When structure and culture meet, bet on culture. I can’t remember where I first read that, but it often holds true. Particularly in organizations undergoing substantial transformation of their business model, or operating model. This is even tougher in organizations where one of their advantages was a strong culture that unified how the organization ran (Think the Kodak way) as when the organization needs to change, executives often move the “boxes” without addressing the need to change how the people behave. I will be highlighting three cases where culture has been a major issue in organizational performance.
Large Government Ministry: In this case a large government department was trying to move towards a new standard in performance, but were stuck with two cultural issues. First was a culture of “business as usual” and the second was a culture of distrust, bred from austerity measures in the mid-90’s. In fact, so poorly managed was the original organizational change that people still referred to the new ministry by the name of their original ministry(merged in the 90’s). At the time, this culture was a coping mechanism that allowed the Ministry to function under stressful circumstances, but as time went on this culture built more and more resistance to the change needed to improve performance. This is a perfect case of how change management is a necessity, as it could have helped address the original symptom, allowing the executives to build a new high performance culture.
Consulting Firm Merger: An ideal merger on paper with disastrous results. This culture class was the results of two high performance cultures who operated in completely different ways. Despite having similar operating methods, being project based, and having a number of intelligence hard-working people the administrative culture of the firms were completely different. One company had “their way” and the other was far less structured, and this clash of cultures caused a significant turnover of consultants. Ultimately, the best word to describe the merger was a failure – despite that it could’ve been one of the best business moves in the decade had they done a cultural assessment prior and taken the time to align the two groups.
Fast Growing Company: This organization is a perfect example of how the culture that drove the organizations original success is now holding back their ability to mature into the type of business they need to be to succeed going forward. The entrepreneurial culture where each person did what they needed to in order to deliver held back the development of overarching processes and systems for delivering projects on a large scale.
So how can you keep your culture as an advantage and not a disadvantage?
- Complete a cultural assessment. Look for artifacts of the culture, organizational symbols, employee behaviours, control mechanisms, how work is directed etc. This is also an important to see how the structure supports (or doesn’t support) the culture. Communication, performance management, reward programs, and overall compensation in addition to general employee engagement factors need to all be assessed regularly, particularly prior to any large scale change.
- It starts from the top. Leaders need to be involved from the very beginning. When a single level of management stops holding themselves, and their direct reports accountable to the new behaviours it kills the transformation.
- Ensure alignment of the structural elements, particularly performance management and key performance measures. What gets measured gets done, so early on make sure employees and managers are being measured on the behaviours you want to see, AND that they have the tools and understanding of how to do it. Far too often this second part is missing.
- Build a plan. Put together a plan based on the assessment and the elements listed above. Detail timelines and how to implement all the elements of the cultural change.
Anyway – let me know your stories about cultural change.
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