A Different Perspective on Culture Change – Part I

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I can already sense what you’re thinking! The last thing we need is another article on cultural or organisational change! Please, give us a break! Certainly I know all too well the number of consulting organisations out there like Senn-Delaney and all the other ‘big’ and ‘small players’ as well as independent consultants who believe they have the unique edge or insight into this issue.  I have a good friend and colleague, John Childress who is head of Principia Group in London who just recently published a book on Culture Change. You can easily bury yourself in the literature and be fooled into thinking that this issue is something akin to the ‘theory of relativity’ when it isn’t.

No one is saying it’s easy and unless there is strong commitment from the top and a clear approach which is flawlessly executed the results won’t be achieved – at least not in this lifetime.  In fact, I believe I may have read somewhere that 60-80% of ‘change programs’ fail – you can correct me if I am wrong. Traditionally when I have been invited into an organisation to help facilitate cultural change, they always like to know, ‘How long will it take?’ I tell them that this depends on where they are now and where they need to go in the future to become an enduring organisations that continues to set the standard for performance or to achieve their ideal state consistent with their vision – assuming they have one! However, the short answer is that it could easily be 3-5 years.  Well, senior management, being normally impatient, are not happy campers.  But it’s a big job and even when it is done it’s not done. As I will soon be writing about in future articles, ‘Who in an organisation has ownershipfor its culture?’ To me, the Human Resource organisation should be the steward and ensure, along with the rest of the leadership team, that the culture is regularly (annually) reviewed and assessed, refined or re-energised to remain in lock-step with the changing and turbulent operating environment, modifications to the vision as well as all the technological, competitive and changing customer requirements occurring on an on-going basis.

The one thing you don’t want to do is what Antony Jenkins, the new CEO who took over Barclays Bank after the Libor fraud scandal in 2013 which was to publically announce (paraphrasing): ‘We have to make our organisation more customer focused … bladeebla… and our first step to move our organisation in that direction will be to lay off 4000 of our people!’

I am also aware that many of the approaches often appear to look more like ‘rocket science’ than common sense.  This, I guess, is where I am going to try and ‘weigh in’ with this article.  What I am going to share with you are two things: (1) what I have observed in my 42 years and some 50 cultural/organisational change programmes of national or global extent for organisations such as Xerox, Shell, Duke Power, StoraEnso, Electrolux, Siemens, Chevrolet Motor Division and the list goes on and (2) share what I have learned from the perspective of a ‘frontline’ employee.

I won’t go into all the details in this article, but hopefully provide you with enough to give you some helpful insights based on my experience. These may be totally different than those of you reading this article.  That’s fine and in fact that’s great as it leads to refreshing dialogue.  Let’s face it, culture change, in my opinion, is more of an art than an science.

So, trying to keep it short and with some value added, here we go and again I mention that what you will read below is what I have perceived or observed from a frontline employee perspective as to the steps in a successful cultural or organisational change process.

Step #1: Frontline employees hear the words of management

Management states their intentions, aspirations or vision and why it is important to the organisation’s future long-term success.  Hopefully some thought has gone into this and those thoughts reflect having listened and learned from employees, customers and suppliers and other key stakeholders too as appropriate. It is important to remember that the message communicated by management must be well engineered and inspiring as well as informative and indicate that it is a ‘team effort’ – all one team, senior management and all employees working together toward a better organisation and a better future.  This message will set the expectations of employees – expectations which will either be met or not. In the latter case, namely failure to meet expectations set by management, the situation is most likely to end in disappointment for all parties involved, mistrust of management and failure to make any demonstrable change in the culture. However, each employee’s contribution will be valuable. The specific contribution will be detailed as an integral part of the cultural change process – what contribution is expected as well as the level of performance expected in achieving that contribution – clear and realistic, yet at the same time challenging.

Behind the scenes, senior management must have a well-defined plan – one component of which is the communication strategy (which ensures regular, 2-way, open and honest, complete and transparent communication) and an execution strategy. I will provide some suggestions in Part II about these strategies.

What management needs to understand is that for those employees that are more actively involved in this change effort, it cannot be just ’another job as assigned’ and needs to be a priority – getting sign off from their direct manager and also being evaluated on their performance in supporting the effort and being recognised for it. That recognition can even be a write-up in the internal employee magazine highlighting them and their work or their team as an example.

Step #2: Frontline employees see things happen

It is here that the manifestation of management’s intentions starts to become real for employees.  They may see and participate in ‘town hall’ meetings, asked to volunteer or be nominated for special strategic business improvement teams, traveling road shows put on by various members of senior staff in different locations to build awareness and gain stronger and more focused support and buy-in from employees.

But remember, many organisations follow the ‘program of the month’ approach – or have in the past.  As a result, employees have become conditioned not to become too excited because management in their infinite wisdom will replace this program with another one in 30 days – so just wait and see.

As an example, when working with Siemens Telecommunications in the U.K.,  I suggested 3 sessions.  Each session had 35 volunteers plus approximately 5 – 7 middle and senior managers and making sure the CEO was at each session! Each session had some 4 elements: a cleansing, defining the future we want, providing some skills and knowledge and then defining an action plan. I decided that since there was such intense negativity in the organisation becasue Siemens had beaten the cost reduction drum for so many years, people were being made redundant, service levels were dropping, customers were becoming upset and more, that first I had to do was drive out this negativity or it would linger in people’s minds acting like an anchor keeping us from moving forward.  So I had everyone in the audience (and this was tough because the British are not open with ‘feelings’ like hate, love, frustration – being much more comfortable sharing information and facts).  I captured it all on a flip chart and it was ‘ugly’ (even management was shocked), made sure we had it all, gained agreement that it was correct.  Then I ripped the two full flip chart pages off, crumpled them into a ball and threw them in the waste paper basket.

Then I said, OK, that was the past now let’s begin to define a new future – one that we want. The concept here was to create a critical mass of ‘change agents’ through the organisation at every level and function who could network with one another, support one another, listen and learn from the other employees, communicate with senior management and get their support on the combined action plan which evolved from the three meetings.

It worked.  When I originally arrived on the scene, the CEO told me he and the management committee estimated that their organisation could only survive another 18 months under present conditions. Together we got the ship turned around.

It is important that three keys elements are a part of this movement: (1) every effort is made to be inclusive – involvement, participation, engagement along with the communication discussed above;  (2) sustained senior management commitment and involvement and (3) ensuring there are no ‘mixed signals’ and everyone in management is reading from the same page – consistency.

Step #3: Frontline employees begin to understand their role more fully at a high level (details to follow in the next steps)

In this case I am focusing on becoming a more customer-focused organisation, but the approach would work regardless of the focus, e.g., becoming people-centric.

Note that it was Xerox which once said: ‘There are only two positions in an organisation.  Either you serve the customer directly or you serve someone who does’.  Truer words have not been spoken.  From my perspective, if you, as a manager or senior manager do not see it that way, possibly you should consider a ‘brain transplant’?

It is here where, if the issue is becoming more customer-focused, each employee is helped to do the following with the help of the ‘change agents’ created in the organisation if an approach similar to Siemens was taken or otherwise with the continuing support of team leaders, supervision and management at all levels:

• Who are my customers? (internal and external)
  • If I were to rank these customers in terms of importance, what would that be and why?
    • What is the quality of the relationship I have with each?
    • Where do I need to improve?
    • How can I improve?

• How will I or we measure the quality of the relationships with my most important customers?
  •  I suggest beginning with a focus on ‘most important’ customers first.  Too often what I have found in organisations is that those customers which are strategically most important are the ones with which the organisation has the worst quality relationships – internally or externally!
  • Take Hilton Hotels Europe, a client of some years ago.  They have a customer segment called the ‘Diamond’ customers.  Hilton identified some 7 segments, but this was their most strategically important one.  Why?  These are people who spend an average of 150 nights per year in a hotel – many are top consultants, those in property development or construction and other professions.  While they only represent 5% of the employee base, they generate some 45% of the revenue for Hilton Europe.  When these customers become unhappy as they did and begin spending more nights at Radisson or other hotel chains, there is cause for alarm.  Fortunately through holding in-depth focus groups in a number of locations, we were able to discover the sources of their unhappiness and work with senior management to develop an effective retention strategy.
  • Now here’s the pay-off. By focusing on the most important customers first (e.g., if you were trying to become more people-centric, you might focus first on high-potential talent as an example – you would have to make that decision), any changes to processes, systems, policies, training and development of personnel or others would have a ‘spill-over’ effect on all customers!).  Everyone would gain some benefit. However, clearly, you would not just stop by focusing only on the most strategically important customers, you could then move to ‘Tier 2’ customers next.  But there should be less to do as changes were already made to benefit ‘Tier 1’ customers. Soon, however, you will reach the point of diminishing returns.  Whether you would make too many changes, adjust the value proposition too much for ‘Tier 3’ would be a strategic decision. Besides, the changes made for Tier I and Tier 2 would impact positively Tier 3 customers in many cases.

• Explain the details of my involvement in this change process so I understand clearly what I must do (the next step discussed in Part II deals with building capability to execute)

• Help me gain perspective
  • If I am a link in chain that goes from inside the organisation and touches the external customer, how will we all work together more effectively and efficiently to serve that external customer while building better internal working relationships between functional silos?
  • Help me understand how my action can positively or negatively impact the external customer
  • How can I be a ‘change agent’ to better support the process?
  • What is the extent of the customer experience with organisation, where are thy having the greatest problems, where are we as frontline employees having the greatest challenges satisfying customers, how do we give the customer a ‘wow’ experience and build their loyalty to a higher level?

The above represent just a taste of what could or should be included in each of the first three steps of a customer-focused cultural change process as seen from the perspective of a frontline employee. These three steps, at the top level, would be identical for any change program. In Part II, we will cover the remaining three steps plus provide an example showing where an organisation is today versus where it needs to go tomorrow.  The change process and the plan followed to ensure execution needs to be designed to get you to where you need to be but only after the baseline has been established – only after you understand clearly where your organisation is today.

As you can see from comparing the left and right columns, this organisation had some challenges ahead.  Setting priorities was part of the key.  Understanding interdependencies was another.  We got the job done.

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