How Do You Transform a Culture?

Editor's Note: Take a look at our featured best practice, Developing a Lean Culture (46-slide PowerPoint presentation). This presentation has 46 slides and consists of: * What is culture and definitions * What is organisational culture? * How to develop OC * Leaders & Leadership * Great leaders strategies * Developing a culture statement * Employee engagement * Organisational alignment Also included with [read more]

Also, if you are interested in becoming an expert on Organizational Culture (OC), take a look at Flevy's Organizational Culture (OC) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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So you’ve gotten a big client or Senior Leadership position. The company that is hiring you has seen the results of your previous projects, and they want you to start a very large global project (Enterprise Level) on numerous sites. You of course say, “We can do anything you want.” This is a typical response from most consulting companies and executives. The instant promise of being able to deliver amazing results without even understanding the business model, or most importantly its current state. You tell senior executives that it is just as simple as putting some visuals in place and running some events, tightening up on the management team, and you will have the company trimmed out in no time. The true fact of the matter is that results that are promised can’t be delivered because the time frame is too short for the complexity of the real issue. The culture isn’t ready for the change. It’s easy for someone to say it’s all about the culture to know how to transform one is the hard part.

You can look at a company’s Lean journey like a fraction. Twenty percent will be teaching and applying a Lean Six Sigma tool set and theory, the other eighty percent will be the transformation of the culture. Cultural transformation is changing habits, the way of working, and the belief system. To change a belief system you need to create a system. This will definitely be the most time consuming and challenging. It is difficult enough to get an already mature culture to transform let alone a damaged one. What could create a damaged culture? Some examples are low pay, poor working conditions, no opportunity for advancement or development, no succession planning, poor recognition, etc. So it is imperative that you know the cultures climate.

A good way to evaluate the workforce’s willingness to change, favorability and engagement is through a survey. The survey should have specific categories built around, development, job satisfaction, compensation, perception of management, etc.  This is what you could call pre-work. Now normally when companies do this they just look at the data and say, “Wow look how poor we did.” What needs to be done is employee focus groups need to be created so that the employees can solve their own issues with all levels of management by using the data collected from the different categories. This does several things it allows employees at all levels to have open conversation about real issues the workforce is facing. It also gives an opportunity for development to assist in solving real management issues. Sometimes hourly employees come up with great projects and fixes to systemic issues or they realize everything isn’t that easy to fix (walking in someone else’s shoes). Either way it is a positive experience to increase employee engagement, favorability, and communication or just flat out mentor individuals.

These surveys should normally be done every year or eighteen months. To show improvement create a measurement for employee favorability or engagement. Handle this like any other METRIC for revenue, inventory turn, operating income, etc. Monitor the score and strive to have a workforce where at least 76% of employees would recommend working there (this is considered world class). Allow employees to share the success of their focus group projects with all.

How do we design a system as leaders to build the culture and meet business objectives?

The first step which is the simplest yet usually always missed is communication (when it comes to consistency, frequency and depth). Have you ever worked for a company where management has three or four hour long meetings a day, but only meets with hourly employees on a quarterly basis if that? This type of atmosphere will create a bull whip effect of rumors, resentment, misalignment of strategies and objectives. Targets and milestones will be missed for projects as well as daily customer requirements. Employees create their own systems to deal with issues and it becomes almost impossible to identify the source or process that failed. So what’s the answer from a Lean perspective? The answer is Leadership Standard Work. This is sometimes confused as scheduled staff meetings, tool box meetings or general management communication.

What is Leadership Standard Work?  

Operators have standard work for their value added activities and so should leadership at all levels. The core of Leadership standard work which everyone knows is the Gemba (which refers to observations made where the process occurs). Some of the other components of Leadership Standard Work are usually overlooked and not managed properly. They are reflection meetings, Andon response, accountability process, and mentoring. I will briefly cover them all below.

Gemba

• Visuals need to be in place to identify normal vs abnormal (ex: on-schedule, off-schedule)
• A Gemba is not just a social visit where we discuss our weekend or football games (not saying you don’t have to be personable and pleasant just goal and data oriented).
• Establish METRICS to be discussed and standard questions to be asked every time you Gemba.
• Ensure your route covers all areas of the business
• Design your Gemba for all levels Executive, Managers, Supervisor, etc. All with different frequency, scope and questions.

Reflection Meetings

• These meetings are to solve problems observed and recorded through the Gemba
• Process owners from each functional area should attend, operations, finance, sales, HR, etc.
• Tools used to discuss issues, A3, PDCA, Root Cause Analysis, DMAIC (whatever fits your needs just has to be hypothesis tested, data driven problem solving)
• Create a theme (for the problem statement) for every meeting to keep everyone engaged.
• Gemba is to see, Reflection is to solve.
• Once again create standard for all levels.

Andon Response

• Andon doesn’t have to be a light or flag, it can be as simple as an email.
• There just has to be an established system to elevate or escalate a problem when a process stops or breaks down. This is valuable in the business process as well as operations.
• Ensure there are checks and balances to adjust the process and document Andon and share lessons learned about why the process broke down.

Accountability Process

• Focus on the process not the people
• Create visuals to display process improvements through projects
• Create standard work on how to handle missed milestones and action items

Mentorship

• This one is always an issue at most organizations, this has nothing to do with merit increases or performance reviews
• This has to do with career growth and development
• There should be regularly scheduled mentorship meetings for different levels, Executive, Supervisor, Manager, etc.
• Create a standard to track progress of goals and record communication

One thing that I have learned while working with new clients is that be mindful that everyone is an expert in their own right. Most employees have held certain jobs because of their ability to execute at least to an extent. Even if a business is in a poor state it doesn’t always speak to the talent within the organization. Usually it’s an indication of its leadership. Obviously it may just also be an uncontrollable such as market conditions, economic downturns, Mother Nature, etc. It is our responsibility as change agents to constantly transform the culture.

So we know how important the culture is, because leadership is trained to say it on a daily basis (whether they believe it or not) as do consultants, “focus on the culture.” I promise you if you approach building the culture in a structured nurturing manor using Leadership Standard Work and believe in it you will share great success!

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Organizational Culture, also referred to as Corporate Culture or Company Culture, is the set of underlying and shared beliefs, vision, assumptions, values, habits, business philosophies, and ways of interacting that contribute to the unique social and psychological environment of the organization.

Organizational Culture permeates the organization, affecting all functions and all levels. It starts with what employees do and how they do it—and ultimately drives why employees do what they do. Culture is like the DNA of the organization.

That is why a healthy Company Culture leads to strong Performance, Growth, and Excellence—and the opposite is also true. For any initiative to be successful, we need a Corporate Culture that inherently supports that initiative.

Learn about our Organizational Culture (OC) Best Practice Frameworks here.