Replacing Culture Change with Culture Alignment for a Corporate Win

Facebook
Twitter
LinkedIn
Google+
RSS
Follow by Email

For the last couple months, we’ve covered a lot of really great culture topics in our blog series.  We started with the 5 Tenets of Culture, spent some time discussing Millennials and their impact on the workplace, and lastly, have discussed how the world has changed but meanwhile, corporations have not.

At this time, we want to get back to our roots.  Have you ever been curious as to the groundwork and methodology behind RoundPegg?  Well today is your lucky day!!  This post is from Dr. Natalie Baumgartner’s (here is her Tedx Talk) White Paper- Replacing Culture Change with Culture Alignment for a Corporate Win.

Replacing Culture Change with Culture Alignment:
The Real Corporate Solution 

70% of all corporate change initiatives fail (Blanchard, 2010). This shocking, and deeply
discouraging, statistic has made its way into hundreds of books, thousands of empirical
studies, and even more twitter feeds and blogs. Corporate culture drives employee
effectiveness (Schein, 1992) and is a critical predictor of how companies function – from
employee satisfaction and retention to organizational profitability. Corporate America
acknowledges that having a strong company culture is a critical component of
organizational success, but how to get there remains unclear. A multitude of theories and
consultative processes have been developed over the past decades in an effort to find the
elusive recipe to drive a strong corporate culture – a recipe that works even just half the
time would be an improvement.

This examination proposes that the reason culture change initiatives fail is because they
focus on wholly changing a deeply complex system, an organization of people, rather than
on aligning the individuals within the organization around a set of shared core individual
culture values.

Culture alignment, as opposed to culture change that intends to shift hardwired behavior,
has greater power and capacity to achieve corporate goals by leveraging the values that
already, and inherently, drive individual employees today.

The remainder of this examination will (1) provide an understanding of the root causes of
culture change initiative failure, (2) propose an alternative approach to achieving
organizational effectiveness by driving culture alignment, and (3) identify a behavioral
toolbox that can be used to engage an organization around culture alignment. 

Failure of Culture Change Initiatives 

Strong business leaders know that organizational culture is not just a fluffy concept focused
on group bonding, teamwork initiatives, and corporate cheerleading. They know that the
culture of an organization is the root explanation of the behaviors seen in the workplace on a daily basis, the behaviors that ultimately drive a company toward corporate success – or
failure. Although there is a common appreciation of culture, there exist as many definitions
of “company culture” as there are companies. Looking past the multitude of details, at it’s
core, “company culture” is how we do things here – the critical values that drive everything
an organization does, from hiring to development to employee engagement. This interpretation of company culture has tremendous power to influence organizational behavior. And
so culture change initiatives are often embraced as an important tool in getting a company
to behave differently to meet new or renewed business objectives. Herein lies the challenge.
Culture change initiatives, which are typically highly complex processes designed to broadly
change the way organizations function, almost always fail.

A fair amount of work has been done to determine why these inspired culture change initiatives fall short and the conclusions are wide reaching: they are too fast, they don’t incorporate enough communication, leadership isn’t deeply engaged (Kotter, 2007). While those,
and more, are all certainly part of the failure puzzle, there seems to be a more fundamental
reason that even well developed change processes fail to shift the way companies function.
Organizations are systems of individuals, and for the most part, individuals’ personalities
are pretty well developed by the time they hit the corporate world (Costa & McCrae, 1988).
Now, there are aspects of our personalities that certainly do change over the course of our
lifetime, and recent research on brain plasticity has expanded on that potentiality, but the
core of who we are tends to remain very stable. This is illustrated by the fact that, even after
the installation of highly developed coaching programs, individuals have a strong tendency
to revert to their typical behavior within a short period of time. In sum the hard-wired core of
our personalities drive our individual behavior on a day-to-day basis. Everywhere. Including
the work place. When we then extrapolate to an organization filled with individuals, we find
that the way company functions on a daily basis, their “company culture,” is not really driven
by the values identified by senior leadership or posted on the lobby wall – it’s driven by the
core values held by the individual employees. 

Company Culture: Bottom Up, Not Top Down 

Using this working definition of company culture, it becomes clear that culture change
initiatives, which are designed to change the way companies do things, are set up for failure.
For most companies, a culture change initiative is put in place to enhance their organization – increase retention, enhance performance, boost morale etc. Yet, they fall short because
they attempt to fundamentally change how people behave on a day-to-day basis. Because of
our hard-wired nature, changing the daily behavior of many individuals within a system is
profoundly difficult, particularly if you’re working at odds with how people are wired.

When we think of culture as a statement or set of values that leaders want to see in the organization, rather than a set of values held in common by the people who are the organization,
we’ve made our first mistake – and we’re off to a rocky start, the beginning of the 70% failure
rate. To improve the functioning and wellbeing of an entire body of employees, we propose
that organizations first need to understand the actual culture of their organization – the core
individual culture values their people hold in common.

Quite often, the values that surface are in fact the very values the organization wants to see
at the core of their culture. In those instances, a lack of organizational performance typically
isn’t because the wrong values are held by the employees – but because the systems within
the organization are not supporting and leveraging the existing values (Ruvolo, 2007). So,
rather than embark on an invasive, costly culture change initiative designed to change the
values the company lives by, the leadership would actually only need to ensure that their
processes – the way they hire, how they develop their people, the way they engage their
employee base – are aligned with the existing core values. 

Alignment, Not Change 

Culture alignment is a major indicator of organizational success. This concept is rooted in
the Person-Environment Fit (PE Fit) literature that has existed within the Organizational
Development arena for over 100 years (Kristof-Brown, Zimmerman, & Johnson, 2005) and
demonstrates that employees who are culturally aligned are more satisfied, perform better,
and stay longer. Jim Collins gave further support to the conclusion that there are real business implications to culture alignment. In Good to Great (2001), he found that companies
whose employees are culturally aligned are 6 times more profitable than their competitors.
So aligning around consistently held employee values is not only a more realistic way to
enhance company culture, as compared to culture change initiatives dependent on changing
deeply hard-wired behavior of employees, but is also predictive of real financial wins for the organization.

What if an organization doesn’t want to retain the values held in common by their current
employees? Then alignment around a value shift does need to occur – but this value shift is
dramatically different from traditional culture change initiatives. Rather than embarking on
a highly complex process to make comprehensive culture change that may be at odds with
how employees are wired, given the many risks and costs associated with doing so, the
culture alignment model would suggest identifying a small set, typically 3-5, of values that
need to be shifted. That is, in order to shift the cultural values from those held in common by
employees today to those the leadership wishes to see, the company needs to methodically
align organizational practices around a revised value set – one that includes all or most of
the existing employee values along with that small set of new values. Shifting the culture
using this approach sets the organization up for success because it works in concert with the way, for the most part, the employee population is wired. Rather than trying to change
the hard-wired behavior of a population of employees through a culture change process, this
culture alignment process slowly migrates the company culture while maintaining cultural
alignment. A win – win for all. 

Culture Alignment Toolbox 

Once there is agreement that culture alignment is the more effective path to enhancing
cultural and organizational effectiveness, we need to know the levers to pull to achieve
success. The process, whether an organization wants to align around the current values held
by its employees or to shift values in an aligned manner, is fundamentally the same.

1. Measure the core individual culture values of each employee. It is critical here to use a
safe, strength-based process that ensures employees will identify the core values that are
most important to them as individuals – not those they or the company wants to see.

2. Review the data. Identify those individual culture values that are most held in common
across employees – in effect, the core values of the company today. Also examine differences
by level (e.g., executive v. non-executive), function (e.g., sales v. engineering), location (e.g., Americas v. Europe), office (e.g., corporate v. remote) etc. These differences may
illuminate which values the organization wants to align around, what subcultures need to be
supported and where value conflicts may exist.

3. Confirm the final core company culture values to align the company around. This should
be a relatively small group of clear, simple values that are held in common by a large portion
of the organization and that have comprehensive buy-in from the organizational leadership
team. If value shift is to occur, this is when the final revised set of values is confirmed as well.

4. Communicate the final core company culture values to the organization with the clear
direction that they are the guiding principles behind the culture the organization is to live
by. This set of values need to be communicated widely and repeatedly – in written communications, oral communications etc. – to ensure they become part of the company language.

5. Ensure that all organizational processes are aligned with this set of core company
culture values.

a. Hiring

All employees hired need to be able to provide specific examples of having placed high
importance on these values in their work history. It is essential that questions be framed
properly so candidates are not “led” to endorse these desired values. Ideally, the candidates’
values are identified via survey(s) prior to the interview so any misalignments with the
company core culture values can be examined during the interview process.

b. Development

All existing employees need to be encouraged and rewarded in alignment with the core
company culture values. It is important to remember that employees’ own individual values
are quite hard wired. Any initial assessment of their values can be helpful in illuminating
where differences exist between them and the organization. When differences do exist,
leadership needs to support the employee in ways that will allow them to function well with-
in the company in light of any culture misalignments – and even leverage the unique values
the employee brings to the table, since they are unlikely to change.

c. Engagement

All existing employees need to be engaged around the core company culture values.
Frequent, real-time assessments of employees’ engagement around these values will clarify
for leadership whether the values are being encouraged and supported through out
the organization.

While pulling the levers to ensure cultural alignment is being woven into the day-to-day
activities of an organization, it is critical to measure, either qualitatively or quantitatively, the
results. Organizational leadership needs to determine whether the core cultural values are
being integrated into the language of the company and driving the way the organization is
growing, developing and engaging their people. When culture alignment is clear and com-
prehensive, the organization will reap the rewards of employee satisfaction, retention and
organizational profitability. 

An Achievable Corporate Culture Win 

Culture, the way we do things at our company, serves as the foundation to every organization’s success. When well understood and aligned through out a company, corporate culture
ensures that the individuals within are all pulling in the same direction. Culture change
initiatives designed to mold, or even reinvent, an organization’s culture typically fail because
they focus on fundamentally changing the behaviors of a group of fairly hard-wired
individuals. Rather than attempting to influence an organization’s foundation by changing
its culture, we propose that aligning around existing, or incrementally modified, shared
values can enhance the well-being of individual employees and the organization as a whole.
Culture alignment is an achievable corporate culture win. 

If you’d like to download a pdf version of this White Paper to share with colleagues, please follow this link.

References:

Blanchard, K. H., & Ken Blanchard Companies. (2010). Leading at a higher level: Blanchard on
leadership and creating high performing organizations. Upper Saddle River, N.J: Pearson/Prentice Hall.

Collins, J. (2001). Good to great. New York: Harper Collins.

Costa, P.T., & McCrae, R.R. (1988). Personality in adulthood: A six year longitudinal study of
self-reports and spouse ratings of the NEO personality inventory. Journal of Personality and
Social Psychology, 54, 853-863.

Kotter, J.P., & Hesketh, J.L. (1992). Corporate culture and performance. Free Press.

Kristof-Brown, A.L., Zimmerman, R.D., & Johnson, E.C. (2005). Consequences of individuals’ fit
at work: A meta-analysis of person-job, person-organization, persongroup, and
person-supervisor fit. Personnel Psychology, 58, 281-342.

Schein, E. H. (1992). Organizational culture and leadership, (2nd ed.).
San Francisco: Jossey-Bass. 

Facebook
Twitter
LinkedIn
Google+
RSS
Follow by Email