Leading Workplace Change™

…measure success based on accomplishments

The influence of celebrity culture in our day-to-day lives seems to be increasing in proportion to the number of new videos posted on YouTube.  Will its power soon be slipping into the workplace or is it already there? –  with its persistent focus on publicized name recognition rather than known accomplishments? 

We have celebrity CEO’s - most prominently in companies built on brand recognition, such as Steve Jobs at Apple Computer, Richard Branson at Virgin Atlantic and Oprah Winfrey at Harpo Productions.  And yes, within brand-based companies, it is common for folks to promote themselves with their own personal brand as part of their path to workplace success.

The consequence in the business world, as well as in popular culture is that there are always whispered questions as to whether these individuals achieved their success by true accomplishments or by just being known by the right people at the right time and place.  Even folks with clear skills and abilities to produce results, who use the ‘celebrity’ route to gain their position, have to be ready to counteract steady rumors of lack of competence.

There is also the challenge within highly celebrity-based workplaces that when mistakes are made, there is usually someone ready to take advantage of the mistake for their own benefit!  This same phenomena occurs in popular culture.  An example can be seen in Tiger Woods’ a recent falling from media grace – the trappings of celebrity can quickly exalt and just as quickly destroy. 

The unintended impact on brand-based or celebrity cultures – is that workplace energies can become very internally focused on the ‘name recognition’ game and not on the competition outside.  So as usual the answer is balance – people in the workplace will always need to use relationships to get some jobs done; they need confidence in their own abilities – but let’s measure success by accomplishments.

Celebrity culture is not a new challenge – take a look at the writings of the historian, Daniel Boorstin from the early 1960′s.  A good quote of his that rings just as true today is:

The hero was distinguished by his achievement; the celebrity by his image or trademark.  The hero created himself; the celebrity is created by the media.  The hero was a big man; the celebrity is a big name.

Tags: Being American // Add Comment »

…rugged individualism needs to be aligned with institutional mission

Recently, I was asked to bring my knowledge about shaping workplace culture to a symposium for educators on “Stopping Youth Bullying.”    I started my workshop with the question -  “What are the underlying reasons why teachers, families and children have a hard time addressing bullying?”  The answers were varied, but consistent.

• some people think bullying helps kids ‘toughen up’ for the real world, so a little bit is OK
• if a teacher responds, the bullying goes underground and becomes even more dangerous for kids
• administrators deny it is happening in ‘their school’

These responses reminded me of feedback from folks within organizations as to why harassment of employees, a form of bullying, is tolerated within the workplace.

• hazing of newcomers is just expected in the workplace
• just ‘keep your mouth shut and look the other way’ around aggressive managers or you could become their target
• people stuff is just not as important or valued as getting the job done

The questions then became – do “bullying” and “harassment” go with or against the grain of the national beliefs of our U. S. culture?  Is it primarily about the need for some to seek attention, power and control through humiliation, as postulated by the Workplace Bullying Institute?  Is there something more within our national DNA that allows children and adults to gather around and cheer the bully on or just ignore it?  This appears to be the case, even as we are becoming more and more aware of the negative consequences in the workplace and in the schools.

It became clear to many of us within our Symposium sessions that bullying may go with the grain of our traditional American frontier roots and our belief in the importance of “rugged individualism.”  We admire people who stand up for themselves and show initiative, stamina.  This “rugged individualism” can lead to creativity and innovation – a core component of U.S. success, and in the workplace it translates into valuing people who are “self-starters.”  No one wants to get rid of the “self-starter” instinct in our culture, but left in its traditional pure form – it appears to influence a passive acceptance of the practice of bullying which can lead to violence, depression and decreased productivity among youths and adults.

We finished up our time during the Symposium sessions talking about what educators should focus on to shape school cultures to stop bullying.  One participant from a school, recognized nationally for its successful school transformation effort said simply:

In our school, parents pushed from the bottom-up and demanded that bullying be stopped and our principal pushed from the top-down to put in practices to stop bullying.  Teachers, parents, guardians and students talked together and agreed that their school needed to be a safe place to learn.

Other participants replied - thinking realistically it will require more than that - creating “safety” will require us to talk about shifting the grain of our U.S. culture for long-term transformation to occur both in our schools and in our workplaces.

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…bigness leads to arrogance and to the fall of empires

One of the big business topics in October was how to address banks considered “too big to fail.”  According to Allan Greenspan, former Chairman of the U.S. Federal Reserve – “If they’re too big to fail, they’re too big.”  Paul Volcker, another Fed Chair and Bank of England Governor, Mervyn King think these “too big to fail” banks should be split up, separating commercial and investment banking.  While the current Fed Chair Ben Bernanke and U.S. Treasurer, Timothy Geithner support a “wait and see” approach and then recommend the use of a form of bankruptcy re-structuring to address the banks that fail.

I do not have an easy answer to this complex regulatory decision, but I do have some knowledge from an organizational culture perspective about how the bigger is better  belief plays out in organizations.  This belief may start with founders and/or leaders focusing on measuring their company’s success through growth in market share, revenues or customers.  If this approach proves successful, they may find that bigness brings benefits, such as domination of their industry which drives out competitors.  It may lead the company to play an industry leadership role and be able to set their own rules and drive government oversight and regulations.  Maintaining a reputation and  images of strength, bigness and power are important.

The classic downside of the cultural belief in bigness is a corresponding sense of organizational arrogance and inflexibility that leads to the perspective that “we know what is best for our customers, regulators and our industry.”  At the same time,  emphases on good internal management structure and practices are hard to maintain as leaders are focusing on their external business environment to maintain or grow bigness.  The death knell for most organizations with a bigness is better cultural belief is similar to many kinds of empires, based on bigness – somebody smarter, faster or stronger comes along and pulls them down.

Consequently using this cultural perspective as a guide, let’s think about the question of what to do with banks that are considered “too big to fail.”  From the empire perspective, I am not sure I want the banks that are supposedly our financial centers providing credit and a flow of money for all kinds of private, public and not-for-profit entities around the world to be on paths to eventual failure.

It looks to me that Allan Greenspan maybe right – “If they’re too big to fail, they’re too big.”

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…boundaries of competition need to be clear

One of the big topics in September is how much to regulate our financial institutions to protect us against another freefall of our economic system.  We are finding out that there is not as much agreement on the amount of regulation needed as we thought there was six months ago.  This lack of agreement is leading many to dig deeper to understand our national U.S. psyche.

We are trying to understand what makes us tick – what are our national beliefs that drive popular behaviors and the practices of our business and government entities?   A recent article of this type which caught my eye explored the role of how our American “frontier roots and rugged individualism” influences the degree of government regulation that Americans are comfortable with.  The author uses a quote from Robert Shiller, a Yale economist, who goes back to George Washington, our first President to help us understand ourselves -

Washington said regulation should be done with a light hand.  The word capitalism hadn’t been invented yet, but freedom had.  Washington said businesses should be free.  There’s this hatred of kings that we really have in our blood.

Now, I am familiar with the power of the U.S. belief in “rugged individualism” – we see it play out over and over in the cultures of American-based organizations.  And, it clearly has become stronger over the past 10 years.  There are varying degrees of strength of this cultural driver within organizations, but it can be simplistically described in its most extreme state as follows:

We value employees who are self-starters and who can figure things out for themselves.  It is important to not admit to mistakes, because they can be used against you by others.  And people need to aggressively seek out high-profile opportunities to advance their careers  The negative consequences of this cultural driver when taken to an extreme are:

• Accountability for actions is difficult to enforce
• Management and development of people is not valued – we wait for the ‘cream to rise to the top’
• ‘Winning for yourself’ and not for the good of the organization occurs which leads to internal competition between employees, managers and units

This “self-starter” value is very difficult to harness as a leader of an organization, as a regulator or as an elected official.  It  can work very effectively when the mission is simple and competition is low.  But when the mission and necessary strategies become more complex and competition is higher, it can be a recipe for failure.  The “self-starter” value can hinder people from working together to combine their knowledge and skills to address external competition.  It does not support people to make decisions for the good of the business, their industry or the overall economy.

No one wants to squash the “self-starter” value – personal initiative is good, but the boundaries of competition need to be clear.  The most common techniques used by organizational leaders to balance this cultural driver are to – regularly clarify mission and goals in response to external competition; put in place individual and group rewards or consequences based on goal achievement.  But most importantly, there needs to be a leader who is willing and able to ”ride herd” in reinforcing the goals and maintaining the boundaries of competition.

The world is not the same as in George Washington’s time…. 

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The months of July and August brought us a great deal of news about how much people are getting paid for what they do.  As a society, we are in agreement about little on this topic - and most importantly about whether executive compensation should be connected to the overall health of our economy.  Some of the highlights include:

• talk of big bonuses at  Wall Street banks
• debate about “guaranteed bonuses” for folks no matter how they perform
• concern about excessive pay in general for business executives

But the most concerning news from an organizational culture perspective, is that these headlines were reinforced by a recent executive compensation study called – “Balancing Risk, Performance and Pay.”  The Study looked at compensation practices for 2008 and 2009 at two-hundred (200) of the largest companies that comprise the S&P 500 Stock Index.  And in short, the most telling finding is that there is a shift away from long-term incentives that focus on the overall health of a business and more focus on short-term incentives to increase cash flow and stock price.

These findings about the big companies took my breath away, so I decided to call a colleague who works in compensation for small to medium-sized companies and heard something different.  His take is that companies are focusing more on “how” to pay people rather than on “what” to pay them.  He talked about how companies are looking for ways to manage their compensation as a form of investment – both in their people and in their company for the long-term.

My experience is that organizations have been struggling with how to structure compensation for many years.  The underlying cultural beliefs of organizations guide their compensation decisions, and they are varied and not easy to shift.  During the last ten (10) years, there clearly has been more of a desire to link pay with performance.  Though, the reality is that the U.S. is not as merit-based in our compensation practices as our national myths about democratic principles would like us to think. 

Here are some recent quotes from leaders about their organizations’ compensation practices and beliefs that highlight the range of realities.

• Salaries are low here, but benefits are good – just need to put in your time and pay increases incrementally
• Not much difference between compensation for those who do stellar work & those that do OK work – pay increases based on a bell-curve
• Our management failure is that we don’t truly recognize performance – it is all about “who you know”
• Results are often valued more than the means – it doesn’t really matter how you get there – you just have to get there

Though no matter the variety of underlying beliefs, it is apparent that our push as a society to accelerate growth, by linking individual pay to performance caused some organizations to become short-term focused.  The allure of personal gain overwhelmed the complex task of including into individual compensation packages – objectives for the long-term health of a company and for our economy in general.

Tags: Values Inform Culture // Add Comment »

Last fall, I wrote about corporate culture characteristics that allow certain companies to historically move through hard economic times and endure.  They include having:

• an “optimistic spirit” to move through down times
• a “commitment to a long-term vision”
• an “ability to adapt” quickly to changing marketplace conditions

Consequently, ten (10) months later, are there any companies who are not only enduring, but thriving?  And do they exemplify any of the culture characteristics noted above?  The company that comes to mind is Goldman Sachs who in July announced its highest quarterly profits in its 140-year history.  In October 2008, I used Goldman Sachs as an example of a company with a cultural ability to adapt quickly.  This was due to its almost overnight decision in September 2008 to change its status to a bank holding company to survive the economic free-fall occurring on Wall Street.

But Goldman Sachs is not receiving universal accolades for its 2nd quarter performance, especially in relation to its new status as a regulated bank holding company.  It is simultaneously being praised for successful risk-taking in its trading operations and being bashed as a “great American bubble machine” due to its abilities to commercially exploit market conditions at the expense of the little person.  But, the issue that is rubbing folks the most is the perception that the company is taking excessive risk after being bailed out by the U. S. government and taxpayers.  And according to company tradition, employees will potentially be well compensated for these results through hefty year-end bonuses.

There is a quandary here – in the last 20 to 30 years, we watched Wall Street lead the way to what some may call a “perfect performance-driven” industry.  Wall Street firms figured out that they could put their own capital on the line to make big trading bets and investments in a wide array of businesses.  Individuals at these firms who worked hard and found commercially exploitable opportunities were highly compensated.  This all worked out fine, because the little and big folks who were investing with these firms made money too – until the economy tanked and safeguards put in place to protect against excessive leverage failed.

In the midst of all this hubris, everyone seemed to forget that another purpose of Wall Street is as a financial center to provide credit and a flow of money for all kinds of private, public and not-profit entities around the world.  This is an important component of our capitalistic system that effects more than any one person’s year-end bonus.

Consequently, it seems like a good idea that the government regulator responsible for overseeing Goldman Sachs talk to the company’s leadership about how their world is more complicated now – performance and adaptability are not enough.  There are also expectations that the culture at Goldman, as a bank holding company needs practices that show it values safety and soundness as well as growth and profits.

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…in times of change, alignment between leader and employee values is critical for success

The past twenty (20) years have been a wild ride for doctors, patients, hospitals, insurance companies and legislators.  We have all experienced the pain and the little triumphs of trying to fix our healthcare system in an ad hoc – change as we go manner.  There appears to be forming among these constituents a sketchy common goal of providing health coverage for all with higher quality and at reduced costs.  With this growing consensus that organized change in healthcare is imminent, the focus seems to be moving toward what are the strategies and delivery models that will bring us success.  And lo and behold, the conversation is even turning to what role organizational culture will play in our change efforts.

The Annals of Internal Medicine recently published research connecting – primary healthcare working conditions with quality of patient care.  The results are not conclusive, but Medpage Today, an on-line resource site for physicians starts their coverage of the research with this synopsis.

Adverse working conditions for primary care doctors, including time pressures and an unfavorable organizational culture, may lead to stress, burnout and ultimately to lower quality patient care, a new study found.

The aspect of organizational culture that seemed to have the strongest connection to patient care had to do with the “alignment of values between physicians and leaders.”  The higher the alignment – the higher the quality of care.  It would be interesting to know exactly what values are important to have in common between leaders and physicians within healthcare organizations, but we can hazard a guess from our experience and recent news articles. They most likely include a range of fundamental options:

• emphasis on preventive medicine or medical treatment
• believing healthcare is a social mission or a for-profit business
• being patient-, doctor-, or insurance- centered
• focusing on quantity or quality of patient contacts
• use of technology as a tool

The wild ride of fixing our U.S. healthcare system is not over:  But as in any change management effort, clarifying common goals is an important first step.  The next step is for leaders to work on defining and aligning core values.  These core values will guide strategies and allow for more unified action among the myriad of stakeholders within healthcare organizations.

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…shared values are key to developing next generationof business leaders

Have you heard about the MBA Oath?  It was put together by a group of graduating Harvard Business School students in late May.  The Oath is a voluntary code of conduct created to bind together business school graduates with a set of shared values – values to guide their day-to-day actions and decisions as future managers and leaders.  It is part of a growing movement within the business school community to re-direct business management back to being  a profession with social, personal and organizational stewardship responsibilities.

The opening lines of the MBA Oath clarify its underlying purpose.

As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can create alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term.

The MBA Oath is not as naive as you might think.  Other professional schools such as medical, require students upon graduation to take an updated Hippocratic Oath which focuses on the social as well as the clinical responsibilities of practicing physicians.  In most states in the U.S., law school graduates need to pass a professional responsibility exam, MPRE as part of their state-based bar exam to become an attorney-at-law.  Thus it seems reasonable to think of establishing professional standards, based on a set of shared managerial values for MBA students.

 We all know by experience that an MBA Oath on its own cannot guarantee consistent organizational leadership for the greater good, any more than the ethical standards and rules currently in place for physicians and attorneys can for their professions.  But, the potential is there to start setting expectations among graduating students to think of themselves as joining the profession of business management with ensuing obligations and benefits.  The profession can then use the strength of peer pressure and disciplinary action to enforce organizational stewardship standards rather than wait for regulatory or shareholder retaliatory actions.

These professional standards also have the promise of effecting the workplace cultures of the organizations MBA graduates will someday lead and the business world that we live and work in every day.  The culture of organizations are most strongly influenced by the personal beliefs and training of their founders and long-term leaders.  The behaviors they model and reward are one of the primary culture creating mechanisms of corporate culture.

So what better place to start to re-direct business management back into a profession than in the classrooms and within the formal practices of business school graduation ceremonies – “let’s all stand to repeat the MBA Oath!”

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Summer 2009 is almost upon us and the prognosis about our world’s economic future from both soothsayers and economist is – stay patient, tighten your belt one more notch and keep on thinking long-term.  So where to go for inspiration and courage in these trying times?  My mind quickly turned back to the magazine Fast Company’s March 2009 list of the World’s Most Innovative Companies…”that will re-define our future and point the way for a better tomorrow.”  These are organizations that are already successfully capitalizing on innovative ideas even in our tough economic times.

Fast Magazine in their March article focuses on  50 organizations in eight market segments.  Since healthcare reform is a top U.S. priority these days, I started with the five organizations listed in the medical segment for inspirational ideas.  And there clearly was a common theme binding these organizations together.  It was the tried and true belief of focusing on “what is important for the common good can be good for business.”

These organizations are from all over the world with private and not-for-profit structures – founded less than 10 years and over 100 years ago.  Most of them have visionary founders, but one is a traditional commodity-based business that recently revitalized its vision with a focus on sustainability.  They define their market niches as finding answers for what were once thought of as un-solvable and life-threatening health problems in underserved markets.  The key is that they figured out a way to do it effectively and profitably.  Highlighted below are the five organizations and their market niches.

• DSM, Heerlen, Holland
  • improving nutrition in emerging economies
• Gilead Sciences, Foster City, CA, USA
  • focusing on life-threatening diseases, such as HIV
• Aravind Eye Care System, Madurai, India
  • eliminating needless blindness
• Genzyme, Cambridge, MA, USA
  • treating rate genetic disorders

And lastly, a company that fills the niche of partnering with other companies in shortening the cycle and cost of developing drugs and medical devices

• WuXi PharmaTech, Shanghai, China
  • providing R&D outsourcing services

Dr. Ge Li is the founder of WuXi PharmaTech and is a Chinese-American who moved to China to start his company.  He offered the following thoughts when he was honored in 2007 as one of China’s top ten entrepreneurs.  He gave me some needed inspiration and courage.

I hope more people can realize their dreams and create value for their customers, employees and society.

Tags: Good for Community - Good for Business // Add Comment »

What can organizational executives learn from President Obama about leading a change effort? If you listen between the lines when the President speaks or read the recent New York Times   article called “Redefining Capitalism After the Fall,”  you can learn much. He is talking no less than about how to help our country re-think the fundamental drivers of our current economic system – consumer-driven capitalism! Now if you think your change goals are big and overwhelming, just step back and consider what the President is trying to achieve.

…We must lay a new foundation for growth and prosperity — a foundation that will move us from an era of borrow and spend to one where we save and invest, where we consume less at home and send more exports abroad…

It appears that the President like many leaders in a time of crisis is charting two courses simultaneously. He is acting tactically to address short-term economic and social challenges while at the same thinking strategically about shifting economic values and structures to drive sustainable prosperity in the future. This two-pronged attack to solving a problem is classic leadership work. And, whether you agree with Mr. Obama’s ideas or not, we can use his efforts to provide examples of best practices for change management.

As a leader, he takes his role as “chief communicator” seriously and uses his position as a “bully pulpit” to guide people to think and act differently. He never misses a chance to:

• share his vision for the future and the potential benefits of change
• explain why we need to change by describing what is not working
• provide concrete behavioral examples of how to act differently to achieve the benefits

Thus a best practice for executives leading a change effort is to see themselves as the “chief communicator,” and to use their own “bully pulpit” to guide employees through change. Here is an example of a leader message within an organization that is successfully moving through change.

For us to thrive as a company, we need to grow – at the same time maintain the quality that our brand is known for. To do this we are raising the bar – less tolerant of mediocre performance – in the past being connected to the “right people” meant you never got fired – today we are setting expectations and measuring performance against goals. For some folks, this has been a cultural shock and for others a wake-up call…

Not every organizational leader has the speaking skills of Barack Obama, but crafting communication methods to match personal strengths is key – talking to people one-on-one may work better. Most importantly, the message needs to be constant and consistently include vision, benefits, what is not working and the required behaviors for the future.

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