Corporate culture is a label often used to describe the "what" about "why" something cannot be done. Peter Drucker is often quoted as follows; "Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you've got." One could be forgiven for believing that corporate culture cannot be changed.
My experience is that it can. Changing corporate culture undoubtedly requires leadership. It is useful, however, for leaders to be able to build a picture of the change required using a model of the culture.
Models of a corporate culture tend to be of two types.
The first type depicts culture as a geometric shape such as a polygon. The length of the spokes from the centre of the polygon reflects a numerical value of a specific element or typology of "corporate culture". The elements tend to have labels such as "Avoidance" or "Achievement" or "Reactionary".
The second type tends to build a textual description of each corporate culture element. The model tries to describe, using plain words, the elements of the culture.
Both types may be used in analysing corporate culture. However, in my experience, the former is more useful than the latter in implementing a change in corporate culture.
My experience is the typology type requires the least thinking by the leadership team and the descriptive type the most.
The first type is very useful in getting a picture of an organisation's culture. Also, using the tools can create a successful cultural change. Several organisations make a very good business out of marketing and selling the tools. So, on one level, they are successful.
My observation, however, is that people tend to remember the picture and or the labels given to the typology. They do not however, understand the detail behind the picture. To bring about cultural change, it is the detail that needs to be thought through and changed.
Because the picture requires interpretation, often a consultant is needed to help devise, implement and drive change based on the model. Change driven by a consultant, in my experience, peters out once the budget for the consultant is exhausted.
An example of the second type is Johnson and Scholes Cultural Web. Another example I have found to be also to be very useful is the theory of planned behaviour.
For the purpose of this illustration though, I will concentrate on the Cultural Web model.
This model describes a corporate culture consisting of six elements:
Power Structures
Organisational Structures
Rituals and Routines
Symbols
Control Systems
Myths and Stories
The six elements together form the base for the paradigm of the organisation.
The model is particularly useful because a plan can be developed to change the constituent parts for each element or combination of elements.
The model is easy enough to understand for people in the organisation to do their own analysis, perhaps with the help of a consultant, but not with the consultant in the driving seat.
For example, in one organisation's call centre environment, the following was observed:
Organisational Structure
- Team managers do not have sufficient knowledge to effectively manage
- Teams change frequently
- Teamwork lacking
- Lack of promotion from within
Myths & Stories
- Disasters
- Them versus us
- Absence of Recognition
- Low morale
- Poor people management
- Poor follow through on initiatives
- Poor work-home life balance
- Corporate values not role modelled by senior management
- Cost cutting
Rituals and Routines
- "Customer service"
- "Corporate values"
- Employee survey results
- Staff development plans
- Initiatives
The myths and stories in the organisation were all negative. Many of the myths and stories were perpetuated by senior managers. What should have been seen as positive elements within the organisation were seen as rituals and routines and not actually delivering an outcome.
To change what was seen as a poor paradigm, the organisation structure and make up was changed frequently, mostly from outside the organisation resulting in poor knowledge at management level. The actions perpetuated the cultural elements described under rituals and routines and encouraged similar myths and stories told in the workplace.
The culture was changed by:
Being crystal clear about the goal of the organisation
Communicating the goal of the organisation at every opportunity
Distilling the goal into discrete outputs for teams
Holding people accountable to their contribution to the goal
Reducing the number of initiatives to focus on completing initiatives
Eliminating initiatives which did not contribute strongly to the goal
Deliberately, formally telling and retelling stories about good outcomes that contribute to the goal
Owning up to mistakes and poor outcomes
Training and promoting from within
The change seems obvious. However, until the cause and effect of process mixed with leaders behaviours creating the culture is seen clearly for what it is, change efforts tend to attack one or two elements in isolation.
The strength of the change seeming to be obvious is that it needed little interpretation. People within the organisation were able to plan, implement and measure the change in culture with minimal help from consultants.
Using something like the Cultural Web model, the desired culture can be described in the small concrete building blocks of each element. The requirement to change culture therefore becomes a large number of specific small changes.
This is significantly more effective in generating change from within than a change described as a change from one label to another. For example, describing the change from a passive-defensive culture to a constructive culture which is the case in pictorial models using labels to describe culture.
Changing organisation culture is not so much difficult as it is painstaking and requiring of leadership. Models help understand what is required. Models which perpetuate the use of labels to describe culture rather than the component parts are, in my experience, less useful in delivering lasting change.
Kevin Dwyer is the founder of Change Factory. Change Factory helps organisations who do not like their business outcomes to get better outcomes by changing people's behaviour. Businesses we help have greater clarity of purpose and ability to achieve their desired business outcomes. To learn more or see more articles visit http://www.changefactory.com.au or email
kevin.dwyer@changefactory.com.au ©2007 Change Factory
Article Source: http://EzineArticles.com/?expert=Kevin_Dwyer
Wednesday, July 11, 2007
What You Should Learn From GE
My friend, John, sat on the patio, complaining loudly. His company had just adopted the forced ranking system that General Electric (GE) uses for personnel evaluations.
"It's wrong for us," John grumbled, "We work in project teams. We shouldn't be competing with each other to see who stays and who goes."
No less an authority than Business Week has run stories implying that when Jim McNerny went from GE to 3M, he applied the "GE toolkit" in the form of Six Sigma. The results were mixed. Profits and share price went up. The company's reputation for innovation went down.
There was a time, not that long ago, when anything GE did was slavishly copied by companies everywhere. That time is gone. But you can still learn a lot from GE.
Whether you measure success by stock price, profits, innovation, flexibility or simply impact on society and business, General Electric is one of the world's great companies. So forget about Six Sigma, boundaryless organization, forced ranking, and even the vaunted GE toolkit. Pay attention instead to the things that have made GE a great company for so long.
GE History
In 1890, Thomas Edison brought all his companies into a single organization. He called it the Edison General Electric Company. In some ways he would recognize today's GE because many product lines are the same. GE has been doing business in lighting, transportation, industrial products, power transmission, and medical equipment since the beginning.
General Electric has always been seen as an important company. GE was one of the companies in the first Dow Jones Industrial Average in 1896. When the first Standard and Poor's 500 list was published in 1959, GE was in the top 100. It's the only company still there today.
GE has always been known for innovation. Product innovation has been important. GE established the first industrial research and development laboratory in Charles Steinmetz' barn in 1896.
And GE's innovation hasn't been limited to products. Throughout its history, the company has also been a pacesetter in corporate structure, strategy and management practice. That's one key reason why it's a different company today than it was a hundred or fifty or even ten years ago.
A Company is Like a River
Heraclitus said, "You can't step into the same river twice." Companies are like that, too. GE today is different from GE fifty, or even ten, years ago. That's illustrated by the last three CEOs.
When Reg Jones took over the top spot at GE in 1972, just about everyone outside the company thought things were great. Jones knew otherwise.
Working capital was anemic. He inherited an organizational structure where he had to work with three vice chairmen. There was no coherent strategy and there were threats on all sides.
He stopped the bleeding, solving the cash crisis within six months. Then he re-organized top management and created a coherent strategy. He left a record of 26 consecutive quarters of improved earnings and 14 percent compound growth in profits. He retired as "The Most Admired Businessman in America" and handed GE over to the youngest chairman in GE's history.
Jack Welch inherited a company that was doing well but needed to change. To start with, Welch thought it had to get leaner. Within five years he removed one in four people from the GE payroll, earning the nickname, "Neutron Jack," because he eliminated the people but left the buildings.
Thirty-seven thousand of those people left right along with their business unit. Jack said that a GE business should be number one or two in its industry or it should be sold. Lots of businesses got sold.
But Welch didn't just take things away. He moved aggressively to change things. Processes like Work-Out opened up the system. The upgrades to training and the Crotonville facility gave GE a place to bring things together. And initiatives like globalization, move to services, e-business and Six Sigma changed the nature of GE as a company.
During Welch's tenure as CEO, revenues went from $26.8 billion to $130 billion. Capitalization went from a market value of $14 billion to one of more than $410 billion. And Fortune magazine named him "The Executive of the Century."
Now, it's Jeff Immelt's turn. And he's been in the job long enough that we can begin to see just how his idea of what GE should become differs from what GE has been.
Without much fanfare, he has softened the hard-line Welch dictum to fire the bottom ten percent, even though ranking is still in place. It's still taking shape, but one thing that looks certain is that Jeff Immelt's GE will be a bit more human and much more team oriented than the GE he inherited.
Besides being great CEOs, these three men seem to have very little in common. Jones was controlled and statesmanlike. Welch was the hard-charging hockey player. Immelt is the Ivy League athlete and fraternity president.
They do have one important thing in common, though. All three were shaped by GE's leadership development process.
Train and Develop
In over 100 years, every CEO but the first one, Thomas Edison, has come from inside the company. Eighty percent of senior managers are GE careerists. You've got to be good at development and make it a priority for that to happen.
At GE, it's a boss's job to develop subordinates and to identify high potential performers. That extends all the way to the top of the company where the CEO is involved in reviewing the performance and progress of GE's top potential executives.
The GE helps with lifetime career development for people that want it. Development includes permanent and temporary assignments that build both skills and visibility. It also includes training.
General Electric spends more than a billion dollars a year on training for people at all levels. Training is a reward for good performance. But it's much more than that.
GE understands that training is important for skill-building, but that it provides opportunity for other important things. At GE, training is a place to build relationships, to share ideas and to gain perspective.
Training is also the carrier of culture. It's where the company can present the important initiative of the moment and where senior executives can share values directly with newer managers.
At GE, training is very much a gathering and scattering phenomenon. Managers come together to learn, share and meet others. They scatter to put their learning and connections to work.
Then they gather again in a continuing cycle. It seems to work.
Think of it this way. A company can get lucky and wind up with a great CEO. But only a company where training and leadership development are a priority can come up with them one after another.
Leaders that come up through a program like GE's know the company and its strengths and weaknesses because they've been there are awhile. They can also take unpopular positions, or survive a period with a stagnant stock price because everyone expects them to be around for a long time to come.
Leadership for the Long Term
Jeff Immelt expects to be on the job for twenty years. The board has similar expectations. That creates a situation that's almost unique in publicly traded American companies.
Immelt doesn't have to do short term things to look good. He can concentrate on creating the kind of company GE should be to compete profitably in the decades to come.
If you're going to be around a long time, you can afford to resist the winds of fad. You don't have to make your mark quickly. You can take the time to do things right.
Take the Time to Do it Right
Companies today suffer from a kind of attention deficit hyperactivity disorder when it comes to initiatives. They run from finding their lost cheese to running their business like a fish market to discovering their strengths to learning the carrot principle, searching for the magic potion that will make all things profitable. But most don't stop long enough for anything to work. GE does.
Jack Welch was CEO of General Electric for twenty years. In that time, according to the man himself, he had four key initiatives. They were globalization, movement to services, e-business and Six Sigma.
The idea is to take the time to make sure the initiative is absorbed into the company and the culture. The values and skills that go with each initiative become part of training and performance evaluation and career development. Eventually they become part of the culture.
The Important Lessons
There are lots of lessons you can learn from GE about techniques and practices, but they're not the most important lessons. The most important lessons are the things that have made GE consistently competitive and profitable for more than a century.
What was great before won't be tomorrow. You have to keep constantly moving forward, changing and adapting to the world as it changes.
Growing your people is a key to long term competitive advantage. So training and development are both crucial, but training is more than skill development. It's where you develop the company of the future by developing relationships, inculcating culture and making your initiatives into realities.
Take the long view. That means a long term look at strategy. It means limiting your major change initiatives and giving them energy and the time to become part of the culture.
It sounds simple, and it is. It's just not easy. But GE is one good example of what it really takes to be a great company.
Wally Bock helps organizations improve productivity and morale, as well as deal with the challenges of massive Boomer retirements. Wally coaches individual managers, and is a popular speaker at meetings and conferences in the US and elsewhere. You can find out more about Wally and his work at his Three Star Leadership web site (http://www.threestarleadership.com/). This article first appeared in the Three Star Leadership Blog (http://blog.threestarleadership.com/)
Article Source: http://EzineArticles.com/?expert=Wally_Bock
"It's wrong for us," John grumbled, "We work in project teams. We shouldn't be competing with each other to see who stays and who goes."
No less an authority than Business Week has run stories implying that when Jim McNerny went from GE to 3M, he applied the "GE toolkit" in the form of Six Sigma. The results were mixed. Profits and share price went up. The company's reputation for innovation went down.
There was a time, not that long ago, when anything GE did was slavishly copied by companies everywhere. That time is gone. But you can still learn a lot from GE.
Whether you measure success by stock price, profits, innovation, flexibility or simply impact on society and business, General Electric is one of the world's great companies. So forget about Six Sigma, boundaryless organization, forced ranking, and even the vaunted GE toolkit. Pay attention instead to the things that have made GE a great company for so long.
GE History
In 1890, Thomas Edison brought all his companies into a single organization. He called it the Edison General Electric Company. In some ways he would recognize today's GE because many product lines are the same. GE has been doing business in lighting, transportation, industrial products, power transmission, and medical equipment since the beginning.
General Electric has always been seen as an important company. GE was one of the companies in the first Dow Jones Industrial Average in 1896. When the first Standard and Poor's 500 list was published in 1959, GE was in the top 100. It's the only company still there today.
GE has always been known for innovation. Product innovation has been important. GE established the first industrial research and development laboratory in Charles Steinmetz' barn in 1896.
And GE's innovation hasn't been limited to products. Throughout its history, the company has also been a pacesetter in corporate structure, strategy and management practice. That's one key reason why it's a different company today than it was a hundred or fifty or even ten years ago.
A Company is Like a River
Heraclitus said, "You can't step into the same river twice." Companies are like that, too. GE today is different from GE fifty, or even ten, years ago. That's illustrated by the last three CEOs.
When Reg Jones took over the top spot at GE in 1972, just about everyone outside the company thought things were great. Jones knew otherwise.
Working capital was anemic. He inherited an organizational structure where he had to work with three vice chairmen. There was no coherent strategy and there were threats on all sides.
He stopped the bleeding, solving the cash crisis within six months. Then he re-organized top management and created a coherent strategy. He left a record of 26 consecutive quarters of improved earnings and 14 percent compound growth in profits. He retired as "The Most Admired Businessman in America" and handed GE over to the youngest chairman in GE's history.
Jack Welch inherited a company that was doing well but needed to change. To start with, Welch thought it had to get leaner. Within five years he removed one in four people from the GE payroll, earning the nickname, "Neutron Jack," because he eliminated the people but left the buildings.
Thirty-seven thousand of those people left right along with their business unit. Jack said that a GE business should be number one or two in its industry or it should be sold. Lots of businesses got sold.
But Welch didn't just take things away. He moved aggressively to change things. Processes like Work-Out opened up the system. The upgrades to training and the Crotonville facility gave GE a place to bring things together. And initiatives like globalization, move to services, e-business and Six Sigma changed the nature of GE as a company.
During Welch's tenure as CEO, revenues went from $26.8 billion to $130 billion. Capitalization went from a market value of $14 billion to one of more than $410 billion. And Fortune magazine named him "The Executive of the Century."
Now, it's Jeff Immelt's turn. And he's been in the job long enough that we can begin to see just how his idea of what GE should become differs from what GE has been.
Without much fanfare, he has softened the hard-line Welch dictum to fire the bottom ten percent, even though ranking is still in place. It's still taking shape, but one thing that looks certain is that Jeff Immelt's GE will be a bit more human and much more team oriented than the GE he inherited.
Besides being great CEOs, these three men seem to have very little in common. Jones was controlled and statesmanlike. Welch was the hard-charging hockey player. Immelt is the Ivy League athlete and fraternity president.
They do have one important thing in common, though. All three were shaped by GE's leadership development process.
Train and Develop
In over 100 years, every CEO but the first one, Thomas Edison, has come from inside the company. Eighty percent of senior managers are GE careerists. You've got to be good at development and make it a priority for that to happen.
At GE, it's a boss's job to develop subordinates and to identify high potential performers. That extends all the way to the top of the company where the CEO is involved in reviewing the performance and progress of GE's top potential executives.
The GE helps with lifetime career development for people that want it. Development includes permanent and temporary assignments that build both skills and visibility. It also includes training.
General Electric spends more than a billion dollars a year on training for people at all levels. Training is a reward for good performance. But it's much more than that.
GE understands that training is important for skill-building, but that it provides opportunity for other important things. At GE, training is a place to build relationships, to share ideas and to gain perspective.
Training is also the carrier of culture. It's where the company can present the important initiative of the moment and where senior executives can share values directly with newer managers.
At GE, training is very much a gathering and scattering phenomenon. Managers come together to learn, share and meet others. They scatter to put their learning and connections to work.
Then they gather again in a continuing cycle. It seems to work.
Think of it this way. A company can get lucky and wind up with a great CEO. But only a company where training and leadership development are a priority can come up with them one after another.
Leaders that come up through a program like GE's know the company and its strengths and weaknesses because they've been there are awhile. They can also take unpopular positions, or survive a period with a stagnant stock price because everyone expects them to be around for a long time to come.
Leadership for the Long Term
Jeff Immelt expects to be on the job for twenty years. The board has similar expectations. That creates a situation that's almost unique in publicly traded American companies.
Immelt doesn't have to do short term things to look good. He can concentrate on creating the kind of company GE should be to compete profitably in the decades to come.
If you're going to be around a long time, you can afford to resist the winds of fad. You don't have to make your mark quickly. You can take the time to do things right.
Take the Time to Do it Right
Companies today suffer from a kind of attention deficit hyperactivity disorder when it comes to initiatives. They run from finding their lost cheese to running their business like a fish market to discovering their strengths to learning the carrot principle, searching for the magic potion that will make all things profitable. But most don't stop long enough for anything to work. GE does.
Jack Welch was CEO of General Electric for twenty years. In that time, according to the man himself, he had four key initiatives. They were globalization, movement to services, e-business and Six Sigma.
The idea is to take the time to make sure the initiative is absorbed into the company and the culture. The values and skills that go with each initiative become part of training and performance evaluation and career development. Eventually they become part of the culture.
The Important Lessons
There are lots of lessons you can learn from GE about techniques and practices, but they're not the most important lessons. The most important lessons are the things that have made GE consistently competitive and profitable for more than a century.
What was great before won't be tomorrow. You have to keep constantly moving forward, changing and adapting to the world as it changes.
Growing your people is a key to long term competitive advantage. So training and development are both crucial, but training is more than skill development. It's where you develop the company of the future by developing relationships, inculcating culture and making your initiatives into realities.
Take the long view. That means a long term look at strategy. It means limiting your major change initiatives and giving them energy and the time to become part of the culture.
It sounds simple, and it is. It's just not easy. But GE is one good example of what it really takes to be a great company.
Wally Bock helps organizations improve productivity and morale, as well as deal with the challenges of massive Boomer retirements. Wally coaches individual managers, and is a popular speaker at meetings and conferences in the US and elsewhere. You can find out more about Wally and his work at his Three Star Leadership web site (http://www.threestarleadership.com/). This article first appeared in the Three Star Leadership Blog (http://blog.threestarleadership.com/)
Article Source: http://EzineArticles.com/?expert=Wally_Bock
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