Insights | 10.09.19
Corporate Anthropologist: If You Want to Change Your Culture, Do These 7 Things
History is littered with examples of companies that left themselves open to devastating consequences resulting from a dysfunctional, “toxic” culture. Look no further than bankruptcy courts for proof.
Then there are those organizations that attract and retain top-notch people drawn to a certain vibe – one that’s entrepreneurial, collegial, ethics-driven, high-energy, team-first and client-first.
Some institutions – say, for example, the investment advisory arm of a traditional bank or credit union – may have the exact culture that suits them and the results to prove it. If so, read no further.
But maybe you are the head of an organization still molding its culture or throwing off vestiges of legacy stodginess out of step with techno-charged times. Maybe the culture is supposed to be client-centric, but, in actuality, it features a mix of top-down anxiety, middle-level lip service and rank-and-file angst. Or, perhaps there’s a burgeoning entrepreneurial spirit bubbling forth, but it isn’t exactly jibing with the more buttoned-up home office.
Results-obsessed rigidity might be driving quality people away. Cultures steeped in groupthink, if it’s outdated or backwards, can lead to stagnation.
A healthy corporate culture motivates your workforce. Unchecked toxicity, meanwhile, can be harmful. Sure, it might yield some perverse benefits for a period of time. But at some point, it can come back to rot you. Top people leave. Your customer base shrinks.
Transforming an organizational culture takes time, but change need not be elusive – if top executives take the right approach.
This was the message delivered during a master class on organizational culture taught earlier this year by Sigal Barsade and Joseph Frank Bernstein professors at The Wharton School of Business. Her remarks came at the Bank Insurance & Securities Assocation (BISA) 2019 CEO Retreat, held at the Aresty Institute of Executive Education at the Wharton School in Philadelphia.
Here are seven important steps on the road to deep-rooted cultural change.
Define your culture: You can’t change what you can’t define. And the best way to define your culture, Barsade said, is to frame it as a two-part question –one that leaders can ask of themselves and of their colleagues, above and below: which types of behaviors at our organization right now are rewarded, and which ones are punished?
“If you were sitting interviewing a prospective candidate, and they asked this of you, what would your answer be?” she asked, emphasizing the need to boil down the definition to a short sentence.
The exercise of defining culture in this way can force leaders to put nebulous platitudes under a real-life lens, and in the process, some blind spots or contradictions might manifest, she explained. A group of business leaders may talk the talk when it comes to innovation, but in truth, risk-taking gets punished, while safer plays get rewarded. Or there are the supposed cultures of transparency and brutal frankness – except when someone is honest to the wrong boss about the wrong issue.
Be real and patient: Change takes time, often three to four years, Barsade said. Have patience and be realistic.
“I have these leaders who tell me that they want a strong performance culture,” she said. “Oh, if that only came in a bottle. Remember, there is no such thing as one perfect culture. Everyone is going to be different.”
Management has to buy in: This is crucial. Managers have to lead by example. If there is, for example, a new initiative to have weekly brown-bag lunches as a way to compel a cross-section of people from different units to talk to one another and to encourage more collaboration, the boss can’t skip it. Employees emulate what they see coming from the top down.
Be the change you want see, as legendary management consultant Gandhi once said. Don’t just dispense the Kool-Aid – swill it, gargle and let it run down your shirt. Exemplary behavior is imitated when it is observed, such as in a public restroom. Studies have shown that 90% of people wash their hands when there is someone else there to watch, Barsade said. (You don’t want to know the stat on what happens when people are alone).
“Norms are a manager’s best friend,” she said.
Over-communicate: “You can't communicate enough,” Barsade said. “There is no such thing as over-communicating.”
If you think you have said something repeatedly, to the point that you are exhausted from saying it, you’re only off to a decent start, Barsade said, paraphrasing Jack Welch. “People need to hear a message over and over.”
Get the alignment right: “Your culture has to fit your strategy and your structure,” Barsade stressed.
A desired culture works when it fits into context. Barsade recalled a particular consulting assignment she turned down because of the glaring disconnect between what the company wanted to create – a “team-first” culture – and its basic compensation structure, one in which top-tier people got promoted and bottom dwellers were let go.
A first-mover, aggressive growth strategy might not allow for a cultural shift in which people are encouraged to think unconventionally and take risks. But in such a situation, while the entire culture might be hard to recalibrate, some segments could be encouraged to think differently. Hence this next major point…
Allow for subcultures: Don’t be so enslaved to conformity that subcultures can’t thrive, because some great ideas will come from the counterculture.
“Let subcultures thrive,” Barsade said. “Take the best outcomes back to the mother ship.”
Enhanced socialization: How are new employees socialized when they arrive? “Two hours with human resources on the first day? That’s not enough,” Barsade said.
Some organizations, such as Ritz-Carlton, make a point to put all new staffers, from bellhops to head chef, through extensive training, treating it as a crucial chance to indoctrinate. As such, the process involves the company’s senior executives. Top management shows new employees what “we’re all in this together” looks like in practice.
Companies, like civilizations, need ceremonies, rituals and stories to bind shared culture together. Leaders should tell stories about exemplary employees, taking care to underscore core values. At Land's End, for example, Barsade said, there is a tale handed down through the years about the errant baby sock that accidentally found its way into a package of an item being returned. Well, it turns out that sock, owing to a laudably customer-centric employee, found its way back to the precious little feet of its owner. Happy hours sure are fun, but what else can colleagues do together to reinforce shared experiences? It could be a trip to the bowling alley or ballgame – or, even better, a soup kitchen.
OK, so you changed culture for the better. It took a long time, but the new atmosphere is palpable – high fives for everybody.
According to Barsade, the work is not yet done.
“Don't get too caught up in your own shared culture,” she warned.
If every staffer is 100% on the same page together with the same shared worldview but not in tune with the rest of the world and where it is going,
your organization will get left behind. Pay attention to exterior forces. Plenty of smart, dedicated people at large Silicon Valley companies believed deeply in supercomputers 20 years ago. Then cloud computing became a thing.
Beware homogeneousness. Fight against tunnel vision or you’ll miss out on the kind of innovation the bank and credit union industry sorely needs.
Early humans learned a long time ago that by working together they could take down bigger prey and store up more food for winter, Barsade explained. This stuff – the need for a shared experience – is deep in our DNA. There were no management consultants around asking the cavemen to fall blindly backwards into another caveman’s arms as an exercise in trust. It was about survival. Once the right cultural changes take root and employees go all in, you have something powerful that can be leveraged for ambitious initiatives.
Finally, Barsade cautioned, don’t ever lose sight of why culture is important in the first place.
“It keeps people motivated and committed,” she said. “It’s why they care.”