Can you change the culture in an organization? As leaders, we’re frequently called upon to do just that, lead a cultural change.
Here’s how I’ve done it as CEO at two different companies in two different countries.
- Define the current culture: Prepare a diagnosis. In my first experience, we hired a consultant to interview employees to find out what they – really – thought about the company. In the second, we worked with the Great Place to Work Institute’s questionnaire (and participated in the rankings). This was our diagnosis of the culture. You get all the employees’ feedback about what’s wrong and right with the company (culture, the leadership, processes, etc.). It’s a gold mine of issues to be solved. To ensure the value of this diagnosis, it’s very important that employees feel safe providing this feedback, so you need to guarantee confidentiality. The consultant did it, but the Great Place to Work questionnaire, system and process really guarantees it (I don’t have any relationship with GPTW, apart from being a satisfied customer).
- Establish and explain the need for change. A key component of any change effort. In my two experiences, we combined the diagnosis with the needs of the business to establish and explain the need for change all around. The business’ needs come from the Strategic Plan, SWOT analysis, past results, current goals, etc. Senior Managers must take the leadership of explaining this around the organization.
- Define the new culture: Clearly, and in a simple form, define the behaviors employees must demonstrate in the new culture (this is the hardest part). Involve key leaders from across the whole organization and hierarchical levels in this effort; these should be the thought and influence leaders of the company, not just the hierarchical ones.
- Establish the process to explain, roll out and measure the progress and impact of the new culture across the organization. This is probably one of the areas where change efforts most often fail. Organization’s delegate this to H.R. and internal communication. They just “throw” a bunch of communiqués at the organization, to little effect. The H.R. department is a key support player in change management efforts, but should not lead it. The organization’s top hierarchical leaders have to go out and explain all this, and show how it’s done (“lead by example”).You need to measure this roll out as you do with any project. Then, you need to measure where the new behaviors are appearing and where they’re not, to take corrective action. In the second experience, we kept using Great Place to Work’s questionnaire and rankings every year to measure progress. But since a yearly process is too far apart, we did some focus groups along the way to have quicker measure of progress, and act quickly on problem areas. We also included the Employee Trust Index (this is the end result of the Great Place To Work questionnaire) in our yearly goals, as well as questions about the new behaviors in the yearly employee 360 and performance appraisals.
- Reward desired behavior and punish undesired behavior. The key to most things in leadership! People who start behaving in line with the new culture should receive visible recognition and rewards. On the other hand, you have to establish clear consequences (punishment) for those who don’t.
If you want more details of how we did it, let me know.
Here’s the example of my most recent experience. This is a company in Central America, with about 3,000 employees, 20 sites across the region and sales of $600 million. We called the change effort our “Leadership Agenda”:
“The Leadership Agenda describes the way we do things in the organization, to achieve exceptional results. It’s a summary of the practices and behaviors we expect from our employees. These define the company’s culture and show the way we live our values every day.”
The Leadership Agenda defined six key components of our culture. Each component included four items:
- Objective
- Practices, programs and tools
- Behaviors expected from employees
- Indicators to measure the implementation and its impact
Then defined the following six components of our culture:
1.- Our Values (Ethical Behavior, Genuine Leadership, Solidarity and Commitment to Sustainability)
2.- Commitment to Results
3.- Wellbeing
4.- Development
5.- Communication
6.- Recognition
Here’re the details of each axis:
1.- Our Values (Ethical Behavior, Genuine Leadership, Solidarity, Commitment to Sustainability)
-Objective:
Ensures that the organization’s goals are met, within the framework of the established values.
-Practices, programs and tools:
Knows and adopts the values
Lives the values every day
Ensures compliance with the values
-Behaviors expected from employees
I live and promote the values
- Indicators to measure the implementation and its impact
Yearly signed commitment to the values
Employee Trust Index regarding values (Great Place to Work questionnaire)
2.- Commitment to Results
-Objective:
Ensures that commitments are kept and the established goals are reached.
-Practices, programs and tools:
Establish clear goals and plans at all levels (using Covey’s 4 Disciplines of Execution)
Establish clear roles, process and policies
Ensure accountability (weekly meetings)
Ensure consequences according to performance and delivery
-Behaviors expected from employees
I show minimum tolerance at un-kept commitments with assertiveness and consequences
- Indicators to measure the implementation and its impact
Compliance with the Business Cycle Plan
Alignment between goals and Balance Score Card
4 Disciplines certifications (from Covey’s 4 Disciplines)
Performance appraisal
3.- Wellbeing
-Objective:
Ensures the health, safety and quality of life of our employees.
-Practices, programs and tools:
Avoid workplace accidents
Prevention of workplace illnesses
Promote healthy lifestyle
Ensure adequate access to health services
-Behaviors expected from employees
I stop unsafe acts immediately, eliminate unsafe conditions and promote a healthy lifestyle
- Indicators to measure the implementation and its impact
Identification and reduction in unsafe acts
Safety gradient
Health gradient
4.- Development
-Objective:
Counts with people that possess the competencies the organization needs, and provides opportunities for professional and personal development.
-Practices, programs and tools:
Defines and develops technical and leadership competencies
Selects personnel (hires) with agility and transparency
Develops employees
Plans employee’s career to ensure the sustainability of the business
-Behaviors expected from employees
I provide systematic and timely feedback about performance and development
- Indicators to measure the implementation and its impact
Time for recruitment
Succession coverage
Training hours
Leadership index (measured in the 360)
5.- Communication
-Objective:
Ensures employees count with the information they need to do their job and that they feel involved and listened to.
-Practices, programs and tools:
Communicates the strategy, goals, results and relevant issues to employees
Promotes dialog on takes in consideration employees’ opinions and suggestions
Is consistent with the companies defined image and message
Ensures reports communicate actively
-Behaviors expected from employees
I provide relevant information and promote open dialog through open questions
- Indicators to measure the implementation and its impact
Compliance with communication plans
Employees’ Trust Index regarding communication (Great Place to Work questionnaire)
6.- Recognition
-Objective:
Promotes the behaviors desired to achieved expected results
-Practices, programs and tools:
Complies with the company’s employee recognition programs
Ensures that desired behaviors are genuinely recognized
Celebrates important events
-Behaviors expected from employees
I look for and provide recognition for work well done and for demonstrating the desired behaviors
- Indicators to measure the implementation and its impact
Employees’ Trust Index regarding recognition (Great Place to Work questionnaire)
With the implementation of this Leadership Agenda, we took this company from not qualifying in the 2008 rankings of Great Place to Work in Central America and The Caribbean (for companies with >1,000 employees), to first place in 2012; with record financial results in each of the last four years, without acquisitions, major investments and within a flat market for the companies products.
Cultural change can be done! It takes passion, effort, system and discipline!
Just don’t forget, culture is not static, it needs to evolve with the needs of the business.