Changing Organizational Culture

Everything we’ve learned about reengineering drives towards one solid conclusion: The rules of governance for effective business enterprises today are being determined by their culture, not their organizational structure.
In: Article, Culture, Leadership

What does the term “organizational culture” mean? Why do business organizations seek to change their culture? Does culture become so ingrained that it is impossible to change? And, perhaps most importantly, if it is best, how do you change a culture?

The answers to these questions may bring challenging issues for leaders to wrestle with.

The various dictionary definitions of the word “culture” are interesting. Some meanings relate to development, growth, and improvement within an environment (such as the growth of microorganisms in a specially prepared, nourishing fluid). Here is the definition from Webster’s relating to organizations: “the ideas, customs, skills, arts, etc. of a people or a group, that are transferred, communicated, or passed along, as in or to succeeding generations.” It would not seem to be improper to infer that healthy organizational cultures can be defined as nourishing environments that help people to develop, grow, and improve.

This inference is not incompatible with Robert Greenleaf’s criteria for judging the effectiveness of servant leaders.

“The best test, and difficult to administer, is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged in society; will they benefit, or, at least, not be further deprived?”

Is your culture nourishing so that your people grow to reach their full potential?

The importance of cultural influences, for good and bad, in an organizational setting cannot be underestimated. Consider what Tom Peters and Robert Waterman had to say about culture in their blockbuster book, In Search of Excellence.

Without exception, the dominance and coherence of culture proved to be an essential quality of the excellent companies. Moreover, the stronger the culture and the more it was directed toward the marketplace, the less need was there for policy manuals, organization charts, or detailed procedures and rules. In these companies, people way down the line know what they are supposed to do in most situations because the handful of guiding values is crystal clear.

James Champy, who co-authored the 2 million-seller book, Reengineering the Corporation, admitted in the follow-up, Reengineering Management, that the movement he helped start is struggling. “The results are in: Reengineering works—up to a point. The obstacle is management. The only way we’re going to deliver on the full promise of reengineering is to start reengineering management—by reengineering ourselves.” Here is how Champy views the importance of culture.

Everything we’ve learned about reengineering drives towards one solid conclusion: The rules of governance (and self-governance) for effective business enterprises today are being determined by their culture, not their organizational structure.

Why do some businesses strive to change their corporate culture?

At the fundamental level, the answer is very simple: businesses change because they have to—they are forced to. They have to continually change in order to make enough profit to stay in business in a competitive environment. Over time, profit provides a level of accountability that is pretty clear-cut. In terms of changing culture, many businesses have learned that they simply can not compete in a constantly changing, global marketplace by dealing with people (employees and customers) under the same top-down, command-and-control approaches learned from the military. Notice what Champy says:

In the days of Smooth Sailing, corporate culture was dictated by two factors: the hierarchical structure that corporations inherited and the modern myth of the organizational “machine.” The culture dictated by these factors was basically one of obedience—to the imperatives of a chain of command and to the demands of a highly controlled task.

Is command-and-control the most nourishing culture? Perhaps it would be beneficial to think about the typical differences between command & control and empowering cultures. A few of these are listed in the table that follows.

Command & Control vs. Empowering

Organizational Chart: Pyramid with many layers or Flatter with few layers

View of Hierarchy: Position equals competence and privilege or Necessary for coordination, but never a measure of worth or contribution

Decision making: Top-down or Shared

Responsibility & opportunities to lead: Concentrated at the top for a few or Delegated to those actually doing the work

Use of power & authority: Absolute based on position or Relative based on situation

Accountability: To bosses or To the customer & results

Expectation of bosses: Unquestioned obedience or Mature, self-management

Flow of information: One-way, downward or Both ways

Levels of Disclosure: Secretive, info shared only as absolutely necessary or Complete openness

Purpose of controls: Manage behavior to eliminate mistakes (external locus) or Safeguard assets while providing constraints for initiative (internal locus)

Operational focus: Policies & procedures or Vision & mission

Individual creativity & initiative: Discouraged or Cultivated

Input from followers (empathetic listening): Unnecessary and probably indicative of attitudinal problems or Absolutely necessary for effective leadership

Problems & mistakes: Indicative of systemic flaws needing more control or Evidence of trying; opportunities to learn & grow

Employees: Overhead to be managed or Precious resource to be developed

Best measure of results: Numbers or Strength of relationships and numbers

Perhaps this generalized list is an oversimplification, but hopefully, you can think of contrasts to add based on your experiences. Which culture do you think incubates leaders? Which culture teaches people to think like owners? It may be time for an honest self-assessment of your business.

  • Is there really shared decision-making?
  • Is all input genuinely sought, valued, and given due consideration?
  • Is respectful questioning of administrative decisions seen as a healthy opportunity to learn from different perspectives?
  • Are responsibility and authority delegated downward and outward?
  • Are opportunities for more people to lead being systematically engineered? Are people learning to be accountable and responsible for their own actions? Are all people growing and reaching their full potential?
  • Do people in positions of authority still see it as their responsibility to manage and control others or to coach and mentor, too?
  • Are people empowered and free to use their initiative to the point that mistakes are expected and welcomed as learning opportunities? Or are mistakes the privilege of overseers only?
  • Are compensation and rewards tied to performance?

Are there other questions you would ask yourself?

How do you change an organization’s culture?

If it is determined that there should be an overall change in methods of doing business, who has to make it happen? Should it be a “grassroots” movement, the efforts of middle managers, or a special project for a task force? Another quote from Champy supports what I have learned from experience:

There is no doubt in my mind, or in the mind of any other re-engineer, that cultural change has to begin with enterprise managers. They must drive the change in person, all the time—teaching it, doing it, living it. That’s what it takes to bring about the revolution required here—a revolution, remember, in the way people connect to each other and to their work; a revolution in the significance of what they do and are.

Change initiatives are the responsibility of the key leaders in an organization. There simply is no other way to change the culture. If you want to upgrade your culture—you have to lead the way; this one cannot be delegated.

There are some conclusions we can draw together.

  1. All leaders must champion a complete cultural change.

Leaders must do three things:

  1. Lavishly communicate new expectations with visionary clarity. You have to say it until you think talking about it again will make you throw up—and then say it again.
  2. Change certain decision-making and delegating processes to align with the desired culture.
  3. Teach others, through formal classes and workshops—and by example—how to live the new way of doing business.
  4. This process will take time and continuous reinforcement. Changing culture is not a flavor of the month.

Finally, we would be less than candid with ourselves if we did not acknowledge that some do not think change is necessary. Many people simply will not change unless they see that change will benefit them personally.

It is important to move forward while taking care not to be disrespectful of the past or lacking in sensitivity to the paradigms (or world-views) through which others may perceive the same thing based on their training and experiences.

So how do we convince people it is in their best interest and the best interest of the organization to change? I have a few suggestions with the hope that they prompt you to add more.

  1. Showcase real-world examples of successful organizations that live the desired culture. List the short and long-term benefits enjoyed by the organization and its members.
  2. Document cases where the organizational approach in your organization has not squared with the principles of an empowering, nourishing culture.
  3. Explain in detail how the negative effect on trust, morale, growth, and development—in short, the relationship with other people—has hurt your business.
  4. Contrast the approaches and describe the better way and the anticipated benefits.

There is a lot of work in this educational, case-study approach. But to do otherwise is to risk failure at a crucial juncture.

Successful organizations do work to change their culture for the better. So can you.


More from The Follow Through

How You Can Help
Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to The Follow Through.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.