There has been little mention of culture in this programme for several reasons. Firstly, it’s very hard to define though it’s often used as shorthand for a very wide range of desirable and undesirable behaviours that are hard to explain or influence. Academics are deeply divided about its nature and, in our view, have added very little clarity to the discussion. Differing perspectives emphasise the values and behaviours demonstrated by senior team members on the one hand, or take more of a ‘bottom up’ perspective on the other.
Culture is important – we all know the value of open, trust-based relationships when we experience them – but attempts at ‘culture change’ can often be pointless. Culture is best understood as the cumulative outcome of all the factors that shape our working lives. This can include basic employment practices that either embody or undermine equality, equitable remuneration and security. Equally it reflects all the workplace practices described in the four Elements, and the values that underpin them. The design of these practices sends you very clear messages about whether you’re trusted, respected and treated as a whole person by your employer.
In short, positive organisational cultures are the product of evidence-based workplace practices associated with high performance and well-being, and grounded in values of openness, trust and respect. It is in this sense that Drucker’s famous “culture eats strategy for breakfast” quote becomes meaningful. But we also need to examine the role and impact of values themselves.
Many organisations place great store by their values. Words such as:
Integrity
Communication
Respect
Excellence
can be found in the lobbies of many corporate headquarters. But what do they mean in practice? We know that managers and employees alike are often deeply sceptical about ‘motherhood and apple pie’ words and slogans that seem to appear from nowhere, in whose formulation they have had no involvement, and which have little relationship to their actual experience of the workplace.
Yet values can also lead to transformation. When Skanska acquired various UK-Based construction firms at the beginning of the current century it inherited many undesirable practices, at odds with the Swedish parent company’s open and transparent culture and values.
Skanska made a clear commitment to break with the past. CEO Mike Putnam explained that:
Everybody in the UK talks about it but in the Skanska Group it is at a completely different level. When you have your values, you need to be visibly seen to follow them. The behaviour that backs up that leadership is absolutely crucial.
“Respect” is a word that recurs frequently in discussions with managers, union representatives and frontline staff alike. It is reflected in the company’s core values which aspire to zero accidents, zero environmental incidents, zero tolerance of bribery and corruption, and zero defects. Respect forms part of a culture which, it is intended will “penetrate the company’s DNA”, releasing employee voice at every level of the business. While hierarchical structures remain in the business, hierarchical management behaviour is increasingly out of place.
Yet such culture change was not an overnight journey. Change in Skanska was the result of a series of incremental initiatives that build on each other to create a sustainable momentum of change, reinforcing the company’s values through multiple channels and always exemplified by senior-level behaviours. For example, at least once a quarter – and often monthly – all management team meetings will spend half an hour exploring an ethical dilemma relevant to the business, either hypothetical or real. This reinforces the message to all managers that Skanska is a values-driven organisation.
A great starting point is to ask everyone in the organisation what matters to them at work., and how often they experience it positively – or not. As in Skanska, values derived from these conversations need to be followed by consistent and sometimes transformational measures, led by the senior team, to make them a reality in day-to-day working life.
Companies such as Google and Netflix use culture handbooks and presentations to reinforce the message that they are striving to be unlike traditional, hierarchical and rule-bound companies Entrepreneurial behaviour, ‘asking for forgiveness rather than permission’ and a responsibility to challenge are reinforced continually.
Download culture and values presentations from Google and Netflix.
GBS is a Swedish company and a global market leader in the industrial communications industry. The company has more than 500 employees and a growth-rate of about 20% annually.
Initially, the company’s growth was based on a clear vision of business interconnectedness, driven by innovative technology that allowed GBS’ customers to connect their devices into any of the many networks that became widely used in the industry. Subsequently the company refocused on growth and operational excellence, gradually replacing the core vision with an emphasis on more detailed plans. As the company expanded, these detailed plans began to take over as its primary instrument of guidance.
In short, GBS went through three phases: a “Market Establishment” phase (with a vision as their primary guideline), to a “Market Development” phase (with strategies as their primary guideline), and finally to a “Market Maturity” phase (with detailed plans their primary guideline).
Vision
Strategy
Plan
Market Establishment
Market Development
Market Maturity
During this phase companies have a strong “in-side-out” focus i.e. they are driven by their own vision and belief of what they want to accomplish, both from an offering point of view but also from a position point of view. They listen to the market and converts input into their own words and visions.
During this phase companies have tested their ideas and got a confirmation that they are on the right track. Now it’s time to listen to the market and improve/fine-tune the offer to fit customer’s needs. Good balance of “in-side-out” and “out-side-in” focus is the key to success.
During this phase the market has reach a mature state with a growing business and customer base – it’s time to harvest. The exotic initial offer might be seen more as a standard or even as a commodity. Focus is on keeping the offer fresh and attractive with a strong value, creating an “out-side-in” focus.
Ahrens (2003) – don’t develop what the customer wants, develop what they don’t know they need.
Ahrens (2003) – Put your ear to the ground and listen with passion to what the market has to say. Put new glasses on the customer.
Ahrens (2003) – Grow the product flower. Apply the sales cannon (aim, load, and fire).
The three phases of GBS, from vision to strategies and to detailed plans. Source: GBS
Employees developed different mindsets throughout these phases, and market maturity meant that most were focused on functional tasks and narrowly targets. The result was that GBS lost much of its ability to innovate and to adapt to alternative or disruptive market forces.
Going back is challenging. Faced with the need for innovation, employees asked, “how should we innovate?”, because they wanted detailed plans to guide them. However GBS came to realise that innovation requires the creation of a new and challenging vision rather than plans or KPIs. In short, it needs inspirational communication and passionate innovation champions who can push forward without any detailed plans. Its five driving concepts for the reignition of an innovation culture were:
Inspiration – “We want our leaders to provide us with a clear vision. We like when our leaders are hungry to win business and have a winning mindset. We like when we challenge ourselves. We want to be encouraged to innovate and to be recognised for our efforts.”
Excitement – “We have it a bit too good overall, and we want a little more urgency. We also want to lessen our heavy backpack and to try new things that are groundbreaking.”
Direction – “We need more support systems. We need a working innovation process with horizontal process owners that help across departments. We need a holistic view and focus. We need to invest time and resources into innovation. We need to set aside time for idea generation.”
Coherence – “We want to improve internal communication and collaboration between departments, as well as spreading and sharing more information with each other.”
Enlightenment – “We want to learn more about innovation. We want to learn more about customers and customer needs. We want to learn more about how our products are used. We want to learn more about how other companies work with innovation and innovation processes.”
Source: International Journal of Action Research (forthcoming)
Reference: Ahrens, T. 2003. Växa med framgång – tvåan vinner, Malmö, Liber Ekonomi Kristianstads Boktryckeri AB.
Forum topic: ‘Culture change’ is often discussed but hard to achieve. What has worked well in your experience?
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Guidance for Learning Log QuestionHere we are asking you describe what you think your workplace culture is and what contributes to establishing that culture. Are the values of the organisation clear, understood and demonstrated throughout the organisation? Have you tried to change anything and if so what happened?
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Guidance for Personal Reflection NoteHow do you ensure that you live the values of the organisation consistently, leading by example?
