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How Not to Change a Company’s Culture?

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Just as corporate leaders have difficulty understanding corporate culture, they are equally perplexed by the culture change process itself. Corporate executive expect the process to be like other inventions when it is not. Other type of business interventions can be “done to the organizations,” through a newly issuedpolicy or throughthe efforts of relatively small group of experts (internal or external). Changing the culture of a business requires widespread employee involvementand buy-in. It also requires the right process. The change process does not deal with machinery, office supplies, or reorganizing an organizational chart. It is focus is on people. For example, various marketing, it, or operations improvement efforts do not demand the widespread involvement of the workforce. Certainly, the people who work in companies do not have much of a say about new technology, it is handed to them by the it department and they have to live with it. If mercks frenzied marketing of vioxx had been put to a vote by the entire work force, it probably would never have left the laboratory. Too many managers reject anything that requires a process, though too many were  quick to embrace (mistakenly) business process reengineering. The company has to do it for itself, even when a small group of experts are employed to advise and support the process. Memos, policy statements, town hall meetings, executive retreats, and management directives will not accomplish the task by themselves. They do not always involve leadership team involvement-just concent.

Developing a new strategic business plan is usually accomplished by outside consultant (or internal strategic planning department) without the involvement of the larger company or even middle management. In fact, a major criticism of strategic planning is that it does not take into account the larger organization’s ability to support the strategy.

How not to change a company’s culture?

How not to change a company’s culture was seen at time warner when jerry levin was still ceo and chairman . it was a year before the aol merger and levin decided that he wanted to instill in the company a renewed sense of mission while setting the direction for the “new culture” he believed the company needed. “The company had lost much of its drive and sense of urgency, and growth was slowing. According to one officer, the company had become one slow-moving bureaucracy.” Levin’s method with typical for a media company. He first convened several off-site meetings with his most senior executives to determine the new mission and culture the company should have. Then, levin made a forty-five minute video, starring himself, outlining his thought, and had it distributed to everyone in the company. The process stopped there. Since there was no involvement of employees, there was no buy-in. People’s attitudes, commtment, behavior, values, and competencies were not changed. Performance did not change. The workfarce did not own the culture change process, instead, they were just passive video viewers. The alternative culture that levin envisioned existed only in his mind.

Another, and possibly misguided, approach to culture building was initiated at general electric in 2003. Its goal was to shed its long entrenched engineering culture that had been so famously wedded to six sigma technology and replace it with a culture that was foc8used on innovation, greater autonomy, and the future. The task of changing the culture was not led by jeffrey immelt, the ceo, but instead was handed to the company’s chief marketing officer, who in turn brought in a group of anthopologists to assess the culture and make recommendations. They were followed by the consultants from several design consulting firms that help companies design new products. It was no surprise that many employees thought that the meetings were “a waste of time.” As GE’s new CEO, Immelt missed a great opportunity to put his own stamp on the culture change process.

Where to start: Create Sponsorship at The TOP

Some degree of controversy exists as to where to start the culture change process. Within the organizational consulting profession, many feel that it should start at the top of organization. Others like Gary Hamel, believe that it should be a bottom-up approach(G. Hamel, Leading the Revolution, Harvard Business School Press, 2003). I have concerns about any bottom-up approach that does not have the full commitment and support of senior management. I do agree that people within the organization need to own the change process and the culture, but strong leadership and sponsorship from above are required to avoid chaos and sustain the process, especially when it inevitably runs into roadblocks. Unfortunately we have not yet reached the point where corporate America allows a true democracy to work its will inside the company. The bottom-up approach assumes that success is not possible without first gaining a broad-based buy-in by the rank and file. I agree that full involvement and commitmet by all levels of the work-force is crucial if the process is to be successful. Nevertheless, I know of few organizations where the workforce will take the initiative, of itself, for such a weighty project without approval and support from above. The bottom-up approach can be successful in very flat organizations and  employee-owned business. A potential hazard for the bottom-up approach in that if leadership changes or becomes threatened by the emerging new culture, the entire process can be detailed. New senior management may not be committed to culture building.

Verizon once made a halfhearted attempt to change the”culture of its middle and senior middle management ranks”. The effort pointedly excluded the top twenty officers, whose behaviors were in complete oppositionto the culture change efforts taking place in the management ranks just below them. Needless to say, the effort failed.

A top-down strategy recognized that the proess needs sponsorship at the most senior level if it is to be successful. It also signals to the oganizationthat it is one of the most strategic needs of the company. Sponsorship should clearly start at the top of the organization. The cultre chage process will not scceed if the CEO and other senior officersdo not wholeheartedly endorse the vhange process (and even the board of directors should proactively put their authority behind the change process). The CEO and his officer tem need t communicate to the entire organization a strong sense of urgency about changing culture. They also have to be a pat of the change process themselves. If they divorce themselves from the process or put themselves above it, then they hae already conveyed a message o the organization that it is not important. We have also seen that too many profligate CEOs and senior management teams have created a culture of privilege for themselves, what I call a “mahagony row culture”. N too many suchcases, it has spelled doom for the company as well as destruction of CEO careers. Th CEO needs to make clear that he or his senior management teams are a part of the culture, just like everyone else in the company.



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