To Change the Culture, Stop Trying to "Change the Culture"

Harvard Business Review

When people aren't achieving what they should be achieving and things aren't going the way they should be — and if senior managers can't pin the blame on some specific issue — they often declare: "We have to change the culture around here."

Not many of them feel they know how to do that, so an army of consultants has obliged by creating processes for help. Most of these experts recommend beginning with a diagnosis of the present culture. After the diagnosis you need to get clear about where you want to head. That's another piece of work. Then you have to plan how you are going to get there.

Finally, when you are ready to get moving, the consultants are happy to jump aboard to help implement a multitude of programs — training, re-organization, systems redesign, and communications campaigns. A Google search on the term "organizational culture change programs" yields 273,000,000 entries.

The total effort generated by these processes is guaranteed to be complex and to cost huge amounts of time, money and effort. Some of these interventions may prove useful at an individual level, but sweeping, large-scale culture change efforts rarely cure those aspects of culture that were so frustrating in the first place.

There is another way.

One reason these efforts are disappointing is that companies are trying to transform a whole lot of cultural dynamics all at once. We've found that managers get better results when they start with a few smaller successes, which then provide a basis for expanding. Start with one problem — or a few. Get some people to plan a couple of modest experiments to make progress on that issue, with guidance on the kinds of innovation you'd like to see. Build in some learning on the cultural issues that need to change. Try it out. Pay careful attention to what works and how. Incorporate the successful ideas into subsequent steps.

Public Service of New Hampshire, the state's electric utility, provides an example: the company's managers were focused almost exclusively on immediate issues (vs. strategic ones) and on their own jobs (rather than co-functional collaboration). Since the company was facing some major strategic decisions changing this culture was urgent. Instead of big, complex planning steps they began by working on two important performance challenges. The first was getting electric service back more quickly after an outage. The second was maximizing the productivity of maintenance crews (for example, ensuring that when a work team traveled to a site, the necessary preparations had been carried out). As these projects achieved their goals, new projects, aimed at more strategic issues, were launched. As their people displayed the capacity to accomplish more, senior management set more ambitious strategic goals.

After a number of months of this accelerating progress, the company president observed, "Success has pushed out our strategic horizon. As we have empowered people to set directions and get results, they have developed a new level of self-confidence."

In another example, when Patrick O'Sullivan took over as the sixth CEO in as many years at the Eagle Star Insurance Company in the UK, the company was losing huge amounts of money — a product of its growth-at-any-cost approach. Managers, in denial, were passively waiting for a turnaround. O'Sullivan began by bringing together 50 claims people from a number of branches in a GE Workout-style session. He told them their task was to reduce $10 million in claims payments in 100 days. They developed recommendations which were approved immediately, and teams were formed and given the job of putting the ideas to work.

By the end of the 100 days the $10 million was almost reached. A second round of Workout events was held to define and launch additional projects. By the end of six months several hundred claims people were at work on such projects. With this momentum in claims, O'Sullivan gathered the top 150 managers across the company and got most of them started on improvement projects in their own areas. And he kept such activity going for the next four years — during which time the company was acquired and re-named "Zurich U.K."

By then the bottom line had improved by over $100 million, and it had become a fast-moving, high-performance company.

In both cases, major culture change happened in the course of the incremental pursuit of better operations — with no proclamations, mission statements, or debates about "what we mean by culture change." Senior management does have to provide some overall guidance in order to knit together the individual strands of progress, but the energy, the momentum, and the experimental ingenuity occur in the individual thrusts.

The moral of the story is that a company need never sink resources into "culture change" programs. If they keep advancing an increasing number of performance improvements that empower their people — and if they distill and exploit the learning from their achievements — they'll wake up one day and discover that they are working in a radically new culture.

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.