was damaged and as a result the focus on customer service diminished. 2007 – Frank Blake, a Nardelli deputy, assumes leadership and quickly refocuses on Customer Service
  27. 27. OST Adhocracy Orientation: Creative Leader Type: Innovator Entrepreneur Visionary Value Drivers: Innovation outputs Transformation Agility Theory of Innovativeness, vision Effectiveness: and new resources produce Effectiveness The Competing Values Framework Informal Survey • What culture are you in today? • Your Preference as Individual, as Manager? • Where do the Agile Values thrive? Flexibility and Discretion Stability and Control InternalFocusandIntegration ExternalFocusandDifferentiation Clan Orientation: Collaborative Leader Type: Facilitator Mentor Team Builder Value Drivers: Commitment Communication Development Theory of Human Development Effectiveness: and participation produce Effectiveness Hierarchy Orientation: Controlling Leader Type: Coordinator Monitor Organizer Value Drivers: Efficiency Timeliness Consistency and Uniformity Theory of Control and efficiency Effectiveness: with capable processes produce effectiveness Market Orientation: Competing Leader Type: Hard Driver Competitor Producer Value Drivers: Market Share Goal Achievement Profitability Theory of Aggressively Competing Effectiveness: and customer focus produce Effectiveness Individuals and Interactions Question: Does your initiative need a cultural focus? Responding to Change Working Software Customer Collaboration
  28. 28. OST 1. What precisely is it in cultural terms that needs changing? 2. What does the cultural change target look like in the present moment? 3. What are the organizational implications of the current cultural variable? 4. What changes in its form are required and why? 5. How is one to set about changing its form to ensure it performs a different function? 6. What will this cultural variable look like after it has been changed? Critical Questions for the Cultural Change Manager
  29. 29. OST DIAGNOSE AND CHANGE CULTURE Determine scope of the organization in question, Team, Group, Division, Enterprise. Identify Team to lead the definition of the As-Is and To-Be culture. 1. Reach consensus regarding the current organizational culture. 2. Reach consensus on the preferred future organizational culture. 3. Determine what the changes will and will not mean. 4. Identify stories illustrating the desired future culture. 5. Identify a strategic action agenda. 6. Identify immediate small wins. 7. Identify leadership implications. 8. Identify metrics, measures, and milestones to maintain accountability. 9. Identify a communication strategy. Each Step is an in-depth conversation designed to establish consensus through dialogue across a wide spectrum of staff. Sr. leadership for the target organization must be involved. If you don’t know where you are, a map won’t help. Chinese Proverb If you don’t know where you are going, any road will do. Watts Humphrey
  30. 30. OST 1,2 Assess The Current & Preferred CultureBibliography provides links to an OCAI excel template 1. Reach consensus regarding the current organizational culture. 2. Reach consensus on the preferred future organizational culture. 1. Instrument focuses on 6 core elements • Dominant Characteristics • Organizational Leadership • Management of Employees 2. Distribute 100 points across 4 probing statements. • Organization Glue • Strategic Emphasis • Criteria of Success
  31. 31. OST 3. Determine What will change and not change 1. What are the attributes and activities that we want to emphasize if we are to move toward the preferred quadrant? 2. What norms, artifacts, and behaviors should dominate our new culture? 3. What attributes should we reduce or abandon if we are to move away from a particular quadrant? 4. Although we will move away from a quadrant, which of its characteristics will we preserve? 5. What is unique about each quadrant that we want to make certain to preserve? 6. What continues to be important about this culture type even though we will begin to emphasize another culture type? 7. What can we routinize so that we don't have to provide additional attention or resources to this aspect of our culture? 8. How will we recognize the new culture?.
  32. 32. OST Invitation to collaborate perry.riggs@db.com
  33. 33. OST Key take aways • Consider culture during any change initiative • Culture directly impacts company performance • Culture can be changed in a managed way • Culture change is a wicked problem • Culture change takes multiple years • Cultural Change is never done
  34. 34. OST References Bibliography • Blain, Andrew. “Team Culture Retrospective - Adapted from Management 3.0.” Elabor8, 10 Oct. 2016, elabor8.com.au/team-culture-retrospective/. • Cameron, Kim S., and Robert E. Quinn. Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. Jossey-Bass, 2011. • Deal, T. E., and Allen A. Kennedy. Corporate Cultures: the Rites and Rituals of Corporate Life. Basic Books, 2002. • Denison, Daniel. Leading Culture Change in Global Organizations: Aligning Culture and Strategy. Jossey-Bass, 2012. • Kotter, John P., and James L. Heskett. Corporate Culture and Performance. Free Press, 2011. • Kotter, John P., and Dan S. Cohen. The Heart of Change: Real-Life Stories of How People Change Their Organizations. Harvard Business Review Press, 2012. • Kroeber, A.L. and Kluckhohn, C. Culture: A Critical Review of Concepts and Definitions. Peabody Museum, Cambridge, MA, 181. 1952 • McCalman, James, and David Potter. Leading Cultural Change: the Theory and Practice of Successful Organizational Transformation. Kogan Page, 2015. • North, Dan. “In Praise of SWARMing.” Dan North & Associates, 26 Jan. 2018, dannorth.net/2018/01/26/in-praise-of-swarming/. • Schein, Edgar H., and Peter Schein. Organizational Culture and Leadership. John Wiley & Sons, 2017. • Spencer-Oatey, Helen. “What Is Culture? A Compilation of Quotations.” GlobalPAD Open House, 2012. • Watkins, Michael D. “What Is Organizational Culture? And Why Should We Care?” Harvard Business Review, 7 Aug. 2014, hbr.org/2013/05/what-is-organizational-culture. Stars indicate the relative contributions of the cited work to this presentation

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