How culture will either make or break your change process

Posted on September 21, 2017 by Henrik Brabrand
Article image: Culture will make or break your change process

Assessing an organisation’s cultural readiness and its ability to adapt to change – combined with an evaluation of the need for cultural change – is key when evaluating how to move forward with a change process, writes Henrik Brabrand, CEO, TRANSEARCH International A/S (Denmark).

Your competitors can copy almost everything you do – except your culture. Cultural habits and norms are powerful preservers of the status quo. Therefore, it is essential to analyze and understand the key cultural indicators in order to fully understand, and navigate, within it. So, culture not only matters – it also has a profound effect on your life, the life of others, and on our work. In fact, businesses that do not measure and manage culture, is like a vessel with no course to navigate from.

Similarly, culture is a story and story is culture. Great organizations have a great story. In sharing that story, they outline; 1) where the business is heading, 2) what makes the organization special, 3) what those who lead the business believe in, and 4) how the business makes a difference in peoples’ lives.[1]

Culture exists in all organizations, and it has an important effect on the motivation and morale of its members. Culture is enacted through artifacts, values and basic assumptions that are both visible and invisible. Every company possesses a unique culture and, if you are new to the company, it is favorable if the company you are about to enter has a process in place that will help you navigate that culture and find your place within it. The reason being that a lack of cultural fit to the team and organization may well become a top barrier to success. In essence, cultural engagement is key to a successful transition, and in our experience, it is nearly impossible to recover from a mistaken cultural engagement choice.

A culture’s readiness for change

Assessing an organization’s cultural readiness and its ability to adapt to change – combined with an evaluation of the need for cultural change – is key when evaluating how to move forward with a change process. Be aware that the more influence an employee exerts in his/her role in the organization, the less prone she/he is to support an agenda for change since that may lead to a loss of power and prestige. All executives will invariably face a culture more or less ready/willing to change.

In his book, “First 90 Days”, Michael Watkins introduces the so-called STaRS-model which visualizes four business situations that leaders face – i.e. sustaining successturnaroundrealignment and start-up. Each of these encompasses a unique set of risks and opportunities and allows you to better understand the platform for change, alongside what tasks may be required in order to bring the organization forward.

 

Figure 1: STaRS model

Figure 1: The STaRS model—inspired by Watkins, Michael: “The First 90 Days,” Harvard Business School Press, 2003

 

When the key task is to get a new business or project launched, one is facing a start-upsituation, in which the primary task is to carry out the actions required in order to get the business or project off the ground. However, when the business that is to be taken over is either in dire straits or is moving in a troubled direction, one is more likely to be facing a turnaround situation, in which the primary task is getting the business back on its feet again. If it is only part of the business that is in trouble, you are looking at a realignment situationin which the primary task is to revitalize the troubled unit, product, or project, while preserving the well-functioning parts. Finally, if the business is already successful, one is in a situation where the challenge is to sustain success. Here, the primary task will be to preserve the vitality of the organization and to take it to the next level.

During each of these four business situations, employees’ attitudes and emotions tend to vary, and as depicted in figure 1, their perceptual foundations depend on the specific business situation and cultural offset. Thus, a leader must be sensitive towards such perceptual foundations and culture and apply various approaches depending on them. As the STaRS model depicts, in the sustaining-success situation, people are often (too) complacent – and thus, one’s mission should be to invent a new and engaging challenge or raison d’être in order to shift focus and activate employees.

In the realignment situation, people are often in denial or simply do not understand the gravity of the situation, for which reason the objective is to confront the organization with realities and show them a new direction and path. In the turnaroundsituation, employees are often close to despair – and thus, one needs to show them a way forward and a way out of the given situation, since the organization is often aware of their critical situation and open towards drastic changes. Finally, in the start-upsituation, employees are excited and ready to get a new business off the ground – and thus the mission will be to ensure that the organization is aligned, moving in the same direction, and to maintain their focus on the key priorities.

During ongoing change processes, it is often a balance of spending the necessary time on learning and diagnosing the culture, and on continuously moving forward and initiating changes. When it comes to start-up and turnaround situations, my experience concurs with Michael Watkins’ idea that because the organization is typically hungry for directions, focus should be on doing just that. Consequently, the leader will face the daunting task of making decisions that have not yet been fully elucidated, simply in order to ensure progress. On the contrary, when it comes to situations of realignment or sustaining success, largely, focus should be on learning rather than on doing. Often, one will be facing organizations that think they are currently successful and, thus, will be much more critical towards a new leader bringing on change too soon – simply because they do not see the need for change.

Each person within an organization will have their own view of the given situation that a company is in, along with a certain degree of change readiness unique to that particular person and business situation (see above). As a result, readiness to change requires a combination of self-awareness, will and skill – and if your due diligence process leads to deciding that a culture shift is required within the organisation, it is to be expected that some will support such conviction (contributors), that some will resist it (detractors), and that some will either be indifferent or momentarily passive (watchers). In the book, “The New Leader’s 100-Day Action Plan”, Bradt et al. advises you to start by turning contributors into team leaders, then to move the convincible watchers into contributors, and finally to get the detractors out of the way. Essentially, it is all about striking the right balance between perceived risks and rewards. Team members will make a simple calculation – i.e. “will I be better off now and/or over time, supporting the new leadership and her/his expressed need for cultural change, or will I be better off actively or passively resisting it?”.

The book offers three excellent ideas on how to incentivize the organization to support the need for cultural change:

  1. Change the organization and redistribute resources in favor of those team members and initiatives that support cultural change.
  2. Change the balance of incentives, including internal motivational factors (e.g., recognition, sense of choice, and sense of purpose) and external motivational factors (e.g., rewards and incentives) and ensure that they are aligned to support the desire of becoming a contributor.
  3. Ensure that the urgency of cultural change is communicated clearly and with relevance to the individual target groups.

Culture is at the heart of an organization and failing to consider the governing culture when planning for a change process will most probably limit chances of success.

 

[1] Burdett, John O: What is Culture? Paper. 2014.

About Henrik Brabrand

Henrik BrabrandHenrik Brabrand is the CEO and Partner of the TRANSEARCH office in Copenhagen. In the last decade, Henrik has held several leadership roles within top-tier executive search. He was formerly Senior Vice President and Vice President within the LEO Pharma Group, and later participated in a private equity financed Management-Buy-Out of the veterinary medicine and nutrition business. Prior to working in life sciences, Henrik served in the consumer and health industries - primarily in Country Manager positions. Originally, Henrik is educated in banking before pursuing academic studies, and served for more than three years as a Banker at Danske Bank Plc. Henrik holds a M.Sc., B.Sc. in Corporate Law and Economics, MMD and HD (U).

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