Category: Organizational Culture

The Words Leaders Use Can Greatly Impact Performance

In getting their jobs done, executives and managers primarily deal in communications. This includes the spoken and written word, along with the behaviors associated with those words. Words in the English language are full of richness in meaning. Yet for all the richness, we in business tend to bend, borrow and, in some cases, overtly distort the meaning of words to fit our purposes. While this convenient borrowing serves near-term purposes, often the long-term consequences are that the implied meaning of words we use in business are confusing if not compromised. This increases the complication of situations and can lead us astray.

Words are full of meaning and message, and in business are theoretically assumed to describe behavior. When the behaviors of executives and managers are consistent with their words, a powerful dynamic is created. Consider that an operational definition of integrity is behavior that is consistent with words. Doing what we said we would do, or not doing what we said we would not do is an essential part of establishing credibility and integrity as an executive or manager. Conversely, saying one thing and behaving differently is a surefire way to send mixed messages to a group, organization or team. At the end of the day, communication, which is comprised of behavior and words, matters greatly.

The clarity and crispness in the meaning of words is important for executives and managers now more than ever. The challenges and complexities facing businesses continues to grow, which in turn demands accelerated changes, creative strategies, innovative business models, and new models for organizing. Yet many of the words which could be used in accelerating change have been used up. For example, breakthroughs are often what is needed in the business.

Breakthroughs

In the early days of organizational transformation, our firm piloted the use of language-based breakthrough principles. As an example, using breakthrough principles we contributed to the transformation of Ford Motor company in the 1980’s. Even with this outstanding success, we were very hesitant to use this term since it made many executives uncomfortable. When the word breakthrough was used, it was to delineate and designate an extraordinary accomplishment which would open huge new possibilities for the business. Then the term became widely used to describe products, most of which were anything but a breakthrough. Rather, they were unremarkable if not overtly forgettable. Along the way, a powerful word for use in describing organizational transformation was weakened. The cruel irony is that a word used to describe an important distinction in the transformation of Ford Motor Company was later used to describe a completely forgettable Cadillac product!

Culture

It is now widely accepted that an organization’s culture is important. Two leading scholars (James Heskett and John Kotter) from Harvard Business School conducted a study comparing the business outcomes for companies with good cultures and bad cultures. The results were stunning as can be seen in the chart below:

Average Increase for Twelve Firms with Performance-Enhancing Cultures Average Increase for Twenty Firms without Performance-Enhancing Cultures
Revenue Growth 682% 166%
Employment Growth 282% 36%
Stock Price Growth 901% 74%
Net Income Growth 756% 1%

 

Most of us agree that a good culture promotes change and success, while a bad culture stifles innovation and promotes bureaucracy which, in turn, inhibits growth and performance. While the word culture is widely used in business, its meaning has been compromised to become synonymous with principles and values. The assumption has become that the way to change culture is to change values. This is not accurate and contributes to many failed change projects. While values are one part of culture, they are not the part that drives most behavior and lays the foundation for culture.

Leadership & Management

Perhaps there is no better example of the misuse of terms than the words leadership and management. A quick glance at a good dictionary will demonstrate that the two terms have quite different meanings.

Leadership: “the actions of leading a group of people or an organization” and “the state of being a leader”

Management: “the process of dealing with or controlling things or people”

Both functions and roles are important in business organizations, yet they are different. Leadership is critical for success in creating strategies and implementing change. Yet in many organizations the two terms are used interchangeably. The management team is called a leadership team, yet all the topics and work are concerned with management, not leadership. The people on the leadership team do not possess leadership skills and show little interest in acquiring them. Calling a team of managers ‘our leadership team’ serves only to confuse the organization and reduce the probability that actual leadership will be exhibited, even when it is desperately needed.

Organization Design

Unfortunately, the two terms organizational design and organizational structure have also become synonymous terms. Both terms describe an important element for executives, yet what I consider the most important element of organizational design has by and large lost its meaning. Organizational structure deals with how formal authority is delegated and managed. For example, is the company organized around business units or does it function as one large company organized around functions? Further, the term organizational structure is also used to describe the reporting relationships within the organization. This is the most common use of the word, which translates to boxes and lines on an organizational chart. This structure is important for administering the functions and reporting relationships as well as providing clarity to employees. The structure is commonly thought of as the boxes and lines which depict the organization.

The challenges facing most business continue to increase because of accelerating rates of change, disruptive innovations and technologies, expanding expectations and sophistication of customers, increasing global competitors, regulatory changes, shareholders who want near term results, etc. In order to act on those challenges, executive must rethink how their organization can see and respond to these challenges. The executive must be intentional in designing their organization to increase its capability to explore possibilities, identify opportunities and threats, and ultimately act in extraordinary ways. Organizational design can be described as:

“Change the company’s most fundamental building blocks: how people in the company made decisions, adopted new behaviors, rewarded performance, agreed on commitments, managed information, made sense of that information, allocated responsibility, and connected with one another.”

The issues or problems come when organizational structure is misused by executives thinking about strategic challenges and creating strategic execution. The executives who confront external dynamics and strategic challenges move quickly to questions of how best to structure the organization. At times it appears that when executives are facing tough external challenges and changes in the market, they instead change the organizational structures, or restructure. It often appears that reorganization is chosen because they are not sure what else to do.

Redeployment

Redeployment is a special case for me. I was working on a book with my colleague and good friend, Francis Vidal. We were developing methods that companies could use to mobilize their organizations during times of change. I relocated my family to Paris so Francis and I could work together as consultants and develop our methodologies. We chose the term redeployment to describe our methods since the word redeployment is the same in both English and French. Unfortunately, during the time we were working on the book and building our common practice methods, the term redeployment took on new meaning in the U.S. Companies began using the term ‘redeployed’ to denote downsizing of employees. The term became synonymous with getting fired and outplacement. That simple change in the meaning of the word was the kiss of death to this practice in the U.S. and the usefulness of the book for KingChapman. So, we published the book in France, but not in the US.

Conclusion

Words are a primary tool for those in business. Words are full of meaning and message. Words are the basis for leadership. We use words to create new futures, bring clarity, raise awareness and inspire people. We must, however, remain alert to when our favorite words and terms have taken on additional meanings or lost their value to properly distinguish our intent.

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What Henry Cavendish Can Teach Us About Organizational Culture

Organizational culture is one of the most important and yet misunderstood aspects in business today. Culture has profound impact on a business organization’s performance. For example, a Harvard Business School study documented the significant impact of culture on performance. Heskett and Kotter documented the dramatic differences between companies with good cultures vs those with poor cultures on key performance measures. For example, the companies with good cultures achieved 756% growth in net income during the same time period that companies with poor performing culture saw just 1% net income growth.

Given the importance of culture on performance, one would assume that those of us in business would have an excellent understanding of what culture is. While this seems obvious, it is not the case. Most of us have an incomplete understanding of organizational culture. We assume that culture is:

  • The artifacts which can be seen in the organization. These artifacts include the behaviors which can be seen. It also includes how communication is delivered, the workplace is organized as well as how practices and processes deployed. While declaration is given that those artifacts are the culture, less consideration is given as to why those artifacts occur. Said differently, identifying what the cultural artifacts are is useful, however, meaningful change can occur only after determining why that culture occurs.
  • The values of the organization. It is common practice for executives who seek to change or improve their organization’s culture to use exercises to develop the exact wording for the desired values and principles of the organization. The assumption is that by identifying and claiming these new values that they will now occur in the culture. While this is a popular approach to culture change, it seldom works out for any length of time.

So, the state of play is that we have strong evidence that culture has significant impact on an organization’s performance, yet we do not have a good understanding of what or why a culture is or how to improve it. This is startling given that we have spent most of our lives in some form of organization, each of which had unique cultures. Think about it, most of us went to kindergarten or preschool before we were age six and have been in various organizations ever since. Each of these organizations had distinct cultures which impacted our experience, yet we do not have a good understanding of organizational cultures. This is because the culture of the organization was established before we arrived in that organization and functioned so much in the background that we could not see it. Chances are we felt the impacts of the culture from time to time, but never were able to see the entire culture nor understand the origins of the culture.

Who Discovered Water?

This reminds me of one of my favorite rhetorical questions that I use in helping others understand culture. The question is “who discovered water?” Think about it. We take water so much for granted that at first the question seems daft or stupid. Yet thinking provides an important clue in understanding organizational culture.

One response to this question that I like is “I don’t know, but I’m pretty sure it wasn’t the fish.” This response has an interesting parallel to our experience with cultures. The fish spends all its entire life in water and yet it has no concept of water. The fish begins to experience water only when it is pulled out of the water; that is, when some fundamental change occurs. Often that is how we first begin to encounter culture -when some fundamental changes occur.

The question remains “Who invented water?” This question brings us to the title of this blog: What Henry Cavendish Can Teach Us About Organizational Culture? If you do a search for the question “Who invented water?”, the most common answer is Henry Cavendish. A sample response is:

Henry Cavendish. (1731 – 1810) was a chemist, who discovered the composition of water, when he experimented with hydrogen and oxygen and mixed these elements together to create an explosion (oxyhydrogen effect).

Consequently, Cavendish is generally credited with discovering water. A more thorough description of Cavendish’s is:

A natural philosopher, the greatest experimental and theoretical English chemist and physicist of his age, Henry Cavendish (10 Oct. 1731 – 24 Feb. 1810) was distinguished for great accuracy and precision in researches into the composition of atmospheric air, the properties of different gases, the synthesis of water, the law governing electrical attraction and repulsion, and calculations of the density (and hence the weight) of the Earth.

The story of Henry Cavendish is fascinating. He was born into English aristocracy. His father, Lord Charles Cavendish, was active in politics and science. Henry was painfully shy and had no interest in politics, however, he did share his father’s passion for science. His father introduced Henry to the Royal Society, where he became an active member. He spent his life involved in a wide range of problem solving and research. He was a pioneer in scientific research and discovery. So, what can we learn from Henry Cavendish that helps us understand organizational culture?

Lessons on Organizational Culture from Cavendish

The statement “Cavendish was distinguished for great accuracy and precision in researches” gives us a clue and says much about his approach to problem solving. Cavendish experimented to increase the understanding of complex phenomenon. He was also noted for his great accuracy and precision. Perhaps the first lesson from Cavendish for us about culture is experimentation. I frequently encounter executives who think they know culture and consequently have closed off inquiry and thinking strategically about culture. I use this expression know culture to describe a mindset which I frequently encounter that executives have:

  • Read articles about culture
  • Been involved in processes to identify the organization’s values
  • Can talk convincingly about the importance of culture to performance of business

Unfortunately, this is based on surface level understanding of culture which in turn provides little access to action. What most of us miss is that there is a third level of culture which determines how the organization functions.

The Third Level of Culture

Edgar Schein first identified this third level which he called Basic or Tacit Assumptions. This third level is based on the shared learning of the group which is used in orienting new people to the organization and has over time become so taken for granted that it is no longer visible to participants in the organization. It becomes the context for that organization.

To deepen our understanding of culture, let’s think about how this context based on tacit assumptions is formed. An organization’s culture begins forming as soon as people come together as a group to address a common opportunity or problem. The culture begins being shaped by the attitudes, decisions and learning of this group. Cultures are built on shared learning by the group as to what works and what produces success and/or avoids failure. Each culture is unique since it is shaped by the nationalities of people involved, personalities of early leaders, professional backgrounds, technologies with which working, etc. Over time there is additional experiences and shared learning by the group which modify and refine the culture. Once we understand how culture is created, we realize that every organization’s culture is unique and so complex that it is virtually impossible to completely know or understand. The most we can hope to achieve is learning enough about how a culture functions that we can develop possible interventions.

Edgar Schein uses the concept of human personality as an analogy to demonstrate that culture is way too complex to understand. He says, “Culture in that sense is like personality or character for an individual, once you’ve learned to be a certain kind of person that is you in all aspects of your functioning and you don’t want to be any different. Which is why culture is hard to change.

Schein advocates identifying a specific problem or issue that needs to be addressed, and then begins inquiring into the nature of that problem. The assertion is that the presenting problem will likely reflect deeper issues in the organization which can only be identified and addressed through this inquiry. This is where Henry Cavendish can teach us about great accuracy and precision. Cavendish discovered water by identifying the component parts and seeing how these parts interact with each other. As we start to examine a particular problem or opportunity to identify how the culture is influencing it, we want to avoid introducing our favorite explanations or theories. Instead we want to use “great accuracy and precision” which was the hallmark of Cavendish’s career. We want to examine and observe based on what presents itself, rather than our opinions about what is being seen.

Application

At KingChapman we assist clients to develop strategies to change their culture and transform their organization. This intervention begins with identifying the Default Future of their organization. The Default Future is what is going to happen if nothing dramatically changes. That is, if the organization continues on auto pilot what will probably occur. This Default Future is based on the current context and is business as usual. Once the Default Future is identified, the question is “Do you want it?” If the answer is yes, then no further changes are needed.

If the answer is a rousing no (often expressed as “Hell No!”), then the next step is to design a new future which is more attractive and robust for the organization. The next step is to create a new future in which dramatic cultural change and performance improvements occurs. We call this the Invented Future since it is created or literally made up. The Invented Future provides a platform from which clients can see the existing culture as well as design changes in the culture which will enable the organization to make dramatic improvements.

In order to determine areas of the culture which need to be changed, we at KingChapman use our Breakdown Methods. We say that a breakdown is an interruption of a commitment. That is, a group of people are committed to something and for whatever reason that commitment is not kept. This lack of keeping a commitment provides a view for our clients to inquire into the bedrock of their culture, which is the tacit assumptions. Using the Breakdown Methods as a tool, clients are able to separate the observable facts from the opinions and stories which invariably accompany any perceived problem. This separating of observable facts from opinions allows our clients to clearly see a specific part of their culture that is causing problems and interfering with improvements. And with this clear vision of it, clients can see and address the underlying implicit assumptions to implement changes which will improve organizational performance.

What our clients find when they declare a breakdown and begin inquiring into the breakdown is that an unexpected element of the culture has shown itself and caused unexpected behavior by people in the organization. Something surprising occurs. When our methodology is used to identify and inquire into problems which are a reflection of commitments being kept, our clients see specific examples of how a culture is impacting performance. With these insights, our clients can create new ways of thinking and approaching understanding the culture and ultimately making the desired changes.

Conclusion

Who discovered water? Henry Cavendish. What can he teach us about organizational culture? To inquire and observe using great accuracy and precision about how the context and tacit assumptions shape how an organizational culture perceives situations and elicits specific actions. Through great accuracy and precision, we are able to discover the third level of culture which will allow us to be successful in making  changes in organizational culture.

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How Hollywood Might Depict Changing Organizational Culture

Most of us love movies and TV shows because it allows us to look in on characters and situations to see how things play out. Recently there has been fascinating news coverage and social media chatter about the unexpected ending to Game of Thrones. Many people are outraged at the treatment of their favorite characters. In a similar time frame, the long running TV sitcom Big Bang Theory also completed its story. While there was not as much angst and upset as with Game of Thrones, there still were plenty of points of view on how it should have ended.

This recent news got me thinking how Hollywood writers would develop a script about executives involved in changing organizational culture. What would the story line be and who would be the main characters? How might this story play out?

If we assume the screen writers looked on the internet for guidance and used the prevailing mindset about changing organizational culture, then we could expect a hero or two who were inspiring. This inspiration would be geared toward helping groups of people find new values, which in turn changed the values in the organization.

  • Given that, what movies come to mind which are inspiring?
  • What would be your list of top 10?
  • Would you include any of the following?
  • If asked to name movies which depict how you think about changing a culture, which movies would you pick?
  • Would you think of movies which you found inspiring?

Top 10 Most Inspirational Movies

  1. Forrest Gump
  2. The Shawshank Redemption
  3. The Pursuit of Happiness
  4. The Blind Side
  5. 3 Idiots
  6. Rocky
  7. Braveheart
  8. Remember the Titans
  9. 127 Hours
  10. It’s a Wonderful Life

This list is from a blog entitled Top Ten Most Inspirational Movies of All Time. We think that changing organizational culture should look heroic and inspiring. In most movies, we can see who or what the obstacle is and what is needed to overcome. With that insight we can imagine how the story should play out.

Misunderstandings About Organizational Culture

At this point in time there is little doubt that the quality of an organizational culture has profound impact on the performance of an organization. Given the magnitude of the impact of culture on performance, one would think that those of us in business would be very knowledgeable about what culture is and how to improve it. Nothing could be further from the case. Most of us have an incomplete and superficial view of what constitutes organizational culture and how culture can be changed. The “prevailing wisdom” is that culture is the values and principles of an organization. We assume that what is needed to change culture is to articulate some lofty and inspiring principles and values. Culture change will be based on inspiration and look like the first list of films. We assume that if we articulate inspiring principles and values that surely people in the organization will adopt them and the culture will change. Oh, were it that easy.

While values and principles are an important element in culture there is much more to the story. Culture is comprised of:

  • Artifacts of behavior, processes and structures. These are the things that are visible to people in the organization. Most employees see these artifacts as indicating what the “real culture is”.
  • Values and principles. Unfortunately, in many organizations the artifacts which people can feel and see are disconnected from the values and principles.
  • Tacit assumptions. These assumptions are developed over time through shared learning by groups of people in the organizations. These tacit assumptions are passed on to new employees joining the company as how to fit in and succeed in this organization. In most organizations these tacit assumptions are so taken for granted as to be invisible to most people in the organization yet form the context for the organization.

Changing or improving organizational culture requires digging in to understand this third level of tacit assumptions. It is tedious and tense work … which I think Hollywood would depict in very different ways if the screenwriters actually understood what’s required to change culture. That’s why I have a different list of movies that I think best describe organizational culture change.

Movies That Describe Organizational Culture

  1. The Abyss
  2. Armageddon
  3. Lethal Weapon 3
  4. Blown Away
  5. Juggernaut
  6. Fight Club
  7. The Shadow
  8. Die Hard with A Vengeance
  9. MacGruber
  10. The Rock

When you look at that list, what comes to mind? If I told you those were the Top Ten movies on a list, what do you think is the criteria for being on that list?

This list is from a blog entitled, Top 10 Wire-Cutting Bomb Moments in Film. You are likely thinking of wire cutting to defuse a bomb as a curious choice to depict what changing organizational culture looks like. Yet it is, so read on.

Think about watching movies when a bomb squad specialist in working to defuse a bomb. What did you see? Painstaking actions to understand how the bomb was built as well as how it can be deconstructed. Each move is calculated based on understanding the unique attributes of the bomb rather than assuming that all bombs are made the same. The actions are calculated and focused to take each step, which will lead to the next step. Hurry and shortcuts are not a formula for success in deconstructing bombs… nor is a good formula for deconstructing cultures in order to see a path to making changes in the culture.

The similarities of wire-cutting bomb movies and organizational culture is this: we have a vague understanding of how either works. The difference is we know that we know very little about defusing bombs, while most of us think we know much more about how organizational culture works than we actually do.

Organizational culture is the shared learning by groups of people in the organization. This shared learning involves what produces success and survival of the organization. As an organization matures these “shared learnings” are passed on to new people who join the organization. At some point these shared learnings become so imbedded in the organization that it “disappears” into the background and can no longer be seen by those in the organization. While it is “invisible” to members of the organization, this imbedded share learning has significant impact on how things are perceived and acted on.

Organizational cultures are much more complex that we realize. In fact, cultures are so complex that is hard to comprehend how the culture developed over time or how the culture shapes behaviors and performance of the organization. Edgar Schein is the preeminent authority on organizational culture. He has consulted with and studied cultures for over fifty years. He has also written the definitive text on organizational cultures and leadershipSchein says that cultures are so complex and large that it is impossible to comprehend and study. He uses an analogy of human personality. He says imagine that you have decided that you want to change all of your personality. How would that work? It would not. Personality is too well established to be amenable to wholesale changes. Schein says that the best you can do is identify an aspect of your personality which is causing problems, e.g., over eating or too much drinking. It is possible to work on that specific problem related to one’s personality … albeit a huge challenge.

The Great Irony

Think how ironic it is that we know so little about the culture of organization. How is that possible given we have had a lifetime of experience in organizations with distinct and unique cultures and yet work with a superficial understanding?

We all have grown up in complex organizations with clear cultures, called schools. We started in elementary school which had a distinct culture. We then moved on to middle school and then high school. Then many of us went on to universities, which also have clear cultures which are quite unique from high school. After our university experiences we took our first job with a company, whose organizational culture was probably very unique from our educational experiences. Many of us have had several to many different jobs in different organizations. Each time we enter a new organization we sense the uniqueness of the cultures, and our capacity to see this uniqueness fades as we come to feel at home in this organization.

With all this experience in entering and adapting to unique cultures, it would seem like we would be experts at understanding how cultures work. Yet we are not. That is because the nature of cultures is so pervasive that it is very hard to see except when first entering the organization. After a relatively short time we become part of the culture and can no longer see the particular distinctiveness of our new organization. We come to function within the culture without being able to see it per se. This is because a primary role of culture is to show new people to the organization how to fit in and behave in the organization.

Summary

Organizational culture has a significant impact on organizational culture performance, yet most of us in organizations have an incomplete understanding of what constitutes culture. If we are to improve organizational performance by changing the organization’s culture, we will need to look past the superficial concept that simply changing the values will change the culture. The best approach is to carefully understand how the specific culture you are dealing with developed over time and then identify specific problems which can serve as the “wires to cut” in defusing the complexity that every culture has.

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Fingerprints of Organizational Transformation

I frequently hear the question, “How do I know that we are doing the right things to execute our growth strategies and transform our organization?” What a great question! To have the insight to craft such a question, one has to be aware that executing strategies and transforming organizations requires something “out of the ordinary”. Success in creating value through growth strategies and transformation requires an exceptional approach. Simply doing more of the same is unlikely to be successful, so something out of the ordinary is required. This level of change requires strong leadership. It will not happen simply through good management. Strong leadership must be actively involved.

This brings us to the question of “how do I know we are doing the right things?”

The answers center around:

* “Are you being a leader?”

* “Can your leadership fingerprints be seen on the execution actions and change efforts?”

Leadership is not a position, role or title. It is a state of being by a person who is committed to exceptional results / value creation and knows that success will require intense involvement of others. Thinking about how to involve others brings us to the fingerprints, or more specifically the thumbprints of transformation. We at KingChapman have used the term “Thumbprint” to refer to the important elements for success in organizational transformation. We began asking “when we look back at successful transformations, what evidence do we see which identifies successful practices?” This is akin to how forensic scientists look for evidence of fingerprints at a crime scene. Fingerprints are the chemical traces of the impressions from the frictional ridges of the hand which are transferred onto a surface. The best surfaces are hard, like glass or wood.

Importance of “Prints”

So why has fingerprint been the gold standard for identification for well over one hundred years? It is because human fingerprints are quite detailed, difficult to alter and change little during the life of an individual. This makes fingerprints a good identifier of identity over the long term. Thumbprints are particularly effective as identification. As an example, the Texas Bankers Association developed a fraud prevention program called the Thumbprint Signature Program.

Under this program people who wanted to cash a check were asked to place an impression of their thumbprint on the face of the check using a small inkless touchpad. This program found that few who were intentionally seeking to commit check fraud would leave their thumbprint. Of course, those who did left a positive identification which could be turned over to the police for further investigation and prosecution.

The term thumbprint is also used to say that it has a distinctive identifying characteristic. Harper Collins Dictionary adds “If you say that something such as a project has someone’s thumbprint on it, you mean that it has features that make it obvious that they have been involved with it”. It is in this light that we refer to our Transformational Thumbprint.

KingChapman’s Transformational Thumbprint

The elements in the Thumbprint initially came from our team asking, “what factors have we seen in the successful transformations in which we were involved?” At first, we were simply making note of these factors, without trying to draw inference to what drove success. Then, over time we observed that when we were able to get the client to include these elements, the projects were more successful. Additionally, we have collaborated with other consultants and have learned from their experiences as well.

KingChapman’s Transformational Thumbprint include:

1. Strong Leadership

2. Communicating a Clear and Compelling Business Case for Change

3. Achieving a New Context

4. Establishing Urgency for Action

5. Selecting Aspirational Outcomes

6. Inventing a Compelling Future for the Business

7. Rigorously Assessing Current Conditions and Performance

8. Formulating Strategies to Create Value and Achieve the Invented Future

9. Creating Scorecards with Clear Metrics & Milestones

10. Building an Accountability Structure for Leading the Transformation

11. Implementing Transformational Strategies via Breakthrough Projects

12. Just-In-Time Training in Producing Breakthroughs

13. Communicating, Communicating, Communicating

14. Enrolling Stakeholders

15. Changing Mindsets

16. Assuring Frontline Employees Feel Ownership of the Transformation

17. Choosing the Best Talent

18. Building Capabilities in the Organization

19. Sustaining Energy for Involvement & Transformation

20. Delivering Results & Not Accepting Excuses

21. Sharing Learning Throughout the Organization

22. Evaluating Results Achieved and Planning Next Steps

Conclusion

The ‘Thumbprint’ represents the features that confirm leaders have been involved in executing strategies which transform organizations. None of these features is beyond the wit of man to implement. Successful implementation of these features requires commitment, passion and time.

 

Just as police investigators search for fingerprints at a crime scene, we were interested in identifying the “fingerprints” left behind by a successful organizational transformation.

Download our whitepaper:
“Transformational Thumbprint” and learn more about the 22 critical success factors for implementing organizational transformation.

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How the Tangram Became Our Metaphor for Transformation

We were blown away – so simple and yet so . . . perfect!

When we began working with Neos Marketing, we posed a simple request – is there a way to demonstrate “transformation”, either visually or physically? Neos took up the challenge. And the result was brilliant!

First – a brief definition for transformation (from Webster’s Dictionary):

transform, v.

Etymology: < Latin transformāre, < trans- prefix + formāre to form, < forma form. Compare French transformer (14th cent. in Godefroy Compl.), also Old French tresformer

1. a. trans. To change the form of; to change into another shape or form; to metamorphose.

b. transf. To change in character or condition; to alter in function or nature.

2. intr. To undergo a change of form or nature; to change.

1. The action of transforming or fact of being transformed.

– a. The action of changing in form, shape, or appearance; metamorphosis.

– b. A changed form; a person or thing transformed.

2. transf. A complete change in character, condition, etc.

So how we can show people a visual representation of that? By using a metaphor.

Metaphor for Transformation

When we speak about organizational transformation, which is the bread and butter of our practice, we are using the definition:

“To change in character or condition; to alter in function or nature.”

We have been fortunate as a firm to have worked with many organizations over the past thirty years with their transformational efforts. Any organization wanting to “transform” is really wanting to realize a complete change in their character, condition, etc.

A few examples, expressed in the client’s words:

  • “from a declining business in a declining market, to a growing business winning in the marketplace”
  • “from a product centric business, to a customer centric business”
  • “from a business struggling to survive, to a darling of Wall Street”

As you can see from these simple expressions, the organizations pursuing their transformation were not interested in incremental improvements, which definitely have their place in any successful business. The transformational aspect for these organizations represented significant changes, in order to deliver a step change in performance. These were big changes, and big deal changes. As KingChapman’s tag line suggests:

Big Growth Requires Big Change

Big Change Demands Big Leadership

So, our request to our partners at Neos Marketing was with this understanding of transformation in mind.

When Neos came up with the idea of tangrams, to be honest, I had to look the word up before I knew what they were talking about!

What is a Tangram?

The tangram is a dissection puzzle consisting of seven flat shapes, called tans, which are put together to form shapes. The objective of the puzzle is to form a specific shape (given only an outline or silhouette) using all seven pieces, which may not overlap. It is believed to have been invented in China and carried over to Europe by trading ships in the early 19th century. A Chinese psychologist has termed the tangram “the earliest psychological test in the world”, albeit one made for entertainment rather than for analysis.

This is an example:

 

Why were we so excited with this idea?

We at KingChapman believe in the people inside our client organizations, because we have seen for decades how much people can do if they are given the right mix of best practices and expertise that we bring to our clients. We have seen people achieve amazing results, make great changes in the approaches to their businesses, think about themselves and their companies in new and different ways – all in the pursuit of making the transformation happen in their organizations.

So just like the tangram can change into different shapes, so too can organizations make major changes happen that add material value to themselves, their owners, their employees, their communities and their customers.

Same components + different shape = a transformation

Part of our ‘secret sauce’ in working with organizations that are engaged in a transformational effort is making certain that leaders in the organization are also transforming in the process. As our tagline above says, ‘big change demands big leadership’ in any transformational effort.

How do the leaders change? They grow / expand / develop their leadership capabilities and competencies.

And why do they do this? Because this is what it takes for any organization to truly transform – everyone in the company must transform as well, starting with the leaders of the organization.

Our many thanks to the team at Neos Marketing. This tangram idea is a brilliant demonstration of what KingChapman is all about – transformation of organizations to drive big time gains in value.

 

Another way to drive transformation in organizations is through a ‘breakthrough project’.  To learn more about how to implement this in your organization, download our white paper, “7 Elements for Chartering a Breakthrough Project”.

In it you will learn:

  • what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
  • why creating a ‘charter’ is a critical step in the process
  • the critical roles that key people must play in the project to enhance success
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Change Leadership: Why is Change So Hard, Even When You Want to?

Quite a few years ago, I was hitting golf balls with my 5-iron, when Kelly, my golf instructor, asked “Larry, what do you want to get out of your lesson today?” I told him of my frustration of hitting a short 150 yard slice (ugly) and I want to hit a 175 yard shot with a slight draw (beautiful!). After hitting a few balls, Kelly showed me a “strong grip” – which is not about how firm to hold the club, but rather the location of the hands on the club.

I tried hitting the ball using this new grip, and I swear, I could hardly get the club face on the ball. After a number of tries, I turned and looked at Kelly and said in frustration, “Kelly, I can’t hit the ball this way. It just feels too strange. Let me go back to my old grip and show me something else!”

I will never forget the look on Kelly’s face. He said, “But Larry, it is SUPPOSED TO FEEL STRANGE! If it doesn’t feel strange, then there is no change, and if you don’t change, you will never hit a 5-iron 175 yards with a slight draw!”

What a lesson! Yes, I can still hit that shot, but that’s really not the point. The biggest lesson for me was, how change can be so difficult, even when I wanted to result of the change! Here I was, a relatively inexperienced golfer, wanting to become a much better golfer, and yet, making the change was so challenging.

Why is Change Hard? Cognitive Bias

Haven’t you ever wondered why it is that change can be so difficult, hard, upsetting, takes a long time, challenging – even when the business case for the change is so promising? These are but a few of the many descriptions that any of us have experienced when going through some change. Whether it’s landing a new client, going to a new job, changing strategic direction, learning a new software program, acquiring or being acquired, or combining corporate entities – all are ripe with changes, some small and some big.

We can look to the decades-long studies of Cognitive Bias to help shed some light on possible answers to this question: Why is change hard?

Cognitive bias can be loosely defined as a systematic, automatic pattern of observing or evaluating things around us, and from this, draw conclusions, make decisions, and behave in ways consistent with these biases. Part of what it is to be a human being includes cognitive bias.

In fact, when you really study different biases that we all have, it is obvious that cognitive bias is a way of describing the way our brains work, and have been working for generations, which allowed our species to survive. Many cognitive biases are so automatic that they don’t seem like a bias at all.

For example, if you look at the following illustration, what do you see?

dots.png

Is your answer: A box? A square? 9 random dots?

We generally would not see “9 random dots”, although technically that is exactly what is shown. We can’t help but see a box, or a square, or some pattern. So one type of cognitive bias – we look for patterns in things. In the illustration above, try NOT to see a pattern.

3 Types of Cognitive Bias

Here are a 3 types of possible cognitive biases that could explain why change can be so difficult, even when we WANT to change:

Congruence Bias

Congruence Bias is the tendency to test hypotheses exclusively through direct testing, instead of testing possible alternative hypotheses (indirect). The classic example was discovered by Peter Wason who presented subjects with a number sequence “2, 4, 6”, telling the subjects that the sequence followed a particular rule and instructing them to use logic to find the sequence logic.

  • When asked for their answer, they responded with “ascending by + 2”.
  • When told they were wrong, they then guessed “the previous two numbers summed equals the next number”, which was also incorrect.
  • Most participants felt much stress and confusion by the test although the answer was simply “a group of numbers that are ascending”.

We often will jump to a conclusion especially if we perceive a pattern. Thus, instead of a subject testing to see if saying “5” was the wrong answer (thus proving their theory) they instead decided to test numbers they thought would be true.

Loss Aversion Bias

This is the natural tendency for humans to value avoiding loss much higher than the risk of potential, even if that potential gain far outweighs the potential loss. Studies have shown that the pain of a loss is almost twice as strong as the reward felt from a gain.

Status Quo Bias

This is an emotional bias; a preference for the current state of affairs. The current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss no matter how irrational.

So you can imagine that when someone has done something the same way for a long time, and they have been rewarded for delivering a given result as a consequence of that, trying to change could be very challenging. After all, they are losing the tried and true way of getting something done. And losing their status quo way is more painful than the potential of some gain based on changing.

The Real Problem and What is Required

Now for the alarming part. Yes, we can hypothesize why change can be so challenging. And we can describe behaviors and actions, and justify it because of what we know about change. But this is woefully insufficient in MOST major change initiatives, due to enormous consequences from error (energy industry as an example).

We see little evidence of cognitive bias being acted on in many industries, including the energy industry. What we see are engineering approaches designed to control cognitive biases through tight processes and technology – and these approaches do not work. If you visit company training centers you will see impressive programs and technologies, but little to no awareness of cognitive factors. If you speak to energy executives about cognitive biases you will likely hear some version of “we are attempting to engineer it out via processes and training”. Cognitive bias is NOT controlled by process nor eliminated by training.

What is required is changing people’s actions and collaboration between people… change leadership. This uses the creativity and resourcefulness of people to learn and to be engaged. Action requires strong leadership commitment – really transformational leadership – given very fundamental contexts and cognitive biases will be challenged.

Our approach at KingChapman is to recognize these challenges in any change scenario, and to provide the guidance and direction to transformational leadership as a successful way of making these changes.

 

 

Half of M&A transactions fail to create value. Ever wonder why? Download our whitepaper ‘The Conundrum of People in M&A’, and understand the critical elements that impact mergers and acquisitions success or failure.


In it, you will learn:

  • Eight common flaws in decision-making often made by executives in M&A transactions
  • Why the integration process is so critical
  • Tactics in organizing, planning, and communicating that lead to successful integrations
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Leadership Team Development When ‘Not a Strategic Bone in the Body’

This colorful phrase came from a CEO. I don’t know if he invented it or borrowed it from someone else. I worked with this new CEO to create new strategies for several of the large businesses in his portfolio. This CEO had been promoted up from one of the business units and had little experience with the other larger business units. These businesses were in the down part of the cycle, which created a challenging period for his company. Our challenge was to learn as much as we could, as quickly as possible to support the business unit executives in dramatically improving their businesses. We spent endless hours in strategic review sessions as well as a lot of time on the airplane moving between locations. Often at the end of a grueling day of leadership team development and business review, we would pile onto the plane to reflect on the day. It was at this time the assessment “not a strategic bone in the body” could be used when describing the management team.

It’s wasn’t that these executives were not intelligent – they were. Nor was it that they didn’t know their businesses – they did. Unfortunately though, all they knew was the operational side of the business. For quite some time there had been a lack of organizational accountability for strategic thinking. Consequently, these executives did not recognize that operations and strategy were different. They were “out of balance”, in that they were strong on operations and weak on strategy. The lack of balance between operations and strategy was an issue for the previous CEO, which was part of the reason my client was hired to replace him. This body was in definite need of leadership team development, particularly in the area of strategic thinking.

These executives could go into great detail with operational data. They knew their “facts and figures”. What they were missing was strategic thinking about what the data indicated, as well as the strategic factors that were influencing the data. They knew that the level of housing starts in the US was lower and that was affecting their business. Little thought had been given, however, to what was causing the slowdown in housing starts and how these reasons might affect future market levels. Instead, there was the assumption that the market for their products would come back and they would be ready when it did. In fact, they had invented a term to describe their positioning: “Profit Ready”. Unfortunately, “Profit Ready” was based on assumptions that the market would come back just as it was before the downturn. It also provided excuses for not thinking strategically about changes that could be made, as well as risks that could be mitigated.

The Challenge

As a consultant working with this executive team, one of the challenges I faced was assuring we did not fall into scapegoating these various executives. While it was frustrating to sit in sessions with these highly-compensated executives and observe their limitation as strategic thinkers, I kept reminding myself and our team that these executives were the product of the organizational culture.

Our task was to create a breakthrough design for rapidly developing executives into business strategists. We began by communicating the need for strategic thinking and assisting the executives who were willing to develop as quickly as possible. Learning to becoming a strategist while in an executive role is a major challenge, akin to learning to downhill ski or play golf as an adult. While observing children learning those sports is thrilling, the same cannot be said of watching adults do the same.

The Interventions

Teaching an executive to be a strategist requires the following actions:

  • Stop the charade. At first some of the executives were in denial and would push back. This pushback was usually in hopes that the new CEO would back off. The CEO, however, was direct and forceful about ending the pretense. For some of the executives, the road ended here. They were unable or unwilling to acknowledge the situation, and made no further development.
  • Acknowledge difference between operations and strategies. Both are important, just different. The executives could delegate most of the operational focus to others in the organization, and focus on strategic thinking. The pivotal first step was recognizing the distinction between the two.
  • Acknowledge difference between leaders and managers. Again, both are important, just different. The executives were highly trained as managers, and were good at it. While the term leadership was used widely in these businesses, there was little understanding of what it is. These businesses were classic examples of what John Kotter calls “Over-managed and Under-led.”
  • Value the attributes and behaviors of strategic thinking. The culture needed to be transformed. The important strategic behaviors of inquiry, continuing to question rather than moving to a conclusion, and allowing ambiguity to persist are the opposite of desired behaviors in an operational context. Attitudes and behaviors which are rewarded in the strategic arena are likely punished in operational areas.
  • Encourage thinking about the future rather than the past. Effective strategies deal with the future and do not assume the future is a continuation of the past. These executives had assumed their forecasting based on past performance was strategic thinking. That is flawed thinking.
  • Stop relying on ‘knowing’ as the future is not known. Since the future has not happened, it cannot be known. This is quite frustrating to managers with engineering and technical backgrounds. Their training and skill set comes from facts and knowing. Yet facts and knowing are rooted in the past. Overuse of facts and knowing inadvertently pulls the mind back into the past, and seriously limits the capacity to think strategically.
  • Enable freedom to fail. Thinking strategically involves creativity, innovation, and experimentation. Excessive concern about “looking good” and getting the right answer is very constraining. Failure is a valuable source of learning and knowledge. Attempting to avoid failure or hiding it when it happens is detrimental to thinking strategically.
  • Instill courage to step out and try something new. Like dancing and singing, thinking strategically can be exhilarating once the person gets over the initial concerns and timidity. In dancing, sometimes the best thing to do is get out on the floor and let go of being self-conscious.

Most of us were born without strategic bones in our bodies. We learn through great effort and over time through trial and effort. Strategic thinking is a must for organizations today who are dealing with ever increasing complexity and challenges. Organizations must also attend to developing capability for thinking strategically, and not confuse excellence in management with leadership and strategic thinking.

 

How is the level of strategic thinking in your organization? What are you doing to increase it? Where have you inadvertently delegated it to someone else with hope they would do it for you? What actions can you take right away to change that. Answers to these questions and more can be found in our whitepaper: ‘Successful Strategic Execution Begins With Leaders’.

In it, you will learn:

  • The two hallmarks of an effective leader
  • The most crucial value for leaders to possess
  • The greatest contribution a leader provides
  • The most valuable ‘tool’ for a leader to wield
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Leadership Commitment to Charters Key to Transformational Change

There is an ever-increasing demand today for transformational leaders. The rapid evolution of disruptive business models and technologies combined with intense global competition is producing this demand. The need for transformational change leaders who can use breakthrough designs to create sustainable growth strategies and execute transformational change is much larger than the supply. This has created a “gap” inside many organizations which requires leadership commitment to fill. Boards of Directors and executives are looking for ways to develop transformational change leaders within their companies like never before.

We at KingChapman have demonstrated methods for rapidly developing transformational leaders at many levels of an organization. We find that the best approach to developing these leaders combines creating and leading a Breakthrough Project in their organization with active participation in courses on Transformational Leadership. The act of creating the Charter for the Breakthrough Project is often the pivotal moment, both in forming the project and in participation in the leadership course.

Change Leaders vs. Change Managers

Most companies have change managers, who have been trained in using change management techniques. John Kotter says that the basic design of change management to control change initiatives. Change leadership is designed to create fundamental changes, which produce extraordinary results and transforms organizational culture. Change management methods are appropriate for incremental changes in one function or group in which the primary concern is maintaining control and stability. Change management methods are not appropriate for the bolder, bigger changes which many organizations today must implement, whether they are ready or not. The training and tools in change management were simply not designed for use in transformational change. The lack of appreciation for the differences in change leadership and change management is a key factor in the high failure rate of strategic execution and organizational transformations projects.

Change Leaders have quite different skill sets, which are designed to accelerate organizational accountability while implementing projects based on breakthrough designs. These actions produce extraordinary business results, intense employee engagement and transforms the organizational culture. Developing change leaders is a huge challenge facing companies today. The exponential expansion and growth of organizations has contributed to this. This growth has seemingly taken place so quickly that it has surpassed the organization’s ability to look within its ranks and develop potential leaders from within as the organization grows.

Charters & Developing Transformational Change Leadership

We believe the best approach for accelerated leadership development is the blend of active leadership of a breakthrough project with course work on leadership in organizational transformation. This blend makes the experience powerful, as the person learns what is required to create breakthroughs inside her or his company. An important building block in learning to lead transformation is the creation of a Charter for breakthrough projects, which is used as part of the coursework and leadership development. The Charter creates the breakthrough project(s). The Charter is written from the perspective of a future in which extraordinary results have been achieved. Success in accomplishing these results is the foundation of the Charter. The Charter articulates what shall be, and is comprised of a statement of purpose, outcomes, scope, constraints, key people, key processes and milestones.

Let’s look at how Charters play an important role in what we consider to be the six components of transformational leadership:

  1. Personal commitment to be a transformational change leader – Being a leader in transformational change is challenging, hard work. The process of creating the Charter for the transformation bring additional clarity to the leader regarding her/his personal commitment. This is important since personal commitment is the bedrock for organizational transformation. When the change leader’s commitments are clearly expressed, it provides a platform for dealing with the predictable complaints, criticism, and negative reactions from colleagues and others in the organization. The leader’s personal commitments must be bigger than the resistance if transformation is to be achieved
  2. Creating a Compelling Future – Transformational Leaders invent a compelling future which will replace the existing default future, since the default future is based in the past. Success in transformational change requires a new, future which is compelling and will inspire the creative energy of many in the organization. A well written Charter usually takes multiple iterations. Each interaction brings clarity on a future which is invented, rather than extension of the past. Often the initial attempts at crafting a compelling future fall into dealing with issues and problems from the past, rather than the future.
  3. Setting aspirational goals and strategies based on the compelling future – Once a future is established, then the strategic thinking required to envision breakthrough projects is possible. Leaders establish aspirational goals which can be seen to emanate from the Invented Future. These goals, if attained, will indicate success in achieving the Invented Future. Even better, these aspirational goals inspire people to seek breakthroughs and transformation. From this point, developing the Charter is readily done.
  4. Execution of strategies – They create a strong sense of urgency and engage a core of leaders in execution of initiatives which engages large numbers of employees in breakthrough and organizational transformation.
  5. Engaging hearts and minds during execution – Transforming organizations depends on winning the hearts and minds of employees and other stakeholders. Winning the hearts is often based on articulating values which are the basis for transformation. In addition, transformational change leaders act in ways which infuses the organizations values into heart of the culture. The values guide decisions and actions. The culture continues to evolve in ways which supports agility, creativity, continuous improvement and extraordinary products and services for customers
  6. Inspiration followed by more inspiration – There will be failures, let downs and mistakes along the way, which are essential for success in transformation. Maintaining focus and sustaining momentum toward completing the transformational changes required ongoing inspiration of people throughout the organization.

Charters are an important tool for change leaders engaged in strategic execution and organizational transformation. Developing Charters assists leaders in clarifying strategic thinking and establishing breakthrough projects as the core of strategic execution. When this practical experience is combined with coursework on organizational transformation, rapid development of change leaders occurs.

 

Is your organization seeking ways to rapidly develop change leaders? Using Charters to create breakthrough projects is an excellent tool in an overall leadership development effort. 

Leadership experiments can lead to breakthroughs in your organization. To learn how to plan breakthrough projects, download our white paper “7 Elements for Chartering a Breakthrough Project”.



In it you will learn:

  • what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
  • why creating a ‘charter’ is a critical step in the process
  • the critical roles that key people must play in the project to enhance success
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Lack of Leadership Commitment to Culture Stunts Growth

If you are a North American, you may be unfamiliar with the term parapet. The expression ‘put your head over the parapet’ is used to describe being brave enough to state an opinion that might upset someone. I learned a different version of this expression while conducting interviews about changing the organizational culture in a UK-based multinational company. The phase was: ‘Do not raise your head above the parapet’.

This reference to a parapet – a low protective wall at the edge of a balcony, roof, or bridge – is relevant because it alludes to how a company’s culture can either provide support and encouragement for growth, or hold it back. For this company, the perception of the employees was that the leadership commitment to culture was holding them back.

Case Study: UK Multinational Company Culture

I was brought in by the CEO who was critical of his company’s organizational culture and said that he wanted to change it. After meeting with the CEO, I conducted a number of interviews with employees in different positions at various locations. One of the questions I asked was, “Give me a phrase or word which best describes the culture here.” The most frequent answer was, “Don’t raise your head above the parapet”. The first couple of times I heard this phrase I would ask for more explanation. Invariably, the replies involved the punitive nature of the executives’ actions, along with the comment “Don’t stick your head up or you will get shot”.

File source: https://commons.wikimedia.org/wiki/File:York_city_walls_from_Micklegate_Bar_(6).JPGtraditional parapet in a European castle

Actual vs. Stated Values

Organizational culture is the manifestation of an organization’s actual values. These are the values which are displayed and reinforced daily. Employees pay much more attention to the actual values, not the nice words printed on posters. Employees will echo to disregard what we say our values are, and just consider what happens.

Organizational culture matters because it tells employees how to be successful and what not to do. In the example described above, the message from the culture was “do your job and don’t challenge or state an opinion which might upset someone”. A common expression employees use for this is “We are told to check our brains at the door”. Not very inspiring, right?

Further, this type of organizational culture is reflective of a command and control style of management in which employees are expected to do only as they are told. The implicit assumption is that the managers and supervisors know best how the work is to be performed.

While this may appear logical, it’s often not accurate. Usually, those who are doing the jobs best understand how to improve the work. In this case of the UK company, the supervisors and managers were dealing with an unacceptably high level of errors in processing customer materials. These errors were damaging the brand, giving ammunition to competitors and increasing operating costs due to required rework. The management’s assumption was that the answer was threats and punitive consequences. This approach had been tried and, over time, the problem was becoming worse rather than better. Yet, even with their own data saying this approach was clearly not working, the practice continued. The approach to improve performance was being thwarted by management techniques and the organizational culture.

Ironically, in the office where I was conducting some of the interviews there was a large poster on the wall which stated the organization’s values. The stated values were so different from what was being described by the employees. Finally, I asked about the poster. A high level manager said, “Oh that? It is from a program started by XXXX. He got fired and the whole thing stopped. We have just not bothered to take the posters down.”

Culture Supports or Stunts

Organizational culture will either support the successful execution of growth strategies or it will stunt them. It’s up to leadership commitment. By definition most growth strategies imply doing some things differently, since there is little reason to expect growth to occur absent change. Further, growth which creates substantial value and is sustainable over time will undoubtedly involve substantial change.

So what is going to be? When your people speak up, will you listen and encourage them and foster growth, or shoot them down? It is your choice, but just remember that the culture that your leadership commitment reinforces, might just be the culture that is holding you back.

 

If you want to learn more about what characteristics and roles leadership plays in the success of any organization, download our whitepaper: ‘Successful Strategic Execution Begins With Leaders’.

In it, you will learn:

  • The two hallmarks of an effective leader
  • The most crucial value for leaders to possess
  • The greatest contribution a leader provides
  • The most valuable ‘tool’ for a leader to wield
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