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.

70% of CHANGES FAIL!

Why do change agents keep saying this?  

Isn't that like your financial advisor telling you that you will lose money in 70% of the investments they put you in!  How long would you stay with them?  

I know what we're trying to do, we're trying to create the "sense of urgency" to compel change.  But, isn't it about time we took more pride and professionalism in what we do?  Isn't it time we stopped saying this and got to the bottom of why most changes fail?

You can beat the odds

You want the answer?  Well here it is: most change fails because it's the wrong change!  The fact is that most large scale changes (particularly if there is a large cultural element) never have a chance.  As change agents we're often called in on some ego driven, aspirational change that won't work.

I know, I know - we go on to cover up our failures with the worn out excuses about: lack of leadership from the top, lack of resources, poor communication, and the catch-all of "employee resistance."  Is that true?  Likely not.  The truth is likely closer to the fact that we didn't accept the fundamental barrier to change so we didn't advise our client properly.  

What is the fundamental barrier?  It's the core DNA of a business that drives its implicit strategy.  It's the core values of the company.  These may be stated or unstated; good or bad; right or wrong.  They may have driven the business to success on the highest ground; they may have prevented the business from getting off the ground; or they may be driving the business into the ground.  They cause people to make decisions everyday without thinking.  In aggregate, they're "the way we do things around here" and they are the immune system designed to preserve the organization and defeat change that doesn't respect them.

So what are these DNA values?  There are three and in great companies one of the three will dominate.  Here they are:

• Service to Customers.  This is embodied in Disney-World and Starbucks.  It drives a strategy of customer centricity.
• Quality of Work.  We can think of Southwest Airlines and its strategy of operational efficiency which draws in its loyal customers.
• Respect for Innovation.  These are organizations that are open to ideas - can we all say, Apple.

Of course these values can be thrown out of balance not by another value, but by something we value: profitable growth.  When profitable growth is the dominant strategy then values become distorted.  Chase Bank gives us a recent example of this.

So, you better understand this if you want to get out of the 70% club.  If you're working against the grain then people don't resist, they just go on doing what they've been programed to do.  

That's not to say that there isn't room for change to work against the grain.  It's quite logical to think that Starbucks might want to get a little more efficient (better quality of work) at order taking; however, it can't be at the expense of the relationship experience that customers expect.  Similarly, you don't want Starbucks baristas working the phones at the call center of your mobile service provider (well, you may want it, but you don't want to pay for it.)

The biggest problem is when financial growth (cost cutting and employee cutting) is the driver of change.  If this is the case then openly recognize it.  No amount of vision, executive commitment, and "what's in it for me" communication will ameliorate resistance.  This is Nike change, "just do it!"  Removing a band aid has a finite amount of pain - my advice is to rip it off rather than prolonging the pain.

I consulted to a company whose innovations made it an overnight success.  They wanted to scale up their manufacturing and after sales service to meet a growing demand.  After a week of consulting I advised them to outsource their manufacturing, sales, and service; and take on an "adjacent possible" strategy by using their cash to buy horizontal businesses that were driven by innovation.  

Ego and aspiration defeated my advice.  For years the company lost profit as it struggled to drive quality into its products and service into its relationships.  It was recently bought by its biggest competitor.

Hmmm.  Does that count in the 70%?