A Different Perspective on Culture Change - Part I

By Dr. Ted Marra

21 September

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 ownership for 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 visi on 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)

o 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?

o 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

o 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?

o Help me understand how my action can positively or negatively impact the external

customer

o How can I be a ‘change agent’ to better support the process?

o 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.

A Different Perspective on Culture Change - Part II

By Dr. Ted Marra

1 October

For those readers of Part I and possibly some new readers as well, I hope that this article continues

to add value and provide a different perspective – one through the eyes of a frontline employee.

I believe it is worth noting some of the activities which I have found senior executives need to

engage in beyond those already stated in Part I which can contribute to making this change process

successful.

In Steps #1 and #2 especially, senior executives should act like ‘missionaries’ going out into the far

corners of their organisation converting unbelievers. Whether this is through a travelling road show

approach where each executive must give a prepared presentation on what is happening, why it is

happening (e.g., need) and how the people and the organisation benefit as well as an open and

honest 2-way dialogue with employees or there are ‘town hall’ meetings where large groups of

employees come together held at various locations and times. If the organisation operates on 2-3

shifts, executives need to be out there at whatever time of day or night is necessary to engage

people and let them know that management is serious and committed 100%. Use of the intranet

and setting up messages (words or pictures) for use as screen savers all help – some may be from the

CEO and others.

If the approach suggested in Part I regarding establishing Domain Decision Councils, one Council

being related to ‘Organisational change – adaptation, learning, creativity and innovation, at least

one of the Council members should be the Sponsor and or facilitator/coach for the Strategic

Business Improvement (or Change) Team which supports the Council . There may be more than

one SBIT or SBCT.

In Part I we discussed the first three Steps I have observed in change programs. I will continue with

the remaining steps and also offer an example from a past client.

So, in Part I we discussed the following Steps:

Hear the words

See things happen

Understand my role

The unfortunate fact, in my experience, has been that management has spent too little time on

helping their people to understand their roles – often leaving them somewhat in a state of

uncertainty, leading them to think of this once again as ‘the program of the month’ and even if it

goes ahead, not really being committed to it.

In any change program it is critical that the old ‘feet, head, heart’ model be employed – begun many

years ago at Xerox and Corning among others. In the past, as we know – and still far too often today,

the ‘3C’s’ of management still prevail – command, control and coordinate. We, management in our

infinite wisdom, will tell you what to do, when to do, how to do it and who to do it with and we will

watch over you like policemen or policewomen to catch you doing something wrong. Obviously that

approach stopped working a hundred years ago but is kept alive by those senior executives among

Collins ‘Level I and Level II’ executives from his book ‘Good to Great’ or Senge’s ‘unconscious

incompetent’ management in his book ‘The Learning Organisation’. Focus on just obedience,

diligence and expertise was not enough.

Some years ago, a few more enlightened senior executives realised that their people might add more

value, increase their creative contributions to the success of the organisation and have stronger

commitment and motivation if they did more than ‘just bark orders’ which caused employees feet to

move or make them jump, more out of fear than respect.

So, they began the transformation to ‘getting into the head’ of their people – to explain why they

are doing it – its importance to the organisation and what’s in it for them the employee (WIIFM).

They were right.

Then the ‘eureka’ came. Some of these more enlightened senior executives thought that more

energy and passion – greater motivation and creativity could come by ‘engagement’ – creating a

stronger ‘emotional attachment’ of their people to the organisation and what it stands for. It is only

by getting to ‘heart’ of the matter – and their people that this can be achieved.

While digressing slightly with the above discussion, it helps to highlight why change in many

organisations only occurs when there is crisis as opposed to occurring on a continuous basis and why,

even in a crisis situation, successful execution is in the 20-40% maximum range – usually at the lower

end.

So, what then are the next Steps from the frontline perspective? Let’s have a look:

Step #4: Management builds the trust and capability of frontline employees

Quite frankly, another reason such a high percentage of change programs fail is that often this Step is

either left out or minimised – that is, management does the nominal necessary in preparing their

people often because of cost considerations or they take employees for granted or are just simply

clueless of the need – I mean, what are we paying our employees for anyway? If they can’t do their

job, then get rid of them! They are just ‘tools’ to get a job done. So they set their employees up for

‘failure’ – it is never a failure of leadership – just the people in the organisation. Wouldn’t life be

wonderful – simple, easy if it wasn’t for our people screwing up all the time they say!

This is probably the single most critical Step in the process from a people perspective. It is the one

which, through senior management’s actions, clearly communicates whether this change program

is real or not and whether they, the employee are viewed as an asset or a tool by the degree to

which leadership invests in them.

It is an absolute fact that trust is built on clear, 2-way, regular (frequent) open and honest

communication at all levels – transparency – the sharing of all relevant information between

management and employees. While that is not the only factor that contributes to building and

maintaining trust, it is probably near the top of the list. You can add others as I could, but won’t

digress further at the moment.

Here are some of things frontline employees are looking for – hoping for in this Step:

Show me I am valued – not just a tool

o Invest in me – training and development, coaching, support and more as appropriate

Provide me with the knowledge, skills and development I need to be

successful and to contribute to my full potential in helping this change

program be successful

Engage me and ensure I am involved/participating throughout

o Show me that we are ‘all one team’ working toward a common purpose to make this

organisation more successful and a better place to work

Communicate with me (see above)

o Make sure the messages are clear and mutually reinforcing

Include celebrations of successes and recognition

Win my heart and mind

Set my performance expectations

o Ensure all Human Resource systems (recognition, performance evaluation, job

descriptions, reward system) are all aligned to reinforce the behaviors that lead to

mutual success. Showing appreciation too goes a long way

Make me confident that this is not just another in a long line of initiatives which will pass

quickly – a part of the ‘program of the month’ series

Once again, what I have seen is that many organisations, as I have said, either skip this step or do a

sub-optimal job with it. Instead, they ‘rush to accountability’. A big mistake and one that can

torpedo a change effort as can the setting of unrealistic targets – especially in terms of time limits

even more than the tasks themselves. Change takes time – needs to be well thought out or planned

and then even better executed. You can’t rush change or something, I guarantee, will go wrong.

What management must do relative to support is empower employees to do what is in the best

interest of the organisation – empowerment will only work in an organisation where there is trust

and where the old ‘command, control and coordinate’ way of doing business is dead and buried.

Employees must feel confident in their own capability and in taking initiative without fear. It is only

when the above things are done and then experienced and acknowledged by the people of the

organisation that they willingly take ‘ownership’ for what needs to be done and happily get it done.

During this time and the earlier Steps, leadership needs to be practicing ‘MBWA+’ – you remember

how revolutionary ‘management by walking around’ was when Tom Peters and Robert Waterman,

right introduced it? I mean at that point in time, 1982, about the only way an employee knew their

senior management was by seeing pictures hanging on the walls in the organisation’s reception area

or the newspaper or internal magazines. If a senior executive came into an office and stood by an

employee, the employee would have no earthly knowledge of who the person was even if it was the

CEO!

You notice the ‘+’ I added above to MBWA. That simply means that leadership today must ‘walk

around with a purpose in mind, namely to engage employees – to inspire, to listen and learn and act

on what they hear, find out the barriers getting in employees ways of contributing to their full

potential and eliminating them while at the same time strengthening the relationship between

management and the employees. This is what starts to get to ‘the heart of the matter’.

Yet it is surprising how challenging this ‘MBWA+’ is for senior executives! I worked with the top

partner of American Express in the Balkans for over a year conducting regular weekly strategic

learning sessions of 2-3 hours for the CEO and Management Committee. One of their homework

assignments was to form pairs, go out into a part of the organisation they knew little or nothing

about and sit and talk to a random group of employees about how it felt to work there, the vision of

the organisation – did the employees understand it, was it inspiring, did they know how they could

contribute to achieving it and also any other suggestions for organisational performance

improvement. They were scared to death! I told them prior to this that of all the leadership teams I

had worked with around the globe, I would put them in the top 25%, yet their confidence, their

experience level in going out and engaging their employees was incredibly low when it should have

been second nature to them and something enjoyable – not frightening!

It is not unreasonable – in fact, it is desirable, if senior executives deliver some of the

training/learning and development programs needed for team leaders, supervisors, first line

managers or middle managers. Middle management is often called the ‘great frozen layer’ and

unless senior management starts asking them different and better questions and working with them

– engaging them, they will act as an inhibitor to the process as well as being unsure as to their role or

competencies needed in pulling it off. These individuals are critical to success.

Throughout the ‘change’ process, I suggest taking ‘pulsing surveys’. This might mean every month or

quarter randomly selecting 25% of the workforce from all functions and levels – a true random

sample and asking a short series of 5-7 questions. These questions might include such things as (1)

Do you feel you have a growing understanding of the importance of this change to the organisation?;

(2) Do you feel that the change process is working, that things that need to change really are

changing?; (3) Do you feel you have had the opportunity to have your voice heard and to be involved

in the process?; (4) Do you believe that once this change process is completed, the organisation will

be a better place to work (or more successful)?; (5) How do you feel about working in th is

organisation now compared to before this change process began? Now, these are not intended to be

just ‘yes/no’ questions even though what I have shared indicates that. These need to be rephrased

and other open-ended questions could be asked including what else could be done or should be

done or what employees see as opportunities for improvement or ideas for innovation.

Step #5: Frontline employees are assigned and accept accountability – ownership occurs

Now, after building capability and strengthening trust through investing in people, they are ready to

accept accountability willingly – ready and willing to reciprocate and take initiative.

It is here where the following types of actions should be observed by frontline employees:

Defining the specifics of what I must do differently and/or better starting now to ensure the

program is a success

o It is critical that job descriptions, performance evaluations, recognition and reward

criteria be aligned. I have seen so many organisations where there is mass

confusion. The job description says one thing, but the performance evaluation is on

key job elements which are not the same. These criteria are not the same as those

used for recognition or reward.

o I have been in so many organisations where I have asked employees, ‘If your boss

came up to you, patted you on the back and thanked you for doing a great job,

would you what you had done? Could you repeat it so you could get another ‘pat on

the back’ as an acknowledgement? The answer has too often been ‘no’.

o Knowing what I am being measured on as an employee is critical to their success –

no secrets, no sin of omission – just transparency

The measurement system – indeed the measures or KPI’s need to be

credible in the eyes of the employees – something that if they can’t control it

directly at least they have significant influence on. You can’t have them

responsible for EBIT or market share!

o There needs to be a clear linkage between the performance measurement system

and the HR systems – performance evaluation, recognition and reward as a minimum

Emphasis must also be on a balance between achieving the results or outcomes desired and

‘how’ those results or outcomes were achieved. Leaving a trail of dead bodies behind in the

zeal to attain targets is unacceptable! The collateral damage is too great. However, doing it

through exhibiting behaviours consistent with the values/beliefs of the organisation is the

key here. Role models get the maximum rewards – these are individuals who not only

achieve their objectives but do so by living the values of the organisation such as teamwork,

respect for the individual or others which may be in place.

The performance evaluation session should be used for development purposes

o Management at every level should be acting as teachers and coaches helping

employees to be more successful – giving the support needed – listening for any

‘cries for help’ – reading between the lines

o Succession planning is also important such as Rothwell’s strategic succession

approach. How well employees respond to change, how well they act as ‘change

agents’ themselves and show personal leadership must be taken into consideration

in identifying high potential people and ensuring their succession into the right

positions in the organisation.

It must be that accountability extends upward to include senior management and the Domain

Decision Council discussed earlier as one of these Councils maybe the ‘Renewal ’ Council where I

define renewal in my book, ‘The Wisdom Chronicles: Competing to Win’ (http://www.amazon.com)

as the seamless integration of learning, adaptation, creativity and innovation – it is the ‘gene’ in the

organisation’s DNA which enables it to effectively and efficiently change continuously through time –

keeping its business model fresh and enduring resulting in continued superior results which set the

standard for others to follow. It is also one of the three elements which I believe contributes to the

anti-fragility of an organisation as discussed by Taleb and also by my friend and colleague, Dr. Tony

Bendell.

Step #6: Frontline employees make behaviors and new practices a part of daily work life

It is here where senior management as well as all key individuals whether team leaders, supervisors,

first line managers, middle managers and high-potential people need to ensure that the changes

from this program are ‘embedded’ in the organisation – that they are embedded in the minds of

employees and become ‘just the way we do business around here’.

Again, constant vigilance is a key. Relentless reinforcement is a key by senior management. Senior

management leading by example is a key. Aligning human resource systems especially recognition,

performance evaluation and rewards at all levels is key to reinforcing the desired behaviours.

Change needs to become a way of life and something that employees do not fear, but embrace as it

provides them with opportunities to become involved, to learn and to grow as well. These are the

‘core’ elements employees are looking for (see my Article: What Employees Really Want).

This final stage also needs to be comprehended in the change strategy execution process. The

amount of time required to embed the change is clearly dependent on the size of the organisation

and how far-flung it is – e.g., local national, regional, global. It is also dependent upon people

embracing the changes more quickly or more slowly depending upon such thi ngs as trust, respect

and behaviors – moving up the learning curve. Ultimately people reach Peter Senge’s 4th stage of

‘unconscious competence’.

But the fact is that change must be continuous – not just a ‘one-off’ activity. This is where ‘renewal’

comes into play, but very few organisations have learned this. Examples include P&G, Apple,

Amazon, Nordstrom and a few select others.

Here is an example from a past client of mine. I went into this organisation and conducted in -depth

interviews with senior management, small group interviews with middle management and others,

and focus groups with frontline employees. From that I was able to create a ‘current state cultural

profile’ shown on the left and work with senior management and others to create a ‘des ired future

state’ which is what you see on the right. This was done at the outset of the change process among

other things to help everyone see where we were and where we needed to go. The strategy

developed were the steps for getting there (following the 6 steps above):

and also

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.