Learning and Development
In the retail banking example of culture change I referenced previously, it emerged that existing training programs were a significant barrier to becoming more customer focused. It became evident that training programs on a variety of branch banking skills, such as home loan processing and others, were heavily allied to the legacy culture of being operationally focused and risk averse. We had to conduct a comprehensive review of all training and development programs and determine opportunities to inject customer focused examples. This is just one example of how learning and development can either be a significant enabler or barrier to culture change.
Performance Management
Performance management processes and systems are often both hated as well as sacred cows never to be changed. Despite common dissatisfaction and even fear of performance management appraisal processes, many companies are wary of changing. The Management Innovation Exchange (Stein, N., 2011) provides an excellent example of a company that championed a change in their performance management system in order to develop and entrench their desired corporate culture. Stein describes how performance management processes impact culture – “the Gilt Group’s VP, Engineering, John Quinn, despised traditional performance reviews. Not only did he find them intrusive, time-consuming, and ineffective, he believed strongly that they actually detracted from the culture of continuous, ongoing feedback and coaching he wanted to establish with his team”. For companies undergoing culture change to support a new strategic direction, it is essential to ensure that performance management systems support the culture and behaviors the company is attempting to foster.
Corporate Processes and Workflow
Hammerich and Lewis (2013) describe how new approaches to work can create breakthrough business opportunities and require very different cultures. The opposite is also true – entrenched business processes can undermine attempts to execute new strategies and build new cultures. While corporate processes such as my previous description of performance management are also relevant here, other core business processes need to be realigned and optimized. For example, a recent client of mine was attempting to develop a culture that was more agile with much quicker decision-making. While engineers were very supportive of these changes, processes such as supply chain and procurement were incredibly cumbersome, undermining efforts to move faster and be more responsive to customers. Because these business processes are often developed and customized over years if not decades, they can be very difficult to change – but it is essential for these processes to be changed if strategy execution and culture change are to be successful.
Reward and Recognition
Daniel Pink’s book “Drive: The Surprising Truth about What Motivates Us” provides an excellent description of how attempts to motivate employees and create a culture of high performance are so often off target. In many cases, these reward and recognition programs can be de-motivators. Cantrell and Smith (2010) comment on the need to customize reward programs to the needs and interests of individual workers in order to maximize the value and impact, and to influence corporate culture and behaviors. For organizations intending to shift culture and behavior, reward and recognition programs must be scrutinized and revised to ensure they are motivating the kinds of behaviors intended within the desired corporate culture.
Strategy-Culture Scorecard
“What gets measured gets managed” is a common phrase used business. And it is also true for culture change. Connors and smith (2011) describe the need to focus culture change effort squarely on business results. I fundamentally agree with their emphasis, but there is a risk in thinking that only business results need to be measured. Measurements that track a shift in culture – or more specifically behaviors – are excellent leading indicators of business results. A culture scorecard of sorts should include all three levels of culture (Schein 2009) and include quantitative as well as qualitative measures. As with a broader scorecard, visible progress towards new behaviors and a new culture can become self-fulfilling.
Summary
Changing corporate culture is complex, and exponentially so when the organization is multi-national and diversified in terms of types of businesses. There is no single factor or even few elements that can be leveraged for the collective behaviors of employees and ultimately the entire corporate culture to change. The House of Culture provides a framework for organizational leaders to use to determine what elements may need to be leveraged to change the culture of their organizations.
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