Corporate culture should be approached like a home renovation: Keep the features that make it unique and then renovate for prolonged future value. That’s the premise behind a new report, Culture Renovation: A Blueprint for Action, from Seattle-based Institute for Corporate Productivity (i4cp). With an increasing number of companies embarking on initiatives to change their corporate culture–and just 15% declaring their efforts successful–i4cp recognized a need to explore what works and what doesn’t, and whether those who succeeded had followed a blueprint or set of action steps.
Determined to find out, i4cp conducted interviews with senior-ranking business executives and collected survey data from more than 7,600 business professionals worldwide. Halfway through the process, CEO Kevin Oakes had an epiphany that led him to coin the phrase “culture renovation.”
“We’d been using the more common term ‘transformation,’ but it dawned on me that nobody ever really transforms their culture,” says Oakes. “They don’t completely change what they are doing and become something different, they renovate their culture and keep the values, purpose, vision and mission that made them great to begin with. It’s a pretty simple nuance, but people like it because it depicts what they are trying to do at their organization.”
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Keeping with the architectural theme–and highlighting success stories from Ford, Microsoft, 3M and others–the report lays out three steps to architecting a masterwork: plan, build and maintain. In their zeal to get started on culture changes, Oakes explains, senior management often bypasses the all-important planning phase and begins without garnering any insight from the workforce.
“One of the worst things a senior-management team can do is lock themselves in a conference room and try to figure out what the culture is today–because they’ll probably get it wrong,” says Oakes. “They need a listening strategy where they get down to the ground level and seek to understand what the culture is all about. That will help determine what to keep and what path to create going forward.”
Organizations also must have a plan in place to measure and monitor progress of the initiative before moving on to build, the most well-known phase, according to Oakes. Build is not only about making changes to the culture, he explains; it also includes ferreting out skeptics and establishing a co-creation mindset. i4cp discovered a strong correlation between companies that invest in training at all levels and the organizations’ ability to embrace the desired behaviors.
The final phase, maintain, is often ignored, leading organizations to easily revert to the way things were before the initiative began, says Oakes. Maintenance can be accomplished through a variety of methods, including talent-management practices, onboarding and performance-management strategies.
“We found a correlation among companies that changed the way they were going to measure the performance of people when they set out to change their culture,” says Oakes. “It wasn’t about one way of measuring people versus another; it was the sheer fact that you’re changing how you are going to measure people signals the importance of what you are trying to do.”
Indeed, the report found that success or failure of a culture transformation is largely dependent on how an organization views change. Whereas many companies consider change exhausting–and hope things will just stay the same–Oakes says, progressive organizations view change not only as normal and expected, but as an opportunity to enter new markets or expand what they are doing.
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Instilling that mindset throughout the organization requires C-level support, says Oakes, citing the example of Satya Nadella, CEO of Redmond, Wash.-based Microsoft Corp. Nadella not only championed Microsoft’s culture-renovation initiative, he continues to reinforce the behaviors and values that epitomize what the multinational technology company is all about, says Oakes. It’s not just top-down support that’s necessary for a successful culture renovation, however. Support and contribution from the workforce, particularly the “influencers and energizers,” is also critical.
“These are the people that make everything run inside the organization,” says Oakes. “They cut through the red tape, they know where to go, they’ve got the answers.”
Every organization has such individuals, but they are “buried in the hierarchy of the organization” and are often “hidden” to the senior team, says Oakes. Often, these individuals are introverts, which can make it difficult to ferret them out, but identifying them and garnering their support is imperative for a successful culture renovation.
“Understanding who these people are is important because you want to make sure they are the first people you get on board with the culture change,” says Oakes. “If they’re not on board, they can be very detrimental to what you are trying to do.”
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This is the first in a series about the Institute for Corporate Productivity’s recent work around culture. Check back soon for more, including articles on such topics as whether culture predicts performance, traits of a healthy culture, and the benefits of creating a culture of learning.
