To gain an advantage in an increasingly competitive marketplace, it is essential that your culture represents your strategy. So, how can you start changing your culture? You can make this complex or simple. Let’s assume you want to make a start, and you want to understand some practical levers you can pull to start change. First in any organisation, to be effective, you need to have five elements that support each other: Strategy, Structure, People (and their skills), Processes (typically meetings and reports) and Rewards (Financial and Social). This is based on the work of Jay Galbraith.
Let’s leave alone Strategy and Structure because we are trying to build a culture to support these.
From our previous blog using the swimming pool example, we have examined the effect of people. So, we will leave this element alone except to ask one question:
Do your people need new skills or higher skills to support the new culture?
For example, if you want to build a culture that uses and values collaboration can you assume your people have the skills? Typically, they need better listening skills, better conflict resolution skills, better persuasion skills and better negotiation skills. Telling them to listen better, resolve conflict better, persuade better and negotiate better will not make a difference to the culture. If you are serious about changing the culture and if you understand how hard it is to change culture then you will understand Winston Churchill’s quote.
The two elements to discuss further are Processes and Rewards.
Practically, in weekly routines processes translate into meetings and reports. What meetings do you have and what reports do you use? Let’s imagine you are trying to change from a product culture to a customer culture. Check what reports you use, and you will find they are mainly about product. Ask can you run reports that show sales to customers? I have asked this many times and usually get the same answer: you can run different reports and then export them into Excel, manipulate the data and get what you want. How long will that take? Probably, two to four hours.
At this point, I usually say, if you are serious about getting a customer culture, you must be able to press a button and get these reports by customer instantly. Because then your people can act on the data. Your people can spend their time, not on creating reports but spend time on the customer.
“But, you don’t understand. It takes at least three months to get a custom report written for SAP/Oracle”, the manager tells me. My reply, if you are serious about changing the culture to support your new structure and new strategy, you must be able to print those reports now. If you can’t print the reports now, then don’t expect new behaviour for months. Making it easy to get reports that help drive the new behaviours means the behaviours can be reinforced every week.
Similarly, when you are trying to change from product culture to customer culture examine what meetings happen regularly. Typically, these meetings will all be focused around product. There will be few if any meetings focused on customers. Unless you change the kind of meetings and frequency of meetings, then the existing meetings will reinforce the existing culture. So, ask what meetings support the existing culture and what meetings support the new culture? Unless you change the meetings, then each week the meetings reinforce the existing culture.
With meetings, also look at which meetings senior managers attend. The time senior managers spend at meetings sends a signal about how important the subject is to the culture. If you want to change from product culture to customer culture, then you must change the mix of meetings between product and customer and the time senior managers attend product meetings versus customer meetings.
If you want to know how not to do it, try this. Tell the organisation you want a more customer-focused strategy and change the structure, so you have one or more managers responsible for customers. Then make no changes to meetings and have no meetings about customers. Just expect the new customer managers to attend all the existing product meetings and coordinate things better for customers. Will the culture become more customer-focused? No. The existing meetings continuously reinforce the existing product culture.
To change the culture, you must change the mix of meetings and the attendance of senior managers. To support your new culture, what needs to change for your meetings?
On rewards, the ideal is to make some portion of financial rewards depend on the behaviours needed in a new culture. Many organisations, however, cannot do this, so we must look at social rewards and social punishments. Social rewards can be highlighting individual’s behaviour in meetings or newsletters.
What about social punishments? Well, this can be mentioning in meetings when behaviours do not support the new culture. This is sometimes overlooked. But, if senior managers have publically committed to the new culture then they must take the opportunities to highlight when people and managers behaviour does not support the new culture. Senior manager’s behaviour sends strong signals to the rest of the organisation. If they ignore bad behaviour or accept bad behaviour, then the rest of the organisation says we don’t need to change. If they call out the bad behaviour, then the rest of the organisation says maybe we do need to change.
Another technique is for senior managers to set a meeting with a manager who is not behaving to support the new culture. The meeting must be at least 24 hours away, and the senior manager must say nothing more than, “I need to talk to you about something.” In the 24 hours, the other manager is trying to work out what the meeting is about.
The meeting must be a closed-door meeting. Along with the 24-hour notice, this ensures the manager knows it is a serious meeting. At the meeting, only talk about the specific behaviour you want to stop and what behaviour you want to see instead. As a senior manager, emphasise this is an important issue. Send an email confirming you met and what you expect. Meetings like this are unusual and memorable. Meetings like this send a strong signal. A signal that you are serious about the new behaviour and the new culture.
Changing culture is tough. Each week, ensure that you reinforce the new culture you want: Manage your reports and meetings.