Change – Managing the Culture

THE MAIN POINT (91 seconds reading time)

Is managing the organizational culture a task only for the CEO? Not necessarily. First, culture change needs a champion as I’ll describe shortly. That champion isn’t necessarily the CEO or other corporate executive. Second, each person is responsible to manage the culture of his or her work unit.

Several years ago, we conducted a number of solution-focused leadership workshops for a large number of people in an HMO (Health Maintenance Organization). The IT group in that organization had a culture significantly influenced by an unmentioned value of deprecation (belittling people). The unwritten rule was that teasing and jabbing people was an important part of getting the work done. I called what they had ritualistic ridicule. The emotional hazing had spiraled out of control. The amygdala of people’s brains were being bombarded by the cortex trying to explain how this kind of harassment was really a method for bonding.

First one IT person who participated in the workshop confronted the contradiction between the IT culture and the teaching of the workshop. (A solution-focused leader recognizes the strengths of those around him or her, affirms and encourages the strengths, and gathers the strengths to move the strengths toward a shared vision. Recognizing and affirming strengths is the antithesis of “playful” teasing.) After a second and third IT person finished the workshop, they encountered a watershed moment in a department meeting where they had to choose between the current culture and the desired culture or the culture that would be espoused based on solution-focused principles. Together, three people in a twelve person organization chose to change their behavior. They acted themselves into new ways of thinking. In relatively short order, the culture of the IT department changed. It doesn’t take a majority to change a culture!

Other work units in the HMO noticed a change in IT. The difference gave them pause. I can’t say that the change in IT changed the HMO because we had about 250 of their managers in the solution-focused leadership workshop over a couple of years. I can say which many experts argue, that if you change a work unit performance for the better, that this change will be recognized up and across the organization and will stimulate interest leading to broader improved performance.

Organizational change and culture change go hand in hand. You can plan change, or change can catch you by surprise. Change can occur quickly or over a long time. And change can be helpful or harmful. But there is no way around the fact that in order to achieve organizational change, you’ll have to deal with your organization’s culture. The important point is that your organization will have to change to keep up with a changing world and a changing business environment. To help your organization deal with that change, you’ll have to manage the culture to control the change of the culture is in the desired and right direction.

THE FOLLOW UP (117 seconds reading time)

Notwithstanding our HMO example, culture is hard to change – especially for a large organization. Culture is the ballast in the organization that provides stability. As such, culture means inertia. Then culture acts like a barrier to change. And the stronger the culture, the harder it is to change. You better have a big need to change culture or you better not try. Conventional wisdom is that culture can’t change unless one or both of two forces are at play: 1) the organization is threatened and 2) someone exerts extreme leadership. If people in the organization feel they will cease to exist or what they’ve built will cease to exist, they feel threatened. Many of the business environment forces today threaten the existence of the organization.

Deal and Kennedy (authors of Corporate Cultures) suggest five situations where changing culture is necessary. If at least one of these situations doesn’t exist, you shouldn’t try to change the culture. The five situations are: 1) a strong culture organization is experiencing a fundamental environmental change, 2) the organization is in a highly competitive industry and the business environment changes quickly, 3) the organization is really not very good, 4) the organization wants to become the best of the best, and 5) the organization is growing rapidly.

During his lifetime, Harold had the good fortune to study and participate in a number of dramatic changes in culture as they happened. One significant change was after the divestiture of the Bell System after 1982. AT&T’s local operations were split into the “Baby Bells” and AT&T had to compete with other companies such as MCI and Sprint for the first time. An example, is that for AT&T to survive, the famous hunker-down heroes had to go and cowboy heroes had to emerge.

Another significant change was in the US Department of Energy after the fall of the Berlin Wall in 1989. The emphasis on defense programs for producing materials for nuclear weapons “to protect the free world” was replaced with an emphasis on environmental management to clean up the nuclear sites “to remediate our harm to the environment.” This change was staggering for the culture and morale in the Department of Energy.

In these experiences and the many experiences around “changing to a quality culture” since the year 2000, Harold learned a lot about culture change. One of his assignments was to be the representative for the president of the Westinghouse division responsible for DOE’s production sites as he worked to change culture in the company. Another experience involved DuPont and changing from a strictly “safety” culture to a quality culture.

The conventional wisdom is that culture change takes forever and costs a fortune. Culture change isn’t easy. If left alone, the culture can change by itself over a period of several decades. In today’s business world, two decades is two forevers. To manage culture change over a reasonable time period, say three to five years, you must commit about ten percent of your total personnel budget to the cause. That is, on average, one work day out of every two weeks by every single employee must be spent on the culture change – for three to five years. The cost is huge.

What’s the difference between my HMO example where culture change came relatively quickly and the AT&T or DOE examples where culture change was so difficult? The answer is that the IT department represents a tightly coupled system, where in touching the system anywhere, you touch the system everywhere. AT&T and DOE represent loosely coupled systems where promulgating the change can be much more complex and take a longer systematic effort.