Posts Tagged analysis

144 — Can You Change Your Company’s Culture Yourself?


You know you need to change your company culture. You know some ways you could begin, e.g. choosing one or two items from the list of 25 Actions, beginning the Interviews or diving off the deep end by starting down the full culture change path. But you’ve never done anything like this before — you’re walking in the dark. Can you do it yourself or should you bring in skilled professional assistance?

Easy or Hard?

With your last acquisition and merger you brought in a Wall Street banker. Surely culture change is a lot easier? It isn’t. Changing a culture is the hardest thing a leader can ever undertake. Nothing else gets close.

In some ways leading culture change change is a little bit like being a family therapist, but on a vast scale. Just as a skilled therapist can help a family change its ways, a skilled experienced business leader who is familiar with changing a company culture can do it. However a business unit manager who has not gone through the trying experience of changing a culture will probably fail when confronted by the brilliantly skillful ways all cultures have to keep things just the way they are.

It’s not as if the culture doesn’t want to change. They do. Everybody wants to enjoy work, feel productive, be appreciated for their contribution, and go home knowing they have had a good day and will have another good day tomorrow. That’s not the problem. The leadership problem in culture change is getting to know the culture as if it were that ambivalent person and gently nudging it, by working closely together, to the better place — of greater maturity, openness and trust — while the culture tries too stay just where it is. Doing that is a learned skill. It doesn’t come naturally.

Not an Analytic Problem

Leading and changing a company culture is not an abstract academic skill you pick up in business school. It is very much like “emotional intelligence”, something you learn by living. A company is the collective mind of hundreds, perhaps tens of thousands of people. It has a powerful memory and enormous inertia. It is very comfortable doing things in familiar ways and is very skilled at resisting efforts to change it (unless of course it is involved in and feels the necessity for the change. Then it can change rapidly.)

The Odds of Success

You may have come across the statistics on the success of “Change Management” efforts. They are dismal. Most start with good intentions, few succeed.

There are very few specialists with the necessary skills to assist leaders in culture change. Most consultants are trained in analysis and project management. They approach culture change as if it were a project. It’s not. When it comes to culture, analysis and reports can actually make things worse. A company’s culture is its personality — the way it is in the world. You don’t understand a person or a culture with analysis and reports. You get to know a culture, and how to influence it, just like you get to know a person — by doing things together, by watching how it reacts in different situations, by seeing how it responds to your requests, your attention, your needs, your urgings. Learning to do that takes years of specialized experience.

If You Have Not Done It Before, Get Help

To summarize; if you’re the business unit leader and have not been coached or mentored through a full culture change experience, don’t try it by yourself. It’s just too strange, too unfamiliar, too difficult. In addition, the first time around you probably want to be part of the team, not standing out in front where you’ll definitely take some arrows in your back. It’s just not worth it. The odds of do-it-yourself success are slim, while the potential payoff of successful culture change is enormous.

cc 144 — © Barry Phegan, Ph.D.

Posted in: About Company Culture — Why is Culture Important?

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124 — Studies and Reports Will Not Develop a Company Culture

Culture is not a problem to be analyzed. Studies might actually make things worse. You develop your company’s culture by doing things together. It’s the only way.

Developing a culture, or merging cultures, is not like solving an operational problem, or improving a work process. To begin with, culture is not a problem. Culture is like a person. As a person do you see yourself as a problem? I didn’t think so.

If a culture is approached as if it is a problem to be “corrected” it will probably push back, just as as you would and should.

Like a Person, Culture Is Not a Problem to Be Analyzed

Imagine someone is writing a report about you. It describes your physical features, your body, your speech, you’re known skills, how you work, and perhaps — if the writer interviewed you carefully — some more intimate things such as your likes, goals, hopes and fears.

But you know that such a report would not really capture who you are — how you experience life. More particularly it could not predict what you will do in a particular situation. Words cannot capture the experience of being you, or much about why you respond in your special way to situations and people. Even you probably don’t know why you do much of what you do.

Psychologists say that 80% of our communications are non-verbal, and of the verbal part only 25% is rational. That means that at most, only 5% of what is important can possibly be captured in even the best analytic study or report.

The reasons we do what we do are largely hidden (in our subconscious) to us, and even more so, hidden to others. But that does not matter because knowing why we do things is not as important or useful as moving forward together, achieving mutually desired goals. As an employee, I am prepared to work with you to build the trust that will lead to openness and a strong relationship. Then we will each bring enthusiasm, creativity and energy. The process of building that relationship is not a looking-backwards-and-analyzing activity. Relationships require engagement, that responds moment-to-moment to our interactions as we move forward together.

It is the same with a company culture. You can only get to know or understand a culture by doing things together, working together, through long-term conversations about the little things that make life. Getting to know someone, or a company culture is a synthetic (understanding the whole as a whole) action, not an analytic (breaking the whole into its parts) problem.

Treat People As Subjects, Not Objects

Developing a company culture is something you do intimately together, rather than something you analyze. When it comes to the people side of business, it is our actions, particularly how we do what we do, that makes all the difference. Engagement will not happen if people are treated like an object — a description in a report, or a survey statistic. It will only happen when people are engaged, valued, and involved — where the workplace is open to what people would like to bring. The challenge is getting rid of the cultural blocks to people’s engagement. You learn about these blocks through action, by starting the culture change process, by doing things together.

Culture Change Is Simple, Difficult, Satisfying

A company culture is its personality. But changing a culture is more difficult than curing a dysfunctional personality or reviving a failed marriage. Changing a work culture involves the complexities of people and large groups. It is the most difficult action a manager will ever undertake.

Managers who develop their work culture admit to the difficulty, but all say it is the most rewarding and satisfying action they have ever undertaken. Rewarding because the gains in performance, in company success, are so profound. Satisfying, because the change in the quality of work life, for themselves and everyone else, is so inspiring.

cc 124 — © Barry Phegan, Ph.D.

Posted in: About Company Culture — Structure

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142 — What’s the Cash Value of Developing Your Culture?

Today most executives agree that a well-developed company culture is a formidable competitive asset. However like all business decisions, the investment in developing your company’s culture should be weighed against the benefits.The pages below will help you calculate the cash return from investing in outside expertise to develop your company culture.

1. Assess Your Existing Company Culture 

Most managers are not familiar with thinking or talking about their company’s culture. This first question prepares you to answer the unfamiliar questions that follow. This question has statements about qualities or attributes of a well-developed company or business unit culture.

How are these qualities in your company or business unit? Check Agree   X   or Disagree   X  

Agree ___  Disagree ___    People here feel useful and productive.
Agree ___  Disagree ___    People here can be creative.
Agree ___  Disagree ___    People here see endless opportunities for improvements.
Agree ___  Disagree ___    People here know how they fit into the big picture.
Agree ___  Disagree ___    People here feel they belong.
Agree ___  Disagree ___    People here know they are valued for their work and contributions.
Agree ___  Disagree ___    People here have fun.
Agree ___  Disagree ___    Relationships at work are mature and non-political.
Agree ___  Disagree ___    People here have enough information to make good decisions.
Agree ___  Disagree ___    Most people here bring their full energy and creativity.

The Workplace
Agree ___  Disagree ___    This is a powerful company that engages employee’s hearts and minds.
Agree ___  Disagree ___    Procedures here are designed along with the people who will use them.
Agree ___  Disagree ___    Relationships and communications are fine.
Agree ___  Disagree ___    Power and control are widely shared.
Agree ___  Disagree ___    People are involved in decisions that affect them.
Agree ___  Disagree ___    The company creatively responds to challenges, suggestions, and change.
Agree ___  Disagree ___    Employees recommend working at this company to family and friends.

Agree ___  Disagree ___   Leaders here put people first.
Agree ___  Disagree ___   Leaders here are good coaches.
Agree ___  Disagree ___   Leaders here ask people how they can help them.
Agree ___  Disagree ___   Leaders here set a clear direction — “This is where we are going.”
Agree ___  Disagree ___   Leaders here recognize, celebrate and reward desired behavior.
Agree ___  Disagree ___   Leaders here give everyone background information, the big picture.
Agree ___  Disagree ___   Leaders here protect people from abuse from the system above them.
Agree ___  Disagree ___   Leaders here make cooperative, team decisions.

Hopefully that got you thinking culturally.

2. Valuing Your Potential Company Culture

Studies indicate that most employees bring to work around 20% of their potential contribution. With a well developed company culture people will bring much more. Even with a conservative estimate doubling that 20% to say 40%, it’s clear why a more developed workplace, that more fully engages employees, is overwhelmingly competitive and profitable.

The six questions below describe some ways employees respond when leaders deliberately develop their company’s culture. Answering questions 2 thru 9 is difficult. Please try to put an approximate number against each item. You may not even know where the decimal point is. That’s OK. Remember, “Perfection is the enemy of the good.” Just make your best guess.

What would be the annual $ value to you or your company if all your managers and employees:

$ ________  Took full responsibility for identifying and solving problems in their work areas, without just passing them on to their boss?

$ ________  Watched and cut costs as carefully as you do?

$ ________  Look out for what is good for the company rather than just what serves themselves or their department best?

$ ________  Treated customers as if they cared about them personally, and customer loyalty doubled?

$ ________  Communicated so well up, down, and sideways that work always flowed smoothly across departments and throughout the company?

$ ________  Continually sought new, creative ways to improve work processes and build the business?

Nationally, The Cost of Underdeveloped Cultures is Enormous.
Nationwide the greatest loss to American business is the withheld energy and creativity of employees at all levels. If you assume even a minimal lost productivity of 5% (and it is probably closer to 50%), the annual national cost is in the trillions of dollars. Developing a powerful workplace culture — where people bring more of themselves to work — saves you your share of this terrible national waste. In many companies, reallocating a small part of the money now lost to low productivity, absenteeism, turnover, and dealing with unnecessary problems, would more than cover the costs of getting their people involved in a positive way.

3. Productivity

What would be the annual added value if employee, plant, business unit, or company productivity increased?

10% $ ___________        20% $ ___________      50% $ ___________       100% $ ___________

4. Labor related issues (If your facility is unionized)

Over the last 12 months what might have been saved if there were no discipline hearings, arbitrations, or attendance discipline issues?

$ _______________

5. Accidents and Safety

If applicable, what would be your annual savings if you had no major accidents and lost time injuries were well below one/million+ labor hours?

$ _______________

6. Attrition/Turnover/Retention

What would you save annually on recruitment, training, etc. if turnover was cut by 75%?

$ _______________

7. Reduced Management

Traditional workplaces have high control costs. In developed company cultures, employees take responsibility and control, solve workplace issues and feel freer communicating across boundaries and levels. These companies have low control costs, i.e. far fewer supervisors and middle managers. What would you save annually with 20% or 40% fewer supervisors and middle managers?

20%   $ ____________          40%   $ ____________

8. Your Culture Goals

Imagine that in 18 – 36 months you have the culture you want. What would that be? How would you like your company to be different? What four main results or outcomes would you want? (See also 312 — The Five Steps to An Unbeatable Culture,  1. Choose Your Culture Change Goal)

a. _________________________________________________________________________

b. _________________________________________________________________________

c. _________________________________________________________________________

d. _________________________________________________________________________

9. Estimate the Return

Everything described in 1. thru 8. is realistic and achievable. If you developed the culture you want, what would you estimate its annual added value would be to you, your company or your business unit? Keep in mind that the benefits of culture change are cumulative and ongoing. They begin appearing within the first eight weeks, are normally visible company-wide within the first 12 months, and solidly in place within 2 to 5 years. The three main variables are the industry type, the strength of top management support, and the company’s size.

Estimated Return/year   R $ _____________________

10. Select The Investment

Few managers are skilled in culture change. It is practically impossible to do without professional assistance. The figures on the chart below are drawn from my experience. However organizations vary enormously even within industry type, so the numbers are guides only. They represent only the investment in outside expertise. However the internal investment of top management time is relatively small, perhaps 3 – 4 hours per month, and that is mostly in the first six months of the culture change process. Employee problem-solving teams pay for themselves almost  immediately. After six months the culture change process naturally merges with normal operations and does not require additional management time.

Locate your company on this chart by # Employees (total FT payroll)
If you have say 500 employees, imagine a vertical line half way between 100 and 1,000 on the # Employees line. Your estimated Investment/year would be half way between $400k and $2,000k, i.e. $1,200,000. Write your Investment/year number into Question 11, 2nd space.

# Employees                                    10               100               1,000          10,000              100,000
Investment/employee/year         $9,000          $4,000           $2,000             $500                 $100
Years to complete change               1                  2                    3                    4                     5
Total Investment                            $90k            $800k           $6,000k        $20,000k         $50,000k
Investment/year                             $90k            $400k           $2,000k        $5,000k          $10,000k

11. Calculate Your ROI

Divide the Return/year (your estimate from Question 9)

R $ ________________________

by the Investment/year (taken from the above chart 10.)

I $ _________________________

R/I  =  _______ X 100 = _______ ROI %

Surprised? Typically the ROI in company culture is exceptionally high.


cc 142 — © Barry Phegan, Ph.D.

Posted in: About Company Culture — Why is Culture Important?

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