Making Cultural Change Stick
What are the ingredients that lead to a successful culture change? Equally important, what ensures that a culture change will eventually stick?
Culture change is rarely a quick fix. Clearly, if your entire organization is about to go into terminal decline attempting a sustained culture change will be almost impossible. For example, even if Lehman Brothers recently tried to change its culture, the new culture almost certainly would not have arrived quickly enough to affect whether the company survived or not.
Changing a company's culture is not for the faint hearted or for those who see the process as a sprint, rather than a marathon. However, a culture change can undoubtedly yield fundamental improvements in company and individual performance. It is the kind of investment that many firms badly need to make these days.
Louis Gerstner, the CEO who rescued IBM from near oblivion, admitted that previously he saw culture as one among several important elements that produce success. But while at IBM he came to see that "culture isn’t just one aspect of the game—it is the game." So how do you play the game?
Some of the key variables that produce sustained culture change appear in our Way Ahead paper: Sustaining Culture Change. We identify two basic kinds governing the construction of a sustainable culture change program: individual factors and organizational factors.
Often there is adequate attention to one but not the other. The two kinds of variables consist of specific areas of activity with practical implications for action:
1. Individual Change variables
2. Organizational variables
Currently we can observe the challenge of creating sustained culture change most vividly in the financial services area, particularly in relation to banks. Despite the turmoil, as President Obama recently noted disapprovingly in a press conference, some banks are returning to offering unacceptably large bonuses.
In Europe bank culture is expected to change but there is clearly much inertia. It's "an absolute disgrace" said Christine Lagarde, France’s outspoken finance minister, about banks returning to the "old ways."
Often when organizations want to alter certain practices, attitudes or behaviors they are really saying "we need to affect the culture." But too often there is either resistance to accepting this, or lack of awareness about the implications.
For example a major jewelery and luxury good outlet, recently approached Maynard Leigh Associates asking for help with sales training. But as we explored the issue we showed that similar training had already occurred a few years back and at the time was regarded as highly successful.
Many staff we spoke to still recall that earlier learning experience with pleasure. Yet here was the client asking for more of the same. What had gone wrong?
What our enquiries revealed was that while people were enthusiastic to implement their new learning skills about selling, there had been virtually no change within the culture of the organization to support the new approach. Inevitably people returned to the old ways, since none of those with responsibility for steering the culture were doing anything different.
The core message about sustaining culture change is that it will only work if you focus on both individual change and the wider corporate environment.