Transformations are all the rage nowadays - Business Transformation, Agile Transformation, Digital Transformation and more. A Transformation is defined as “fundamentally changing the way we work.” One of the biggest blockers to transformation is culture. What is culture really? Why does culture sometimes do things against the self-interest of the organization? Is there anything we can do to overcome these cultural barriers?
What is culture? Culture is the mindset and behavior of an organization. We see organizations where the culture seems to cannibalize the success of the business! This was famously noted by Lou Gerstner when he took over IBM and realized that the microprocessor business was no longer financially viable. Even Mr. Gerstner as CEO struggled to change the culture. But because it's hard, doesn't mean we just give up.
Notice that when an individual moves to a different company, they usually have little trouble changing their mindset and behaviors. Why is it then so hard to change as a group?
Don’t use culture as an excuse. Think about culture simply as an indication that something is wrong. You’ll need to do some detective work to find out what’s really going on.
Which Cultural Elements no longer serve the Organization? I hear people say “We need to change the culture” or “upend the culture”. That is broad brush and not very useful. There may be elements of the culture that people are very proud of and continue to serve the organization well.
Itemize the specific cultural elements that are no longer serving the organization. For example, a common cultural element blocking Agile Transformations is “Managers commit and assign work”.
Link each cultural element to an aspirational principle that it conflicts with. Very specifically identify what new principle is blocked by the cultural element. Following the example above, if your cultural element is that managers commit and assign work, the Agile principle that is blocked might be “team commits to work”.
Prioritize. By now you probably have a big list of cultural elements and new principles that they block. Figure out which one to tackle first. Some cultural elements may actually be driving others, so tackle the drivers first.
Find out why these Cultural Elements exist. Culture develops around the values, structure, precedents, and policies in place in an organization. What is in place that is promoting or reinforcing the cultural elements? The 5 whys is a great tool for this. Simply ask “why” 5 times to get to the root of the issue.
In our example of managers committing to and assigning work it might look like this:
Why are managers committing to and assigning work?
A: Because they are responsible for meeting the deadline.
Why are they responsible for meeting the deadline?
A: Because the have been named as the person responsible for this project.
Why are they named as the person responsible?
A: Because It’s on his boss’ performance agreement.
Why is it on his boss’ performance agreement?
A: Because this is how his bonus and raise are calculated.
Why is this how his bonus and raise are calculated?
A: Because that’s the only way they can know if he’s doing a good job.
We see that the reward structure is driving the manager behavior to commit and assign work.
Run Experiments to spark change. Culture is hard to change because it’s multi-faceted. When you start to tackle the root causes of a cultural element, you will likely continue to learn new causes as you go. It’s important to understand that you won’t get solved on the first try.
With our above example, perhaps we run an experiment where we tie bonuses to outcomes instead of specific delivery deadlines. This will give the company a better sense of who is doing a good job and also empower the teams to drive outcomes and not just deadlines. We might also experiment with having the team create an impediment backlog, things that are slowing them down, and schedule weekly meetings with the manager to discuss ways to overcome these impediments.
How is culture affecting your transformation? Let us know in the comments!