Change Management – I’m Tired of Culture

Say What????

What is culture?  I read a lot about it these days, particularly as a barrier to implementing change.  Culture has become a curmudgeon.  A general consensus has developed that solving “the way we do things around here” will bring implementation bliss to change management.

My only problem is that the more I read about culture the less I know what to do about it.  It seems that we’re happy defining the problem without giving the specifics of a solution.  Why wake a sleeping dog?

Come on – we’ve got to do better than that.  It’s time that we parsed culture into its essential elements and then offered up ways to change it?  We all know the elements – they’re common to any change readiness assessment. 

Management factors, such as:

• Organization design – with roles & responsibilities
• Planning processes – from strategic through business plans to projects
• Reporting & Measurement systems – for operations & programs
• Reward schemes – for compensation & recognition
• Procedures, processes, & controls

Leadership factors, such as: 

• Setting a vision
• Inspiring the passion in all employees
• Communicating authentically & transparently

You can make up your own list but at the end of the day isn’t that the definition of “culture.”  Doesn’t that describe, “how we do things around here?”  Aren’t these the things we’re trying to change so that an organization can alter or accelerate the path that it’s on?

Here’s an example.  Several years ago I was working at Whirlpool, a great company with many great brands; however, at the time resource power & control rested in the vertical operations – those who designed, manufactured, distributed, and sold the durable appliances.  Brand managers worked horizontally to influence changes across these verticals.

For many months my team worked with the Kitchen-Aid brand to develop ideas for product innovations and enhanced customer experiences.  We were neck deep in great ideas & little results.  Efforts at implementation veered off course and generally withered.  At the heart of the problem was Whirlpool’s refined and efficient planning process.  There was a drumbeat that was known and obeyed by all.  Culture was eating change.

Once we figured out that planning was a barrier to innovation the executive team agreed that we could work with the finance & planning people to redesign the planning system.  It took close to a year and involved things such as:

• New mandates for planning sub-teams to make them more diverse & distribute decision make power
• Criteria to get change initiatives out of the regular flow of decision making and monitoring
• Detailed revision of forms that drove the process

In essence we needed to change the rules of the game if we were going to change resource allocation decision.  Culture wasn’t the problem, the disciplined legacy planning process was.

I believe it’s time to expunge the “culture” word for change management.  If change isn’t happening we need to disaggregate “how things are done,” roll-up our sleeves and change the rules of the game.

Football & Soccer: Who’s Managing? Who’s Leading?

Is Business a Sport?

Well it’s football time here in the US and baseball is heading into the World Series.  Soccer (European football) is in start-up and hockey is locked-out.  I often wonder what or obsession with sports tells us about how we run our businesses.  Are sports and business connected?

Think of an American football game.  Everything is measured right down to quarterback ratings that cannot even be explained.  The team concept is that everyone has a clearly specified job and that the team succeeds when everyone does their prescribed task.  Wise coaches on the sidelines provide the thought capital to conjure up the next play; only when a play breaks down are players allowed to be creative – and even creativity is within tight boundaries.  At the end of the day, win or lose, every play is broken into its multiple components and analyzed to polish positives and eradicate negatives.

Baseball takes individual statistics to the extreme and precision of play to the ultimate.  In baseball every rotation of the ball is measured and when the ball is actually put into play every player knows the detailed response they must execute.  If your not aware of stats or tactics there isn’t much to do at a ball game.  And I love baseball’s honesty – it doesn’t even pretend that teams are headed by coaches; the main man is known as “the manager.”

Other sports like soccer and hockey have a different nature.  Sure they count goals and know who scored them; they know how long someone is on the playing surface; but coaches don’t control the game, the players do.

During a game of soccer or hockey the coaches do little more than make sure they have the right people in the game.  For the coaches all of the work is done before the game.  Like their counter parts in football and baseball, they get players to buy into a system and each other; they develop skills; and they teach plays.  But here is where the comparison ends.  The coaches can’t control the strategy or tactics of play.  They can explain that players should exploit a particularly vulnerable “defensive midfielder” or shoot high to the goalies weak glove side – but they can’t control the players tightly enough to make these things happen.

Americans often say that soccer is boring or they can’t follow the puck in hockey.  Maybe another reason is that the dynamic flow of these games is counter to the mechanical static nature of football and baseball – the games they have played and love.  In football and baseball there is plenty of time to socialize, analyze, and eat; in soccer and hockey there’s no time to understand what just happened or forecast what’s about to happen.

So, do values and principles embedded in these sports carry over into business?  I think they must.  An executive's understanding of coaches, players, and teams must influence how they run a business. 

I believe that if you have been groomed on games like football and baseball then you will tend toward certain characteristics like a fixation on numbers – starting with profits and all of its derivatives.  Stemming from profits runs an OCD about metrics, rewards and holding people accountable.  This style produces results but the style is more the management mechanics of command and control than the leadership dynamics of flexibility and empowerment. 

Conversely, if you're into games like soccer and hockey (or basketball that was invented by a Canadian trying to bring hockey into the gym) then I think your business models are built from different influences.  For example, you probably see inter-changeability of roles and fluidity of leadership.  You’re also more likely to encourage horizontal achievements and group rewards because you see individuals as collective contributors more than individual heroes. 

Although this sports hypothesis is general I find that it has some application at a national level.  I’m a Canadian and a naturalized US citizen.  This sports insight was valuable in my transition to consulting in the US.  During my transition I found that I was often in a mind warp with my clients.  My hockey mind was competing with the football/baseball models held by many of my clients.  To be effective I had to change my starting perspective by understanding their preferred sport.  In my executive interviews I began probing on sports (yes, with women executives, too).  These interviews grounded me in where to begin, but not where to end. 

Conversely, my initial cultural alignment is better in Europe and many parts of South America where soccer aligns with my hockey background.  The same cannot be said for my experiences in Asia where my hypothesis just doesn’t hold up.

For me Asia is a duality.  Usually there is a strong hierarchical managerial type of authority that can even be manifested in deference from subordinates.  Yet there is also a strong collectivism in organizations – people can discuss issues forever, trying to come to a consensus decision where everyone is recognized and no one loses face.  It’s almost like management from above and leadership from below.

So, what’s the lesson here?  Well first of all I believe that many executives come to the business world holding sports orthodoxies that they transfer into their organizations.  And second, like most sports analogies this one has its limits – it can be helpful in many situations and misleading in just as many.

That’s just my opinion.  I could be wrong.

The End OF Change Management As We Know It?

Now Just Hit The Shot!

What do we really achieve as Change Management practitioners?  Or maybe the question is: “do we make enough difference to justify our cost?

These questions disturb me.  We may be the only profession on earth that develops business on the strength of the rallying cry: “70% of change initiatives fail.”

Let me be clear about what I mean by Change Management.  I’m not talking about the mechanics of project management to launch an idea, flip an ERP switch, or have one company buy another.   In all of these cases something eventually changes if you follow and force the steps of good project management.  What I’m talking about is whether we can transform an organization by changing its fundamental approach to business so it is better positioned to cope with its changing world.

I know that we do a lot of good.  We do remedial business education; build capability; and position people for success.  Those who work with us love us; they say it is a career changing experience.

However, at a point in time in most transformation engagements the client hits fee fatigue and the work ends.  We leave declaring victory on the strength of our other rallying cry: “change is a journey.”  How is this possible?  We all extoll the fact that the world is changing at an exponential rate, but we tell our clients that our work is a journey.  In effect we bring them to the brink of success then let them be dragged back into the tar pit as we fly off to our next opportunity.

I believe there’s something wrong with the way we work if we’re comfortable in the world of “70% of our work fails on this journey of change.”  Where is the issue?  I’m not sure, but sometimes I think we’re just too nice. 

Most of our change management methodology is build on the principles of participation and empowerment to generate ownership and sustainability.  This is great in organizations with high employee empowerment and engagement.  But these aren’t the types of organizations that typically engage change management agents. 

Organizations in need of transformation are rarely hot spots of engagement.  Have you looked at employee engagement data later?  A trickle of decline has turned into a torrent.  Clients need us because their employees aren’t empowered or engaged.

Sure, individual empowerment trumps obedience in the ideal world; but we’re rarely afforded the time and resources to change organizations one person at a time.  Our lever is to influence mass movements within the organizational setting.  It’s our job to find and force the “tipping points” to initiate these movements.  Friendly facilitation may be a barrier to transformation due to:

1. Lack of Resources:  Today’s organizations are lean; the fat is gone.  We are often working with and through people who have “a real job.”  They’re working with us in the fringes of their time.  Often they miss the deadlines for their change tasks or complete them with perfunctory poor quality.
2. Lack of Capability:  Often we’re working with staff who have no passion or potential for the work, or we’re working with high potentials that we need to teach.  We spend lots of time with either “encrusted resisters” or “neophyte sponges.”
3. Lack of Leadership:  We all know the face of leadership, and that’s exactly what we get.  A face with platitudes but no commitment.  Well, what do we expect?  Executives have dozens of competing priorities.  They never have enough time to give us the attention we’re seeking.

Are these symptoms sentencing facilitative change management to its journey of 70% failure?

Maybe it’s time to inject confident strength into our work.  I fully understand that we need to draw on people and knowledge from within the organization to develop solutions.  I know we’re the caddies; we never get to hit the shot.  However, there comes a time when the caddie has to push the seven iron into the golfers hands. 

Our biggest issues in change management are that often client team members don’t do their work, are absent from the project, and cancel meetings.  This is exacerbated when executives don’t make the needed decisions.  When this happens we need to intervene with strong conviction to:

• Select Teams:  The criterion for participation is not “availability.”  Client team members need to understand organization dynamics; be passionate about making changes; and be willing to take risks – even with their careers.
• Replace Participants:  No passengers.  No shirkers.  Members have to own their commitments.  Replacement is the answer for missed deadlines and poor quality work.
• Remove Resisters:  A big part of change management is “change – management.”  If key stakeholders don’t want to play then we need to ask that they be removed from the line of sight.
• Be an Irritant:  Our primary purpose is change, not developing relationships.  We’re not about: cooperating, coordinating, and integrating.  Our careers are dependent upon the organizations transformation, not its politics. 
• Take up the Slack:  Stop waiting for others to do their work or coaching them when they can’t perform.  Reallocate the work or do it for them.  Get the result and move on. 
• Feed the Executives:  Do the executive level work for the executives.  Executives want to look good.  They’ll demonstrate their commitment as long as everything is done for them.  Clear the path, write scripts, and make decisions inescapable.

I know there is a school of thought that says change can’t be imposed from the outside.  There is a belief that our job is to reveal change to people; have them learn heuristically and change through epiphany.  Well has this delivered high returns?  Isn’t it time to change the practice of Change Management as we know it?

"Twelve O''clock High": The Change Management Paradox

The Non-Participator

“Cut out this guidance stuff and just tell me what to do!”  That’s a quote from my son when he was nearing the end of his university education.  Like most young people he was unclear and anxious about his future.  As a good parent I was guiding him.  It wasn’t working; he wanted an answer.  That’s the paradox of parenting – it’s not your life, but you still have a responsibility.  Leading organizational change has a similar paradox.

Participation, involvement, engagement, buy-in, equality; these are all words that underlie organization transformation as we know it in the west.  These words are orthodoxy.  We believe in a democratized change management process.  We make daily decisions and take actions without questioning this belief.

I too am a believer.  I believe that participation increases the chances of success.  Maybe?

Maybe there’s a sequence here, and maybe the sequence goes back to the tireless discussion between management vs. leadership.  Maybe the foundation of transformation is hierarchical control, not egalitarian empowerment?

Let me explain.

Check out your NetFlix or i-Tunes and find the 1949 film Twelve O’clock High starring Gregory Peck.  It's a story about Peck taking over a B-17 squadron during the daytime bombing of Germany in WWII.  Peck is confronted with an undisciplined squadron with a low hit rate and high death rate.  He tries to lead the group but can’t.  He decides to enforce discipline to the extent that the men hate him so much that they all request transfers. 

Of course all turns out well.  The men get the message and Peck relinquishes leadership to the group – and it “saves the day.”  Hollywood drama?  Sure, but it makes a great point.  It reveals the transformation paradox: 

“you can’t lead if you're not in control!”

I relearned this lesson when I recently spent more than two years working in Korea.  The CEO of a $20 billion public company asked our team to build an Innovation capability within the organization to transform it from a market follower to a market leader.  A major issue holding the company back was the Korean culture of deference to hierarchy.  Everyone looked to the boss for ideas.  The deeper you got into the organization the deeper was the belief that “ideas are not my job.”

All of the innovation processes and tools used by our consulting team are based in the principle of participation.  You know the drill: everyone is equal; there are no bad ideas.  

The first six months of the project went well.  There was a lot of knowledge transfer.  Koreans love to learn.  Their Confucius based education system instills a belief in finite knowledge that can be learned and passed along.

Progress stalled as we got into the second six months.  This is where we brought teams together to use their newly acquired innovation skills.  This is where we developed insights from research; crashed insights to find ideas that had never been seen before; and assembled ideas into business opportunities.

Our teams fumbled.  We hit all of the walls: hierarchy within the teams slowed genuine idea generation; the reliance on rote learning inhibited pattern recognition; and even when we got good ideas the dynamic of deference slowed the exploration and synthesis of the ideas. 

Once the teams had reasonable change initiatives we coached them to develop plans to request funding for experiments to de-risk the ideas.  The plans were  to be based in vision, creativity, and energy.  We wanted the teams to sell ideas to their executives, not incremental business improvements.  They found this difficult.  The executive presentations were usually glorified spreadsheets – comfort zones for presenters and receivers of the information.

As we moved past the first year of work we realized that we had to change our approach.  Our biggest shift was to drop the principle of egalitarianism and take up the mantle of authority.  The Korean culture forced the paradox of transformation.

Now that I’ve left Korea I’ve discussed my experience with westerners who have practiced in other cultures like Russia, Saudi Arabia, China, and other countries in the east.  The message is consistent.  Our participative approach to change isn’t an immediate fit in countries with strong traditions of hierarchy and authority.  Empowerment has to be disciplined.  This sounds counter-intuitive, but that’s why it’s a paradox.

Is the west free of the transformation paradox?  I’m not convinced.  According to a recent survey reported in the Economist only 3% of organizations are “self-managed” through a set of core values.  In the remaining 97% there is a predominance of top-down, command and control management that stifles innovation, engagement, and performance.

Are we in the west living a delusion?  Is the principle of participation limiting transformation rather than driving it?  Is the transformation paradox one of the reasons that 70% of change initiatives fail?

These questions are worthy of debate if we are to get better at transforming organizations.  Maybe we’ll find answers to make adjustments, such as:

1.  Using Authority:  People have been trained to look upward.  This is a powerful lever to start the process.  Employees need to have permission to participate.
2. Codifying Creativity:  We can’t simply sit around and “ideate” changes.  We need to be specific on: how to generate ideas, recognize patterns, and synthesize information.
3. Limiting Participation:  Can we really expect to kick start the process by getting “participation from everyone, everywhere?”  In the beginning only involve people who have the talent and passion to participate.
4. Being Out Front:  The transformation leader has to lead from in front, not behind.  Don’t delegate in the beginning.  Be on stage.  Be visible.  Make the decisions.  Knowledge will transfer in due time.

It’s Twelve O'Clock High in the transformation business.

Change Management & The US Health Care Debate: A Case Study

The United States has gone through a wrenching debate over the reform of health care. The new bill cut to the essence of the United States as a republic and the sole of its citizens. This has been high stakes change management. What can the business world learn from this as a case study?

There is an alternative to Private Insurance

The first step in implementing change is for the leader to articulate a vision – what will the new world look like? President Obama’s vision a year ago had tenets such as “single payer and public option”. This is not idealism; it is real life practice that is the norm in most western democracies. It is an alternative and in places like Canada it is less costly and produces better outcomes. Although open to interpretation, here are some numbers.

• Spending as a % of GDP: in US 15%, in Canada10%
• Spending per capita: in US, in Canada $6700 $3700
• Life expectancy - age: in US, in Canada 78.5 80.5
• Very satisfied: in US, in Canada 25% 57%
• Very dissatisfied: in US, in Canada 44% 17%

The gap exists for two reasons:

1. Administration: A single payer dramatically reduces burdensome administration. In the US this activity constitutes about 1/3^rd of the cost of health care. In Canada it’s a little more than 1/10^th. In other words, the single payer approach would save the US about 20+ percentage points on cost. That adds up when you’re talking about trillions of dollars.

2. Treatment: In Canada there are fewer medical resources than in the US – people, equipment, supplies, facilities. This means priorities are required in the allocation of these scarce resources. In the US, where there has always been a luxury of supply, this idea of “allocation” is interpreted as “rationing”.

America was looking for a new model for health care. Canada provides an alternative, but Americans didn’t choose it. They came up with a framework that is uniquely American; a solution that does not look like the starting vision that included single payer and a public option. Erosion of the vision is a common result in the change business. What happened?

In my view The Administration did not recognize the enormity of the change it was proposing. How do you radically change the private health insurance sector in the US. It’s fundamental to the American DNA of individualism and capitalism. The orthodoxy is that corporations have the right to make profits and individuals have the opportunity to earn money to provide for their health care.

Such a discontinuous change requires strong, directive leadership. Although bipartisanship is a rhetorical principal of the American political system it is not an ally to radical change. The effort to develop consensus opened the door to incrementalism, which is resistance in disguise. Ultimately the bill that got passed did not please anyone.

Lessons Learned

Most changes fail – even when the sponsors don’t admit it. This result comes from not understanding the nature of change and the leadership style required to implement change.

The US health care debate highlighted principles that CEO’s should take to heart.

• Know your organization’s DNA. Resistance is directly related to how hard you swim against the organization’s heritage.
• Know the type of change you seek – continuous means incremental, discontinuous means breaking with the past.
• Know your leadership style. Don’t attempt discontinuous change if you are a consensus builder.

In our culture it is unnatural for leaders to adopt a harsh style. Everyone wants to be loved. That implies that most changes will be incremental. CEO’s should know this before they set their visions for change and underlying migration paths.