For organizations that want to become agile, cultural change is not an option but a necessity.
If you don’t understand culture and what culture is, how do you expect to change it?
Kicking off the Don’t Panic series, Dave Sharrock and Melissa Boggs will provide a definition of culture, explain the purpose that culture serves, and share a number of stories about how culture can be changed through storytelling.
Melissa Boggs (MBO): A lot of times people approach us saying, “I can’t change the culture. I’m one person amongst tens of thousands and I can’t make that change.”
Because “culture” has become such a buzzword that we see in every job description and it’s what every company talks about, this has caused us to over-inflate the idea of what culture is. At the end of the day, culture is our values that are demonstrated by our traditions, our habits, and our behaviours.
MBO: When I say Traditions, it's what we celebrate and how we celebrate, which is really not that complicated.
Dave Sharrock (DSH): One of the organizations that I worked with and in fact I was there 6 weeks ago, had a very interesting topic where they wanted all their departments to start talking to one another and start working together. So they instituted a tradition whereby the third Thursday of every month, one of the departments would host a meal or a break in the afternoon.
The particular day that I was there and I still remember this one because it’s a very Vancouver thing, they had sushi and ice cream which I’m still not sure whether or not I’d highly recommend that as a combination, but this certainly brought the organization together.
MBO: It’s memorable! That’s the thing with traditions; they continue on and people remember them.
The next thing is Habits. Think of habits as status reports. They are things that we do because we have always done them - whether they are good, bad, or indifferent. And with status reports, it’s not just the fact that we do status reports but the habit is actually what we report on, how we report and why. Sometimes it’s simply because we’ve always done it that way.
Lastly, we have our Behaviours. Our behaviours are water cooler conversations - what we say and how often we say. Your behaviour can include talking about your mission or purpose all the time. But ultimately, behaviour is how we do things around here.
So culture can be changed. It’s a matter of realizing what it is - knowing what your traditions, habits, and behaviours are. Then deciding if those are helpful or if they need to be changed in order for you to be more agile.
MBO: I love this picture because essentially what you have are two houses. Functionally, they’re the same so they both have rooms, windows, and a roof. However, they’re obviously very different. They tell different stories to the world. So if these houses happen to be offices, they would tell very different stories about what the traditions, habits and behaviours are and they would require different habits to take care of them as well.
DSH: I love this picture as well because it highlights the power of culture in the sense that culture attracts different types of people. There are some people in the audience today who would think that the picture on the right looks like a great house to live in, and they would want to be there and own that house. Whereas there are others who would absolutely not enjoy living in that house but would very much enjoy the house on the left side.
So one thing about culture is how it allows us to attract the right kind of people who want to be working with us opposed to having a random lottery of people coming through the door and trying to figure that out over time.
DSH: Let’s kick into some stories on how culture changes. One of the stories I lean on quite heavily is Ford’s turnaround during the 2006 to 2014 period. The picture you see now is Alan Mulally who was brought into Ford as the CEO in 2006. At the time, Ford along with the other two primary car manufacturers, was very much struggling. In fact, Ford was losing $20 billion in revenue and they were struggling from quite a toxic culture.
As Alan Mulally walked in on his first day, he had to start planning the turnaround. How was he going to change an organization with hundreds of thousands employees with billions of dollars in missed targets? The beginning of it was that he started by creating an experience - a story. One of the first things that happened was that Alan Mulally met with his direct reports. The first thing he wanted to do was find out what was going on in the many different projects and initiatives taking place across the organization. In order to do that, he asked each direct report to make each report based on a red, amber, and green traffic light system.
In the first meeting, nearly every single report shown by the direct reports were green with maybe one or two yellows. At the end of the meeting, after every direct report had walked through the initiatives, Alan turned around and made only one comment. He said, “If these were all green, why is it that we’re looking at a $20 billion loss this quarter?”
We need to see what we’re really seeing. So the next meeting, the first direct report stood up and showed real statuses of their initiatives which were all in red. Bear in mind that this was an extremely toxic culture. Ford at that point, the culture was one where if you showed any weakness in your initiatives, you would get torn to pieces by your colleagues and peers in the room.
As Alan Mulally was being shown these red symbols, you could hear clapping going on in the room. You could hear clapping just coming from Mulally, and him clapping and cheering the direct reports became a story that was shared across the organization. With that one experience, this changed the mindset of that organization. They realized that people weren’t going to get torn down by showing what was really going on and that encouraged cooperation.
This was the first step in significantly changing how people managed that organization. For those of you who know the story, Alan Mulally went on to becoming incredibly successfully as Ford’s CEO. He laid a strong foundation for the company. Even after 2008, Ford was the only one out of the big three American car manufacturers that did not need a bail out and continues to be a very successful car company today.
The thing to realize is that changing culture is tough. It’s a hard thing to do and there are many things to look at. If you want to examine and understand how to change culture, I would recommend looking at John Kotter’s work on leading change.
1. Be on the lookout for the next blog post: Don’t Panic Series (Part 2): How does culture change?
2. To listen to the full webinar, click on this link: https://goo.gl/E6H4H1