leading culture change in global organizations part ii crossing borders
DESCRIPTION
Leading Culture Change in Global OrganizationsPart IICrossing BordersTRANSCRIPT
Webcast Series:Part II
Crossing
Borders
Daniel Denison
Denison ConsultingAnn Arbor, Michigan
IMD Business SchoolLausanne, Switzerland
Daniel Denison’s newest book illuminates the cultural dynamics firms need to manage in order to remain competitive, including:
• Supporting the front line• Creating strategic alignment• Creating one culture out of many• Exporting culture change• Building a global business in an
emerging market• Building a global business from an
emerging market
“A milestone in the culture studies arena.”
-Edgar H. Schein
Available June 26, 2012!
Leading Culture Change in Global Organizations:Special 3-Part Webinar Series
Part I: Getting Your Own House In OrderMay 31, 2012 11:00 am – 12:00 pm EDTThis webcast will focus on Supporting the Front Line and Creating Strategic Alignment by exploring successful change initiatives.
Part II: Crossing BordersJune 28, 2012 11:00 am - 12:00 pm EDTThis webcast explores the challenges companies face in ’Crossing Borders’ to build effective cultures.
Part III: Emerging MarketsJuly 19, 2012 11:00 am - 12:00 pm EDTPart III of this webinar series examines the challenges — and unique opportunities — of implementing culture change in an increasingly relevant context: Emerging Markets.
What Is It All About?
Supporting the Front Line
Domino’s Pizza
Creating Strategic Alignment
”DeutscheTech” & Swiss Re
Creating One Culture Out of Many
“Polar Bank”
Exporting Culture Change Across National Boundaries
”GT Automotive”
Building a Global Business in an Emerging Market
GE Healthcare China
Building a Global Business from an Emerging Market
Vale
Preserve&
Strengthen
Invent&
Perfect
Unlearn&
Leave Behind
Rethink&
Try Again
Good
Bad
Old New
Changing CultureBy Changing Rituals, Habits & Routines
Lessons SurvivalCulture
Underlying Principles
Visible Symbols
Culture Reflects the Lessons
Learned Over Time
The Rain Dance
The Cargo Cult
Sacred Cows Make the Best Burgers
Mark Twain
How Habits Work
Cue Reward
Routine
Charles Duhigg, The Power of Habit
Charles Duhigg, The Power of Habit
Brain Activity in Rats
Brain Activity in Rats: The Learning Phase
Cue RewardRoutine
Charles Duhigg, The Power of Habit
Brain Activity in Rats: The Routine
Cue RewardRoutine
Charles Duhigg, The Power of Habit
Run straight, hang a left, eat the chocolate!
Tacit Knowledge
It got so bad they would bring dummies to the parking lots, dress them like managers, and burn them in effigy. “Alcoa was not a happy family. It was like the Charles Manson family, but with the addition of molten metal.”
O’Neill picked safety as one thing that unions and executives could agree on. Zero injuries. Injuries must be reported to the CEO within 24 hours.
“We killed this man. It’s my failure of leadership. I caused his death. And it is the failure of all of you in the chain of command”
Once you see everything as a bunch of habits, it’s like someone gave you a flashlight and a crowbar and you can get to work.
Paul O’Neill at Alcoa:Identifying Keystone Habits
Polar Bank
• Three entities: retail, project finance and private banking
• Three countries: Sweden, Norway and Denmark
• Industry that is consolidating
• You want to control your destiny
• One strong, synergistic culture will help you achieve that
Polar Bank
2004 Culture Survey Results
• You are the CEO of Polar Bank
• The 2004 results are your results.
• You want the retail, project finance and private banking entities to act as one bank.
• What do you do?
Taking Action
Created Strategy workshops Debated strategy Drilled down on issues Focused on what the units could accomplish together
Involved retail managers in the debate on public project finance strategy and vice versa.
Created one board for each of the three units as well as the overall company
Communicated importance of strategy and vision Made many speeches and site visits Used metaphors and popular culture
Made Strategy Consistent Acquisition Agreed on Polar Bank values
Ambition; Passion; and Teamwork
Creating the Polar Bank Vision
Leadership Development and Educational Initiatives Designed Leadership competencies model
Customer Orientation; Vision; Innovation; People Management; and Cross-boundary collaboration
Developed Leadership Program for senior executives with IMD Worked on their leadership skills Reflected on how to embed the leadership vision into Polar Bank
Rolled out 360-degree feedback program to support the leadership vision
Board received first feedback 450 managers have since received feedback
Innovation Set up clear innovation process and awarded first Innovation
Award in June 2006
Cascading the Vision & Strategy
Implemented a performance evaluation system that supported the vision and strategy
Included leadership development objectives with links to bonuses for the Top 100 managers.
Assessing the Impact
2006 Culture Survey Results
2004-2006Culture Survey Results
Intervene at the level of the governance structure. When you have major business units (BU) with strong and unique cultures, temporarily making their identical facilitates the transmission of consistent messages about the new strategy and culture.
Engage the different units actively in each other’s strategy development process. When striving to achieve one overall company culture, it is necessary that the different business units understand each others’ strategies
Institute a job rotation process. Spreading best practices and building connections across the BUs is facilitated by job rotation.
Make HR decisions on those managers who do not align with the new strategy relatively quickly. On the one hand it is important to give people a voice. On the other hand, if they are not on board with the change in a reasonable amount of time and they remain critical, it is time for them to part ways with the company.
Allocate resources in line with the new overall strategy Budget allocation is an important tool to align operational decisions with the strategy.
Align performance evaluation system to reflect new strategy. The performance evaluation system should be designed so that the behaviors that are aligned with the new, desired culture are rewarded.
Lessons Learned: Polar Bank
GT Automotive
• Over $2.9 Billion sales and 16,000 employees in 27 countries
• Three major automotive businesses
Brake & Fuel Fluid Carrying Systems Fuel Systems HVAC Fluid Carrying Systems (smallest and focus of this case)
• HVAC (Heating, Ventilation & Air Conditioning): 3000 employees
$200 million sales Over 95% sales in NA and EU Small presence in SA and new presence in Asia Case A: Transforming a Corporate Culture (North America) Case B: Building a Global Team (Europe)
GT Automotive
• S&H Fabrication (HVAC) was acquired by GT in 1998
• Culture change initiated in 2003
• New VP & General Mgr. (ninth leader in 5 yrs.)
• Feedback from long service (over 15 yr.) employees
Innovative and entrepreneurial culture of S&H replaced by slow, bureaucratic structure of TI Automotive
Management not interested in HVAC Frustrated with implementing TI procedures and TI personnel
would not listen to their concerns and recommendations “We are the red-headed step child of TI” Concerned about the future due to limited progress diversifying
the customer base (95% GM) and recent personnel reduction.
Initial North America Culture Issues
2003 Survey Results
From From Analysis to Action
Priority Structure
1. Involvement Involvement Meetings
identify issues
2. Teamwork Business Teams take action
Involvement Meetings: Initial Implementation
• Involved most salaried employees in North America
• First Meeting
• Reviewed Survey Results: Identified top 3 improvements and specific actions to support
• TOP 3: Vision, Strategy, Change
• Defined initial HVAC Vision
• Second Meeting
• Status report on Denison improvement progress
• Reviewed HVAC Strategy and defined revisions
• Defined HVAC objectives for following year
Business Teams
• Cross-functional teams defined and empowered to support our HVAC Vision.
• Two types of teams exist:• Customer teams: regional and/or global (Ford, GM, Chrysler,…)• Non-customer / support teams: regional and/or global (Purchasing, Technology)
• Business teams drive final definition and implementation of HVAC strategies, priorities and supporting objectives
• Teams openly share information within their team and, where appropriate, across the regional / global organization
• Business teams possess complete responsibility and authority to constructively complete their objectives
• Business teams clearly identify when management support is necessary
2003 2004
2003-2004 Survey ResultsHVAC North America
Building A Global Team
2004 European Survey Results
European Survey Results2004-2005
• Initiation of team structures (business teams)
• Alignment of vision, strategy, objectives & rewards
• Implementation of Denison survey & formal action planning
• Involvement meetings & business team meetings
• Establishment of extensive capability development system
• Extensive reward and recognition systems
• Regular communication and team activities
Common Themes For Culture ChangeNorth America & Europe
www.LeadingCultureChange.com
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Leading Culture Change in Global Organizations:
Special 3-Part Webinar SeriesPart I: Getting Your Own House In OrderMay 31, 2012 11:00 am – 12:00 pm EDTThis webcast will focus on Supporting the Front Line and Creating Strategic Alignment by exploring successful change initiatives.
Part II: Crossing BordersJune 28, 2012 11:00 am - 12:00 pm EDTThis webcast explores the challenges companies face in ’Crossing Borders’ to build effective cultures.
Part III: Emerging MarketsJuly 19, 2012 11:00 am - 12:00 pm EDTPart III of this webinar series examines the challenges — and unique opportunities — of implementing culture change in an increasingly relevant context: Emerging Markets.