Leading Workplace Change™

Tomorrow, as you read all the brouhaha marking Barack Obama’s symbolic 100th day in office as President of the United States, you might want to keep the following ideas in the back of your mind.  These ideas are about what motivate people to change in today’s world and they come from behavioral scientists.  A recent Time Magazine article - ”How Obama is Using the Science of Change”  describes how these change ideas work.

The article outlines how the Administration is using them to set policy, structure speeches and create legislation to guide our country and the world through a difficult economic and social re-structuring.  But bottom line is that the change ideas focus on how to restore people’s confidence and sense of what are the new appropriate behaviors for success.

These ideas about what motivates people to change are both familiar and at the same time illuminating as you consider the actions of President Obama, his Administration and of his Presidential Campaign.  I simplified the article’s ideas into a set of six (6) best practices for behavioral change.

1. Easy Access to Good Information - helps people make better choices

2. Motivate by Making It Easy – no action to say “yes” works the best

3. Focus on Values for Long-term Success – helps people accept discomfort, overcome barriers and change

4. Just Say Everybody is Doing It – appeal to the need to “fit-in” to build new social norms

5. Shame and Competition Work – part of the “everybody’s doing it” message and the challenge of can someone do it better

6. Make Change Lucrative and if Necessary Mandatory – find the “what’s in it for me” angle or make it too expensive not to

So if you are responsible for leading change in your organization, your community, your family or for yourself, you might want to think about how to apply these ideas in your world.

PS – If you want to go to an original behavioral science source, the following website and blog from the authors of the book Nudge might be helpful.

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There is much self-reflection occurring in the business community today as we try to understand the underlying reasons for today’s economic crisis.  A recent article in the New York Times traces the role business schools most likely played in creating the “short-term and personal gain” focus of many of our current set of business leaders.  Rakesh Khurana, a professor at Harvard Business School is quoted in the article as saying -

…in the 1970s, the idea took hold that a company’s stock price was the primary barometer of success, which changed business schools’ concept of proper management techniques.  Instead of being viewed as long-term economic stewards, managers came to be seen as mainly agents of the owners – the shareholders…The new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.

My perspective is that it is not just the leaders and their training, but also the corporate cultures shaped by these leaders that pushed us into the economic crisis of today.  I was first alerted to the gathering strength of a “short-term and personal gain” focus in workplaces when conducting a culture assessment of an energy trading company in the late 1990′s.  I was surprised and concerned to find the following attitude common among employees at the company.

An ‘undiscussable’ here is that you don’t want to be at odds with the executive team.  This place is a gravy train and no one wants to do anything to upset this train for themselves.  This is a once in a career opportunity.

Thus from a development of culture perspective – business schools influenced their students’ beliefs about the primacy of short-term financial results.  These students became the leaders of companies and started applying these new beliefs in the workplace.  The boards of directors of these companies liked the results and started rewarding leaders for  their short-term financial focus; and gradually, the traditional belief of managers as long-term economic stewards of a business became weakened.  

Over time, the new financial focus of leaders helped to create a new set of shared “rules of behavior” or culture that trickled down to all employees.  And, employees started to act day-to-day with a focus on their own short-term personal gain and like their leaders not on the overall health of their company.

I am happy to learn that some business school leaders recognize the need for change and are making efforts to re-think the fundamentals that drive their curriculum and training.  The NYT article mentions a number of efforts underway at business schools to focus more on long-term thinking; on the social value of management; and, how to make management a profession with a code of conduct.

My sense is that not all business schools will become leaders in this change effort.  But, those institutions that take on this challenge will most likely dig deep and find their own “win-win” cultural belief that what is important for the common good can be good for their business of education.

Here is an example of another heroes quest that will need to be taken on by institutions across the world in order for us to successfully re-fashion the structure of our global economy.

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I am not alone in my belief that companies are capable of taking on heroes’ quests and be leaders in re-fashioning our global age.  The magazine Fast Company in their March 2009 issue comes up with a list of 50 innovative companies  …”that will re-define our future and point the way for a better tomorrow.”   # 48 on their list is Toyota Motor Company which I investigated recently as I wondered what in their corporate culture put them on the path of mass producing fuel efficient cars so far ahead of their peers in the automotive industry.

And what did I find? – another company culture with a long-standing “win-win belief” that what is important for the common good can be good for business.  In searching their company history on-line, I found the following statement describing the personal beliefs of the 19th century father of the founder of Toyota.

…Sakichi (Toyoda)…believed that he owed his success to the world at large and that it was important that Toyota be of service to humankind by working in good faith, not purely for monetary gain…

It is usually possible to track these kind of fundamental beliefs over time within companies in the writings of its leaders and how the company describes itself and what it values.  And yes, here is the same belief articulated today in a Message from Top Management.

…Under Toyota’s Guiding Principles, we practice openness and fairness in our corporate activities, strive for cleaner and safer car making, and work to make the earth a better place to live…

Now I have read many books on the histories of companies and read many an annual report, but Toyota does seem to be “walking its talk,” and using a traditional strategic belief to guide its business planning decisions.  Essentially, it was easier for Toyota to mass produce fuel efficient cars before its peers, because it was naturally supported by its corporate culture – to think long-term and find ways to build its business while serving the common good.

This strategic belief has served Toyota well as it is now the world’s top-producing automaker, albeit suffering losses today like the rest of us and most likely not perfect in every way.  It is also an example of a hero company with a “win-win cultural belief” that can lead in the re-fashioning of the fundamentals of our global economy.

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…once goals set, execution cultures are capable of making change happen

My recent focus has been on identifying companies who I see as culturally capable of moving through hard economic times and to become leaders in re-fashioning our global society.  My last post identified Coca Cola with its sustainable packaging efforts and this post focuses on Wal-Mart and its commitment to environmental sustainability.

Recent articles and blogs from a variety of sources paint a picture of Wal-Mart as embarking on the quintessential heroes’ quest.  The quest to practice environmental sustainability as an opportunity to improve both the future of its business and the future of the world.  Both Coca Cola and Wal-Mart are  clearly basing their strategies on a similar win-win cultural belief which happens to be very American and has a long history in some American companies.  Retiring Wal-Mart CEO, H. Lee Scott Jr. articulates this underlying cultural belief well in his last public speech as CEO.

As businesses, we have a responsibility to society…Let me be clear about this point.  There is no conflict between delivering value to shareholders and helping solve bigger societal problems.  In fact…they can build on each other when developed, aligned and executed right.

After reading about Wal-Mart’s efforts, I sense that the company is truly walking its talk and through its business model forcing its suppliers to transform their business practices and products as well.  I then became curious to see if there is anything in the company’s traditional culture that will support its business transformation quest?  As an aficionado of workplace culture, I of course turned to Wal-Mart’s history, leader speeches and to what the company says are its core values.

At Wal-Mart, they are called Mr. Sam’s Values after the company’s founder and they appear to focus strongly on finding ways to bring the highest quality product at the lowest price to the customer.  They talk about never being satisfied and the importance of asking: “Is this the best I can do?”  There seems to be a driven quality about the culture with a strong dose of centralized control.

Wal-Mart’s workplace culture most likely does not make it a very comfortable place to work and people management most likely takes a back seat.  But once environmental sustainability goals are set, I sense this company will execute to plan and bring all of us along on their heroes’ quest.

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…sustainable business practices are not new-but they work

My last few posts have centered on heroes’ quests as a framework to guide our thinking and actions in 2009.  We usually think of people as heroes/heroines who use their power to serve others.  But today is it also important for our business corporations to take on that role if we are truly going to re-fashion our global age?  And are their certain companies who will be able to embark on heroes’ quests more easily due to their corporate cultures?

The answers are yes, and it is based on our finding in some American-based companies of a practical, win-win strategic belief that doing things for the common good by practicing corporate philanthropy is good for business.  We first encountered a deeper understanding of this belief when doing a culture assessment of an insurance company founded in the mid-1800′s.  One of the insurance company’s first corporate donations was for the building of a community fire station and the purchase of a steam fire engine.  The community benefited from a state-of-the-art fire protection service and the insurance company benefited from the likelihood of reduced insurance claims due to fire damage.

A more recent example can be seen in the Coca Cola Company investment of $40-50 million in a PET plastic recycling plant as part of their long-term goal to recycle or reuse 100 percent of its bottles and cans in the United States.  A Coke executive when speaking of this project describes the same kind of win-win belief that drove the insurance company almost 150 years ago.

The long-term sustainability of our business depends on our ability to ensure the sustainability of our packaging.  This new recycling facility represents a significant mile stone as we work to advance recycling in the U.S. and ensure a strong end-market for our PET packaging.

I do not think that Coca Cola sees itself as on a heroes’ quest.  But I do believe that the corporations with win/win beliefs regarding what is important for the common good can also be good for business will be able to make change happen in our society – they can be among the leaders of Bringing Change Forward.

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My last post of 2008 ended with the hope that heroes and heroines will emerge in our organizations, in our society and within ourselves in the next year as we work to re-fashion our global age.  As we are now in 2009, my thinking becomes more practical.  What resources of character should we be mining in ourselves as we embark on our heroes’ quests?

It suddenly came to me that there might be an answer to that question in our culture data base.  In helping organizations identify their workplace culture, we regularly ask folks to identify the past and present heroes and heroines of their organizations.  These people’s names are not important, but what they are known for is.  You can trace the underlying drivers of a workplace culture by identifying patterns in how people within organizations respond to crises.  I looked through the data base to see if there were themes regarding the personal character of heroes/heroines across organizations and industries over the past 20 years. 

And yes, there were clearly characteristics common across organizations.  Heroes/ heroines were repeatedly described as -

• Tellers of Truth …consistently and in a timely manner
• Leaders of People …supporting others to greatness
• Holders of Historical Knowledge …sharing their technical expertise and experience
• Visionaries with Business Savvy …using their positive attitude to set goals and achieve them
• Bringers of Change Forward …providing constant direction as ‘turnaround’ experts

Rather straightforward and practical things that all of us can practice in living our heroes’ quests today and in the months ahead.

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My inclination as this year of 2008 closes is to look for wisdom and learning from history and older civilizations to guide me in my thinking for 2009.  The thought swirling in my brain over the past few weeks is that civilizations usually go through times of self-destruction and ruin which unknowingly create fertile ground for re-birth.  And most likely, we are going through this kind of time today in our post-post industrial, global age.

These kind of thoughts led me to turn to the writings of Joseph Campbell for guidance.  Campbell studied and wrote about myths of the world, looking and finding commonality of themes across continents and ages.  He used his knowledge to explain how myths are our ties to the past and help us understand ourselves and the world we live in today.

In my perusal of his writings and my notes, one theme stood out as a possible source of guidance – the stories about heroes’ journeys.

…the journey is not about denying reason…to the contrary, by overcoming the dark passions, the hero symbolizes our ability to control the irrational savage within us…we must find within ourselves the resources of character to meet our destiny… the ultimate aim of a hero’s quest must be neither release nor ecstasy for oneself, but the wisdom and the power to serve others…there is a point of wisdom beyond the conflicts of illusions and truth by which lives can be put back together again.

The Power of Myth by Joseph Campbell with Bill Moyers, 1988

I believe heroes and heroines will emerge in our organizations, in our society and within ourselves in the next year as we work to re-fashion our world.

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As you might expect, I am interested in news articles that work to explain through insider and expert interviews the reasons for the success and failure of an organization.  At some point in the articles, there are usually cryptic lines about the need for a “change in culture” or “kudos to a cultural strength.”  These lines are many times used as short-hand to describe underlying reasons for the organization’s success, failure or what needs to be done for future revival. 

One recent article in the New York Times chronicling Citigroup’s drastic decline ended with an intriguing statement about what will be required of Citigroup if it wants to succeed as a bank subject to regulatory control.

Safe and soundness has to be no less important than growth and profits….

This combination of characteristics surprised me.  I riffled through my culture data base to find an organization that had safeness/soundness and growth/profits in their combination of cultural drivers for success.  My first instinct was that the drivers were opposites and impossible to balance.  

I kept on looking and finally out of hundreds of companies in our data base, found a couple of companies with this combination of cultural values – they were large and venerable utility companies, leaders in a regulated industry.  Their focus on growth was to achieve greater operational efficiencies for customers and shareholders – safety was tied to technical innovation to ensure the health of employees and the public.  And soundness related to financial and budgetary practices to ensure profitability and a fair return to shareholders.

Of course, it makes sense to find culture best practice examples for the new Citigroup in the utility industry that has gone through its own journey through de-regulation and back.  We are beginning as a society to think again of our banks as part of a national and now a global financial system.  It is good to know that balancing “safe & soundness” with “growth & profits” is possible and a proven recipe for success in industries subject to regulatory control.

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In my last post I wrote about a public figure openly acknowledging a flaw in their thinking and how that capability is a powerful tool for leaders to model and reward in a time of change.  It allows for people to move forward quickly past paralysis and blaming to new ways of acting.  In thinking more, I realized there is an “underbelly” side to how some organizations respond to people taking responsibility for their mistakes that needs to be shared as well.

One “underbelly” response usually occurs in organizations where the focus on achieving results or winning is taken to an extreme.  In these workplaces, missteps are not easily accepted or forgotten and people look for opportunities to take advantage of someone else’s slip-up for their own benefit.  The focus is usually on winning for oneself and not for the good of the company.  This quote exemplifies the impact on employee productivity and morale.

Those that slip-up want to pass responsibility on to others and not be part of the solution.  No one wants to take the blame.  People are afraid that someone else will take advantage of the mistake for their own benefit.  The system for rewards and recognition encourages individual “point scoring” over others rather than teamwork.

There is clearly a feel of internal competition in this workplace.  It would take courage or connections with the “right people” for someone to be willing to try something new. 

Consequently, the learning for leaders is first to be aware and assess the workplace culture you breathe everyday.  Are there any “underbelly” practices that may act as barriers to openly acknowledging and learning from mistakes?  How would you personally intercede to re-direct these undermining practices?  Follow the advice of Peter Drucker as outlined in one of my previous posts and look for pockets in the workplace where folks are regularly more open.  Ask them how they make it safe for people to try new ways of working and hold themselves accountable for both their successes and their missteps?

Finally, a primary role of leaders who want to mindfully re-direct their workplace culture, is to have a personal story crafted as to why they see a shift in behaviors is needed.  Be prepared to be called dull and boring as your job will be to repeat differing versions of the story many times over the weeks, months ahead as people muscle their way through new ways of working.

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…actions are more important than words in times of turmoil

Admitting to a mistake is never easy.  And as a leader, it is both an important capability as well as an action that needs to be done thoughtfully.  In late October, when I read in the papers about former Federal Reserve Chairman, Allan Greenspan admitting to a fundamental flaw in his thinking about the self-correcting power of free markets, I sat up and took notice. This was not just an expression of regret about a day-to-day action, it was an acknowledgement of a flaw in one of his own fundamental beliefs that directed his decisions in guiding the U.S. economy.

Notice in the following statement made by Mr. Greenspan before the House Committee on Oversight and Government Reform that he includes a personal reference and an emotional response to his mistake…”Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…”  He did not go into elaborate detail at the Congressional hearing, but he took responsibility for his mistake and later in the hearing, briefly noted an idea for corrective action.

In the world of organizational culture, how current and past leaders respond to mistakes has profound implications.  In cultures where adaptability and innovation are engrained, leaders regularly model both consequences and learning from mistakes by doing it themselves and rewarding others who do the same.  It is a natural part of how they lead to encourage creativity and make it safe for people to commit to stretch goals and hold themselves accountable for achieving them.

The learning for leaders is that their capability to openly acknowledge a mistake is a powerful tool.  It allows for people within an organization to move forward more quickly past blaming to action.  No one ever promised that being a leader would be easy, but no matter how you feel about Allan Greenspan’s policies, following his lead in a time of turmoil is something to think about.

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