“We have to change our culture.”

It’s been muttered by every frustrated leader, in every company, in every sector of the business world.

But what most of them mean is, “We have to change the way we do things around here.”

Fundamentally, this is what the term “corporate culture” means—“the way things are done around here.”

Corporate culture is the sum of everything that makes up the modern workplace. It is the stated values of the organization. And, more importantly, it is the unstated values that have never been codified—yet which every employee fully understands.

It includes the symbols of the organization. Some are obvious, like the company logo or the mission and vision statements that hang so prominently in the main lobby. Others are not so obvious to the public—parking spaces, bathrooms and dining rooms, corporate jets that are reserved for senior managers.

It is the conversations that take place in the boardrooms, in the hallways, on the production floor and in the break rooms. And it is just as much the conversations that don’t take place. The jobs-well-done, the need-to-improves and the disciplinary actions that never happen.

It is the stories that are told, the awards that are presented, the celebrations that are canceled, the myths that are perpetuated.

Culture is the “smell of the place,” that feeling you get when you spend any time in an organization, no matter how large or small.

Culture defines what is OK—and what isn’t. Culture defines right and wrong, acceptable and unacceptable, meaningful and meaningless.

Culture can be strong or it can be weak, but it always exists. And it exists because people who work together must understand “the way things are done around here.”

Changing Culture
Anyone who gives culture a thought can understand these concepts. The hard part is accepting how resilient culture is. Because culture defines a globally accepted template for action within an organization, by its nature it exists to resist change. This is the critical point every leader must clearly understand: There is no aspect of a company that is more difficult to change than the culture. A company that has never prioritized food safety in the past, and wishes to move in that direction, must realize that it is embarking on a journey. It will require time, perseverance and committed leadership. There will be resistance, much of it passive and well hidden, and there will be failure.

But corporate culture can be changed if the leaders go into the process with an awareness of the scope of the challenge and a plan for overcoming the inevitable obstacles (for a success story, see “Cultural Transformation at Sunny Delight”).

Culture Types
Over the years, many models of corporate culture have emerged in the business press, and managers can become quickly overwhelmed by the management-speak jargon that academics so often use. In most situations, the discussion can be simplified and distilled into two basic camps of corporate culture: role-based cultures and task-based cultures.

Role-based cultures are most familiar to those of us who have worked in the food manufacturing space, and they have dominated Western companies for decades. In role-based cultures, authority, power and resources are driven by title and individual personality. Hierarchy and bureaucracy frame the structure of the organization. Decisions are passed down from authority figures to be carried out by the relatively powerless employees who form the bottom of the pyramid-shaped org chart.

This culture results in a workforce that is largely disengaged from their work. Employees who have little or no discretion in making decisions or offering input to the decision-making “class” have no motivation to engage when problems emerge.

The pervasive attitude among the frontline workers is “not my problem.” And in a very real sense, this is true. In an environment where the worker is told what to do, how to do it and how much time she has to get it done, she has no ownership of the task. When this person sees a problem developing that is not specifically part of her job, it is literally not her problem. That problem belongs to the quality assurance staff—or packaging—or customer service, but not to her.

Task-based cultures, on the other hand, are far more inclusive of everyone within the organization. This culture type focuses attention on solving problems, accomplishing tasks and developing talents. A team-based approach to work is often used, and respect is earned based on expertise and professionalism. Power evolves from the accomplishments of the group rather than the position of the individual. Reporting lines in this culture are often complex and interwoven rather than straight up the chain of command. Hero leaders and departmental silos are not well tolerated.

So which culture type is most likely to produce lasting results for companies that are attempting to entrench a commitment to food safety? Consider the reaction that line workers are likely to have when they discover an issue—is it “not my problem” or is it “we have a problem?”

The First Step to Change
The first step to creating lasting change to your corporate culture? Senior managers must accept that they will likely not face a more difficult challenge in their professional career. With this backdrop, the members of the executive team must be completely committed to cultural change. In fact, the success of the desired culture change can be predicted by the personal commitment of the CEO and senior team. This does not guarantee success, but a lack of personal commitment will practically guarantee that the initiative will fail!

These changes will create discomfort at every level of the company, probably more in the executive suite than anywhere else. Some members of this group will accept that a new approach to leadership and management is necessary, and some will not. It is not unusual for change leadership to require changes in leadership, as this is not a group famous for its commitment to teamwork. Nonetheless, it is crucial that executives consistently model the behaviors they hope to engender in the larger organization.

A failure here to “walk the talk” will result in systemic cynicism and apathy, and will encourage those who resist the change to soldier on. Author Donella Meadows, in Thinking in Systems, notes, “Purposes are decided from behavior, not from rhetoric or stated goals.”

The clear message in both words and actions must be, “Resistance is futile.”

Where Are You Now?
With executive commitment in hand, the next step is “Where are we now, and where do we want to go?”

There is only one effective way to create a complete picture of the current state of the organization, and that is by meeting with stakeholders. Of course this includes employees and managers from every department and at every level, but to really ensure that your reality is captured, be certain to include external viewpoints as well—feedback from suppliers and clients, even your own board members, will often provide a perspective that differs from the views of those who are too close to the problem.

This data collection will take many forms, like town hall meetings, personal interviews, small group discussions, questionnaires and surveys. However, the key to reliable feedback is to create an environment that encourages two-way communication, and where people understand that they can be honest and open without fear of repercussions.

A huge benefit of these activities is the opportunity to identify those individuals within the company who are already aligned with the new direction. These are people who will serve as banner carriers and examples to their peers. The term we frequently hear in the business press is “change agents.” Finding a group of like-minded employees who embrace the new direction and are committed to driving it forward is critical to the success of any change initiative. Even in a hierarchical organization, the ability to create an informal network of these change agents will drive success. And these people must represent every department, from HR to R&D, and every level, from VP to line worker.

Where Do You Want to Go?
Notice that there has already been a lot of work but no discussion of the specific outcomes—this is by design. The senior managers probably have a good idea of the direction that they would like to take the culture, but it would be premature and inappropriate to deliver this message without input from all the stakeholders. This is particularly true for those companies that are trying to move from a role-based culture to a task-based culture.

It makes no sense to tell people, “We are going to create an environment of cooperation where every employee is valued and your input is welcomed,” followed by, “and this is how you will do it!” The best way to engage people meaningfully is to include them early in the process. Leaders have to be prepared to go into meetings and say, “I don’t know.” Engaging stakeholders early in the process will mean not having answers to some of the difficult questions that emerge from conflicting agendas. With hard work and commitment, however, a vision and a strategy will emerge.

The challenge, then, will be to capture the vision in such a way that it can be presented in an authentic, transparent form to every member of the company so that it says, “This is where we are going, and this is how we are going to get there together.” The vision will be codified in the mission, vision and value statements of the organization. It will be communicated in the company newsletter, on the intranet, in regular e-mails, and it will become part of the daily conversations. It will be evident in the revised key performance indicators of the company that emphasize food safety over all else—including short-term revenue. Every employee will have a clear understanding of the strategy, the shared values, the goals and the expectations of him or her as a valued contributor. All of this will be part of an overarching communication plan that is rich in detail and repeated often.

In fact, legendary change guru John Kaplan tells us “it is very easy for you not to undercommunicate a little bit, but to undercommunicate by huge amounts in a way that will literally, literally kill a change effort even if it’s a brilliant strategy....” Include specific details and celebrate small wins—not on a monthly basis, but daily.

Change Needs Urgency
Complacency is widely acknowledged as the enemy of change. The executive leadership, supported by the guiding coalition, will be instrumental in creating a sense of urgency among the larger group. However, there must be a certain balance in creating urgency without also creating excessive anxiety.

Stephen Elop, CEO of Nokia, famously sent an internal memo to his company referencing the parable of the oil rig worker in the North Sea who suddenly finds himself on a burning platform and faced with the choice of jumping 98 feet into icy waters or taking his chances with the fire. Normally, the man would never jump into the freezing water, but abnormal circumstances caused him to radically change his behavior. Elop went on to explain that Nokia was on a burning platform itself and must decide whether to jump. Ultimately Nokia did jump, abandoning the software platform that had been developed in-house and moving to a Microsoft operating system. Opinions vary on the outcome, but to date Nokia has shown little momentum in regaining lost marketshare while shedding thousands of jobs.

The problem with taking a burning-platform, jump-or-die position? Repeated threats quickly lose their impact, ultimately resulting in a demoralized workforce. The real threat that emerges from this environment is that the most talented people in the company will bolt for other opportunities. This is where the changes created by the Food Safety Modernization Act and Global Food Safety Initiative can provide a natural advantage in the food production environment. The requirement to meet the new standards has created a sense of urgency in the sector.

Evaluate the Processes
Issues of culture often focus attention on production, but it is the supporting processes that will often derail change efforts.

In particular, HR policies and processes for recruitment, evaluation, promotion, training and compensation are a frequent source of internal conflict for organizations and should be evaluated early in the change process to ensure that these issues are not at odds with the new direction. Are new hires recruited with the culture in mind? Are promotions in line with the new cultural priorities? Does compensation continue to flow to those who exhibit “hero” leadership rather than cooperation? These situations are quickly sniffed out by the many who continue to chafe under the control of the few. The result is a fertile breeding ground for cynics and discontent.

Again, it is frequent and directed communication with those who are most impacted by these various processes that will uncover the trouble spots before they come to a boil. It can be a shock for corporate executives who have, over many years, built their professional reputations on the capacity to control their personal fiefdoms. Bureaucracies built around procurement, budgets and quality assurance will frequently be challenged as companies move to empower cross-functional teams.

This is where the will of the executive team is likely to be tested:

•    First, are they up to the challenge of driving change through the ranks of entrenched senior and middle managers?

•    Second, can they create an environment where employee communication is not just a vehicle to complain and expect managers to fix problems, but also a route for employees to accept responsibility for learning and developing solutions?

See “Balancing Employee and Management Engagement,” for ideas on how to assess both sides of the company team.

Persevere Your Way to Change
You cannot change your culture to create the changes you need in your processes and production. In fact, it is exactly the opposite. Only by making ongoing changes to the processes and procedures, and by making these changes permanent, will you eventually create a change in the culture of the company.

Create wins. Celebrate them. Continuously engage stakeholders to reevaluate the progress—or the lack of progress—that is being made. Expect failure. Adapt to the situation and try again. Difficult decisions will have to be made. It is likely that some people will not accept the changes and will have to be let go. Leadership must come from senior executives. Culture change is not an initiative that can be delegated.Always bear in mind that there is no part of this process that will be easy. Changing the culture of any organization is messy, complex and a long-term commitment in the best of circumstances. And don’t declare victory too soon—hidden pockets of resistance lurk everywhere. They will emerge when you decide your job is done.

Again, John Kotter captures the idea best when he likens difficult change initiatives to tending a fire. You can’t just throw a match and walk away. You have to watch over it and adapt to changing conditions to ensure that it will grow into a source of light and energy.

Geoff Schaadt, M.Sc., M.B.A., is a consultant and practice leader, business sustainability, with Delta Partners Inc.,  a management consulting firm headquartered in Ottawa, Ontario. For more information on resources you can use to change the culture at your company or facility, contact Geoff at gschaadt@deltapartners.ca.

 

Cultural Transformation at Sunny Delight

In 2006, results and morale were at an all-time low at the Sunny Delight plant in Atlanta. The divestiture from Procter & Gamble had resulted in the departure of several key resources at a time when the pace of innovation and complexity was increasing significantly. The plant leadership team, led by Amir Ghannad, set out to implement a series of interventions to transform the culture and the results at the plant.

Within 2 years, the plant went from being the worst-performing Sunny Delight plant, and a liability to the company, to delivering company and industry benchmark results across a wide variety of key performance indicators—and being the company’s go-to site.

In 2009, the plant was named “The Company of the Year in Atlanta” by the local chapter of The Association for Operations Management. The Georgia Chapter of the International Coach Federation also recognized the plant with an Honorable Mention PRISM Award for using coaching methodology to bring about a significant turnaround in results and morale. The story of the transformation has also been featured in business radio interviews and in an article entitled “Company Lifts Workers and Bottom Line” in the Atlanta Journal-Constitution on June 27, 2010.

The story of this transformation is a testament to the power of leveraging culture to deliver superior business results. In today’s environment, when the pace of innovation is faster than ever, it is necessary to keep up with, and make full use of, the latest methodologies to improve results. But what often takes the backseat to implementing new programs is good, old-fashioned leadership to ensure that the investments in programs and systems are fully utilized.

Ghannad comments, “The tried-and-true way to get an immediate and lasting boost in results in virtually every business that involves people is to take the necessary steps to ensure people are engaged, excited and committed. In our case, this was the main avenue we used to turn things around at the plant—with virtually no capital investment.”

He also shares some of the values that drove the improvement efforts at the plant forward: “I am clear that these principles themselves are not new to you, but keep in mind that it is not ‘knowing what to do,’ but rather ‘doing what you know’ that makes the difference. I’d encourage you to pick a challenge you are dealing with in your organization and read these principles with the intention to identify and commit to specific actions. These are steps that you are willing to take immediately to improve and leverage employee engagement in your organization.”

Principle 1: The leader must declare him/herself the greatest barrier to progress and actively work toward getting out of the way. If you can think of other factors that you consider your greatest barriers, ask yourself, “Why am I tolerating that? What can I do about it?”

Principle 2: Leaders must declare a bold future into existence. Focusing on survival will not call forth the best in us. Believing in a brighter future does, and we get our clues on what the future holds from our leaders. We declared that we would be “The Showcase of Excellence” at a time when most people would be happy just to know that we would survive. That vision became the standard by which we evaluated ourselves and the brighter future that we looked towards.

Principle 3: Nurture the whole person and a more productive employee will emerge. The second part of our vision was that we were going to be “The Cradle of Prosperity” for the employees and their families. We held coaching sessions and offered programs that were aimed at helping employees. This helped many employees improve their quality of life, and it demonstrated that leadership cared about them—not just as an employee but as a person.

Principle 4: Leaders must not have an entitlement mentality when it comes to their employees’ commitment. We are well within our rights to expect compliance. We pay for it and must receive a certain level of performance in return. However, the ultimate level of commitment that it takes to create breakthrough results is priceless. It can only be earned by creating the right conditions in which employees offer up their commitment for free.

Principle 5: Leaders must openly demonstrate their willingness to receive feedback on their effectiveness as a leader and act on it. It would be naïve to never ask our customers what they think of our products and services and expect to remain competitive. Additionally, as “servant leaders,” we must have formal and informal avenues to gauge our performance. We conducted a survey where all technicians rated the leadership team members and provided examples of positive and negative behavior.

Principle 6: Leadership must actively extend trust and respect. This can be done through symbolic gestures that send a clear signal to the entire organization that the leader considers them trustworthy. One such example in our case is that we do not have timecards; rather, we rely on everyone entering their time in the payroll system correctly. Further, genuine personal gestures of trust and respect have a lasting effect.

Principle 7: Leadership must break down silos and role-model and expect collaboration. If the organization is always looking for direction from the top, the limit of what it can accomplish is determined by the leader’s capacity. But if you expect synergy and coach the next layer of leadership on how to collaborate effectively, it unleashes unlimited power to create.

Principle 8: The most powerful way to shift the culture of an organization is to alter its language. One of the most powerful interventions we made was that we distinguished the language of players “on the court” playing the game, and spectators “in the stands” talking about the game. The pervasive effect of this distinction and language literally resulted in a 10 percent increase in our overall equipment effectiveness less than 2 weeks after we introduced this language at a plant off-site.

 

Balancing Employee and Management Engagement

As more companies start to think about better ways of measuring the energy and motivation of their workforce, the concept of employee engagement has emerged as a commonly accepted method for thinking about these issues.

It has been widely reported that organizations that increase their ratio of engaged employees see a variety of positive outcomes, including increased profits, improved client interactions, improved employee retention, increased productivity and increased safety records.

And as is typical with any new business framework, a constellation of competing products and consulting groups has coalesced around employee engagement. However, two groups have emerged as well-accepted leaders in measuring employee engagement. The Gallup organization with the Q12© survey and The Conference Board with the Employee Engagement Barometer™ have created valid instruments for managers who need to evaluate the state of mind of their employees.

The Other Side of the Equation
What I find missing in this conversation regarding the levels of engagement that employees report is a validated measuring instrument the organization can apply to its leaders regarding their attitudes and behaviors. Something like this would provide a useful mirror for bosses to better understand the impact they have on those who report to them. Issues that should be evaluated would go something like this:

•    My employees are proud to work for (organization name).
•    My direct reports enjoy working for me.
•    My employees have the materials and equipment they need to do their job to the best of their ability.
•    I value the opinions of my employees.
•    I understand what is most motivating to my direct reports—money vs. time off vs. recognition.
•    I regularly speak with my direct reports and discuss their plans for professional development.
•    My employees know where they stand with me at all times—they know exactly where I feel their strengths and weaknesses lie.
•    My employees are committed to doing quality work.
•    My employees are motivated to contribute more than what is expected of them in their jobs.
•    My direct reports are not planning to leave my unit or the company.
•    I provide my employees with the opportunities they need to learn and grow.
•    My employees feel a sense of accomplishment in their jobs.
•    Overall, my employees are satisfied with their jobs.