Culture Change As Competitive Advantage: Strategies For Success

Corporate Cultures Book Cover

More than 30 years ago a book appeared which has stood the test of time in organizational literature and which galvanized a generation of leaders and consultants with its clear and powerful approach.  That book was Corporate Cultures by Terrence Deal and Anthony Kennedy.  Defining culture at work as simply “the way we do things around here” the authors demonstrated that this was the secret ingredient which we had all been seeking, which enabled…or totally disabled…the best strategic plans.  As famed management guru Peter Drucker stated “culture eats strategy for breakfast”.  One of the ways in which this works is that cultures create the environment in which workers choose to, or not to, engage. This in turn drives, or deprives the organization of, enormous performance benefits in terms of customer satisfaction, productivity, innovation, profitability and even worker health.

Fast forward to today, and we find few leaders who lack this knowledge, but many more who pay lip service to the importance of culture but who fail to act on it.  Why is this?

–changing culture is easy to read or talk about but far more difficult to implement;  part of the reason for this is that the most effective, powerful cultures involve giving up power and control

–certain personalities are loathe to do this, for example those whose ego drives them…and perhaps, through them, their whole organization.

This is why, when leaders ask what they need to do to create a more effective culture, I tell them that getting to know themselves at a deeper level is step 1, it will raise their emotional intelligence and form the basis of change.   Secondly, instead of implementing a laundry list of “things to do on Monday morning” to change the culture, that they instead take a look at everything the organization does and put it through what I call the BEST test:

is what we are doing Balanced, for example between cooperation and competition? This alone can totally change a culture:  witness Microsoft’s disastrous “stack ranking” (firing of the bottom 10% of each group each year), which pits people against each other, destroys cooperation and morale and results in a flatlined stock for over a decade.

–are our practices “Engagement Friendly”, for example do we treat people fairly?  Fairness is the bedrock of any successful work culture, but it is misunderstood:  nothing about it means equality of outcome, only equality of opportunity.  This means banishing favoritism, nepotism and related behavior from “the way we do things” and focusing only on performance.

–is what we are doing Sustainable?  For example do we have a short term focus rather than investing for the long term?  Do we act unethically?   Clearly, lack of sustainability is a fatal flaw in any culture, yet too many organizations act this way, as the low tide of the recent financial Crash clearly demonstrated.

–is what are doing Trackable?  Any journey such as one whose goal is to improve culture at work must track its starting point and milestones along the way.  How else will we know whether we are reaching our goals, either in the organization as a whole or in individual parts?  Surveys of the whole workforce are the powerful tool which successful cultures use to track themselves.  Don’t believe that you can make or sustain these kinds of changes without such a tracking mechanism.  Ask Google, they do this all the time.

Culture change is not for the faint of heart, or for those whose ego drives them.  We need leaders who have the courage to step beyond themselves and commit to the good of all stakeholders, from their own workers to society as a whole.  Those who do, such as Whole Foods and BMW, enjoy great success as their reward.  The future belongs to organizations which make orienting their cultures in this direction central to their mission.

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