Vanessa Cowan

Chapter 44 XYZ Company Garrath Rosslee and Vanessa Cowan Driving change through a culture shift – the birth of the assignment 355 Painting the picture of ‘where we are now’ 356 Rocking the boat – initiating a culture shift 356 Rallying support before the event 357 Using a bottom-up values approach 357 Building a behavioural blueprint 358 Pulling all the pieces together – integrating and aligning 358 A burning platform 358 Lack of a compelling vision and clear direction 358 Insufficient leadership drive 359 Talking the talk without walking it 359 Leadership communication and change skills 360 Structural and above-the-surface culture inhibitors 360 A verdict 360 Driving change through a culture shift – the birth of the assignment TheRorganisationRpresentedRitselfRasR‘young’RandR‘vibey’;RitRpresentedRaRbrandRthatRcreatedRtheR impressionRofRinnovationRandRcreativity.RAtRleastRthatRwasRtheRpictureRonRtheRoutside.RInside,R thereRwasRaRdifferentRstoryRtoRbeRtold: RR ‘ThereRisRnoRpersonalRcareRandRrespectRforRindividuals.’ RR ‘PeopleRwatchRwhatRtheyRsayRtoRwhomRasRthereRisRnoRtrust.’ RR ‘PeopleRareRoftenRanRafterthought.’ 355 Turnaround management ‘Company goals are a blur.’ RR ‘Mistakes are not tolerated.’ RR ‘If we fight it, we will lose.’ RR ‘There is no leadership transparency and honesty.’ RR ‘People don’t feel like they know management.’ These were some of the comments made by people from all areas of the business. Beneath the surface, there was a secondary process brewing, and it all boiled down to people. Morale was at its lowest; you could have sliced through the heart of the business without evoking a reaction. The once-courageous spirit had been dampened, leaving people depleted of energy and generally despondent. The business had not made money in four years and its parent organisation was growing impatient. It was tired of pumping cash into a ‘bottomless pit’ to quote a non-executive director. A change team – as part of a larger turnaround assignment – was appointed to identify and implement business improvement opportunities across the entire organisation. The organisation clearly needed to move quickly from start-up phase to maturity and growth. This was accompanied by cries from its owners for results on the bottom line and so the transition this required indicated change of a turnaround nature. Most significantly, a dramatic culture shift was needed. Only by creating a new and shared corporate reality would we see people behaving and experiencing the company in a new way. Fresh energy and an altered mindset were critical prerequisites for change. With staff turnover at an all-time high, a crisis undeniably loomed, but, in the eyes of the outsider, it was ‘work as usual’. If the ship was sinking, its passengers were either jumping overboard or turning a blind eye, going about their usual routine, duly accepting whatever fate had in store for them. RR Painting the picture of ‘where we are now’ A business-wide climate survey initiated at the beginning of the project indicated that the current culture was directive, rigid and bureaucratic. Decision making was slow, mistrust was high and there was a low external market focus. Change-readiness focus groups conducted soon after the climate survey supported these findings, indicating a generally poor experience of change in the past, little opportunity and support for growth and development, and poor leadership. Managers were felt to be ‘too far removed from what is happening on the ground’. There was also a feeling that the company was lacking direction and visionary leadership. Rocking the boat – initiating a culture shift Although the focus group findings painted a dismal picture, they provided significant input into the change implementation plan, allowing the change team to take immediate and appropriate action to change the status quo. At the same time, these findings served as a 356 XYZ Company 44 baseline point of reference for ongoing measurement of progress made during the course of the project. The finding that leadership was not living out the values of the company indicated that the values needed to be revisited. The point of departure for culture change was therefore to initiate a business-wide discussion on the most appropriate values for the company, given the urgent need for change. Rallying support before the event Before we could start the discussion on values, it was critical that everyone in the business understood and believed in the importance of values in driving behaviour and the required culture shift. The challenge lay in getting the right messages out to the entire business in a short space of time, using multiple communication channels. The change team achieved this by running a culture education campaign that created an awareness and understanding of the importance of organisational culture in building a high-performance company. We ran SMS competitions, distributed flyers depicting a culture dialogue, ensured that there was ample information available on the intranet, sent out teasers and put up posters in coffee areas. There was considerable ‘push-back’ and resistance from the business with regard to the multiple and repeated communications platforms used, but we considered this a success – the message was out there in people’s faces and difficult to ignore. The time was ripe for getting the dialogue going ... Using a bottom-up values approach After some discussion, leadership made a decision to allow the business to give input first on the most relevant values. This meant that a bottom-up approach was used to initiate the dialogue on values. Values input sessions were conducted across the business giving employees the opportunity to discuss the most appropriate values. The sessions also asked people for their input on the behaviours needed to ensure that the values were lived out and demonstrated. This process was successful in engaging and winning the support of employees. People commented that the sessions were highly interactive, fun and inclusive, and provided a sense of direction. Although there were still concerns about whether the values would really be implemented and lived out, the sign of a shift in attitude was considered a small win. Most significant, though, was the fact that the final values generated by the business came out fully in line with what the executive committee itself believed to be the most appropriate values for the business going forward. Creating trust and encouraging open conversation from the start sets the tone for future organisational performance. By inviting everyone to participate in the values sessions and taking all input into consideration, people felt included, signalling the likelihood of a greater acceptance of change further down the line. 357 Turnaround management Building a behavioural blueprint Following on the success of the values sessions, a similar approach was used to invite business input on the behaviours needed to drive the values. Using a representative sample of people across the business nominated by the employees themselves, a number of workshops were held to develop a behavioural blueprint for the business. Representatives from the business included departmental representatives as well as executive-level leadership and the CEO himself, sending the message that everyone in the business was important and that the best input is shared input, cutting across all levels of the organisation. The new CEO played a crucial role in ensuring the success of the workshops by stressing the important role that task representatives were to play in creating the behavioural blueprint. Visibility, openness and the obvious trust the CEO placed in the workshop representatives resonated well with all and set the tone for strong commitment to the task at hand. The overall bottom-up approach to culture change proved to be most effective in creating a platform for driving the desired changes in behaviour. What lesson did we learn? Trusting and believing in the people of the business invariably produces the best end result. In using a bottom-up approach, not only were employees fully engaged and included, but management expectations were surpassed as results generated came out fully in support of the requirements of the business. Pulling all the pieces together – integrating and aligning Having developed and signed off the behavioural blueprint, we began the critical work of integrating new behaviours into all HR policies and procedures, performance assessments, development plans, balanced scorecards, and all practices and programmes in the company. In short, behaviours needed to be reinforced through being aligned to all ‘ways of working’. While the bottom-up culture-change process was ultimately successful in creating the impetus for a culture shift, there were many challenges along the way. A burning platform Implementing change of this nature implies, by its very nature, significant disruption to the norm; an overhaul of strategy, structure, systems, processes, culture, behaviours and mindset. It signifies that breakthrough is needed, that the company either changes or dies. In this context, it is critical for a strong message of urgency to go out to the business, driven from top leadership and filtered down the entire organisation. Lack of a compelling vision and clear direction Change-readiness focus-group findings, as gathered at the inception of the project, indicated a resounding cry from the business for greater direction and a focused drive for meeting organisational goals. In short, there was an inconsistent and unclear view of the vision of 358 XYZ Company 44 the company and its significant purpose. There was further a lack of alignment of individual objectives to the wider objectives of the company. Failure to provide a bigger-picture view of a business breeds confusion, a lack of understanding and meaninglessness as individuals are not able to see how their own roles contribute to the greater purpose of the business and good of society. The experience created is one of a general disconnect. With a lack of synergy comes self-preservation as individuals fight for their own survival. In creating direction during transformative change, three things must be very clear to people. First, the ‘why’ of the transformation/turnaround/transition programme, as well as the ‘why now’, must persuade people. The benefits of success and penalties for failing should be equally apparent. Second, the future or ‘where to’ for the company must be evident and exciting. Third, the ‘what’s in it for me?’ must be addressed so that everyone understands the personal benefits of change.1 Insufficient leadership drive If the urgency for change was understood by leaders in the business, there was nonetheless a prevailing attitude of denial. Leadership plays the most critical role in creating the ‘burning platform’. Contrary to popular perception, communicating openly and honestly in times of crisis invariably brings surprising results – when push comes to shove, people will rally around the common cause and work together to offset the looming danger. Placing trust in the people of your business in good times and bad has the unexpected benefit of mobilising people and driving results. Conventional organisations often hold a ‘don’t rock the boat’ philosophy, which translates as a superficial perception of everything being well, when in fact the opposite holds true. This attitude is perpetuated throughout the organisation and encourages people to shy away from making their feelings known for fear of appearing disruptive or standing out from the crowd.2 When things eventually go wrong, mistrust is rampant, morale takes a hit and it may be many years before the trust needed to drive high performance is rebuilt. Rather than shy away from creating fear and anxiety, leadership and management should recognise these emotions as natural reactions to change of a transformative or turnaround nature. They should allow people some space to mourn, while all the time acting as role models for the change, driving action, confronting the truth head-on, inspiring and mobilising everyone to come to the party and make change happen. Talking the talk without walking it In guiding the bigger, shared change, process leaders need to be involved players as well as objective, outside observers. This ability to stand back and reflect signifies an open approach where input from everyone is welcomed and people are encouraged to follow not because they are told to or because they are fearful, but because they are genuinely driven and inspired by good role models. 359 Turnaround management Leadership communication and change skills Undercommunicating is often a major reason why change efforts fail.3 Communication must be part of an ongoing process whereby two-way dialogue is practised, all available communication channels are used, the rationale behind change processes is clearly articulated and communication is expressed consistently through both words and actions. Structural and above-the-surface culture inhibitors For culture change to be successful in the long term, it must take place at two levels: the visible and the invisible, or below-the-surface, manifestations of culture. In this instance, culture shift was tackled at the invisible or most difficult level by revisiting the values and behaviours of the business. The intention was to drive a mind shift to ensure that attitudes and beliefs were lived out in support of the organisation’s vision and strategy. At the same time, above-the-surface manifestations of culture, for example structure, symbols, language used, policies and processes, needed to be brought in line with the new values and behaviours to ensure consistency, alignment and reinforcement of the right way of doing things. A verdict Driving change of a turnaround nature usually requires initiating a culture shift. Taking a bottom-up approach to culture change is successful in creating buy-in through engaging with and seeking the input of all employees. Ultimately, this works at the deepest, hidden level of culture to alter people’s beliefs and attitudes in order to create a new andR improved reality. However, the success of a culture-change intervention is contingent on numerous critical success factors. Organisational change implies that change will take place on a large scale, which is disruptive and uncomfortable for people. Without sending the message of urgency out, it remains extremely difficult to create the burning platform for change and, therefore, the impetus for obtaining movement in the organisation. At the same time, the message going out needs to be honestly and openly communicated. It is only through involving, sharing, inviting comment, diversity of opinion and talking the ‘undiscussables’ that organisations can truly build and move towards a shared vision. Before, during and following the processes of change, the importance of open, honest communication, which is effected, enacted and supported also from a managerial level, cannot be underestimated. Further critical success factors include painting a clear and impressive picture of the future reality, leadership support and the ability to model how to reach this desirable future through consistent and correct behaviours. Below-the-surface cultural change must also be supported by changes to culture at its most visible levels, for example structural change, changes to processes, policies and symbols, the language used and the stories told. 360 XYZ CompanY 44 ByR integrating,R aligningR andR reinforcingR oneR setR ofR behavioursR acrossR everyR levelR ofR theR organisation,R theR messageR sentR outR willR beR uniform,R clear,R succinctR andR supportiveR ofR theR overallRbusinessRstrategy.RItRisRthisRmessageRthatRwillRdriveRtheRdesirableRculture,RappealingR toR peopleR atR aR rationalR andR emotionalR level,R andR compellingR themR toR actR onR reachingR theR company’sRvision. ThisR articleR wasR firstR writtenR inR lateR 2006R asR theR assignmentR nearedR completion.R TheR revenuesRofRtheRbusinessRhaveRsinceRmoreRorRlessRdoubledRandREBITDARtripled. Note XYZ is a pseudonym to protect the identity of the company concerned. All information was supplied by Garrath Rosslee. Chapter 44 XYZ Company 1 R Day,RJ.RandRJung,RM.R2000.RCorporateRtransformationRwithoutRaRcrisis.RMcKinsey Quarterly,R4:116– 127.R 2 R Senge,RP.,RKleiner,RA.,RRoberts,RC.,RRoss,RR.,RRoth,RG.RandRSmith,RB.R1999.RThe Dance of Change: The Challenges of Sustaining Momentum in Learning Organisations.RLondon:RNicholasRBrealey,Rp.R241. 3 R Kotter,RJ.P.R2002.RThe Heart of Change: Real-Life Stories of How People Change Their Organisations. Boston:RHarvardRBusinessRSchoolRPress.R 361