This is part 4 of a 4 part blog series, written by our friends at Brookeside Group, which outlines a four-step approach to measuring and managing this corporate culture:
Step 1: Recognize What It Is
Step 2: Measure Organizational Climate
Step 3: Understand Determinates of Climate
Step 4: Focus on Leadership Practices
Research and experience tell us the next step in managing the corporate culture is to focus on leadership practices. The determinants of Organizational Climate provide executives with points of leverage in managing corporate culture. It is the most important determinant, meaning the most important lever is the personal leadership demonstrated by senior managers.
The best way to get managers to modify their leadership practices is to follow a five-step
leadership development process:
1) Identify the specific leadership practices that support the climate and
culture you want to create. Our research points to a number of practices that
have a positive impact on each of the six dimensions of climate. These are
shown in Figure 3. Many of our clients modify this list and develop their own
“model” of effective leadership.
2) Give managers feedback on how they are currently practicing the targeted
leadership practices. If possible, make this part of the climate survey-feedback
process. If not, conduct additional leadership practices surveys and insist that all
3) Provide managers with opportunities to learn new skills and try out the
desired practices. Train and retrain. Aggressively coach people who are trying
to change their leadership practices.
4) Constantly reinforce the desired leadership behavior. Make changes to the
reward systems, the career management and promotion policies, and the
performance appraisal processes. Reward people who lead the way you want and
punish those who don’t!
5) Model those practices at the top. Walk the talk. Everyone watches the most
senior levels of management, so culture change always starts at the top.
We have learned five lessons about how to manage corporate culture.
1) Tie culture change tightly to improving business performance. Growth
and profitability motivate change in business organizations more than the desire
to improve the organization or improve the climate or the culture. People won’t
see the need or feel the urgency to change the culture unless such change is
explained in terms of winning in the marketplace.
Managing corporate culture should be part of formulating and implementing the
business strategy. The most effective way to tie culture change to business
imperatives is through the strategic plan. The best plan is one that spells out not
only what must be accomplished, but how. The how should include directives
about the kind of internal work environment that must be created if the
organization is to compete successfully.
2) Use a climate survey feedback process. The survey-feedback process should start at the top. It should include plenty of diagnosis and analysis, but it should concentrate most
on action planning. The planning will be most actionable if executives receive
feedback on the leadership practices as well as their climates.
The power of the climate survey is that it gives people a common language and a
concrete benchmark against which to measure progress. Executives respond to
numbers, graphs, and charts. These make the things that are being measured (in
this case, the dimensions of Organizational Climate and key leadership behavior)
3) Use leadership training. The use of customized leadership training programs
is a powerful way to manage corporate culture. Not only does such training
focus directly on the most important determinant of climate and culture, but if
done right, it can accomplish multiple objectives:
– It allows the top management team to send a clear, unambiguous cultural and
– If the training includes leadership practices feedback, it gives managers personal
insights into how they are behaving vs. how they are expected to behave.
– Training programs are effective forums for people to vent their feelings and ideas
about the cultural change, helping them to let go of the old and embrace the new.
– Leadership training can build leadership skills, especially those skills that will be
critical in the new culture. Training programs are a relatively safe place to try on
new leadership behaviors.
– Finally, if done right, a corporate-wide leadership training initiative should build
commitment to the overall company, exposing people to a cross-section of other
managers, giving them a chance to think as one company, and hopefully, to
develop a more unified sense of corporate culture.
4) Fit the organizational arrangements to the new culture. Another important
lesson we’ve learned is to move quickly to make the formal and informal
organizational arrangements consistent with the culture being created. The
performance management systems should be updated first. The way goals are
set, performance is appraised, results are measured, incentives are paid and
employees are coached – these are part of performance management, and they
must be changed quickly to reinforce the desired corporate culture.
5) Make the tough people calls. The final lesson is often the hardest for leaders
to implement. It can mean firing your friends. An essential way to have an
impact on corporate culture is by weeding out those members of the
organization who don’t fit, and promoting or rewarding those that do. Both are
tough calls to make, but both are necessary. We have yet to see a cultural change
initiative succeed without blood being spilled. It is unrealistic to expect every
single member of the management team to embrace the new cultural norms and
imperatives. The leader must lead by making all of the most visible managers
pass a “cultural values test.” Unfortunately, this test is a very public display of
the new leadership practices. If managers fail to behave in accordance with the
desired cultural standards, they need to be identified as failures.
Corporate cultures are very hard to change. A culture forms because it works; it fits the
company’s strategy, it fits with the external environment, and it suits the needs of employees.
Over time, it becomes self-perpetuating. An organization’s culture attracts certain kinds of
people. Those who don’t like the culture end up leaving the organization, and those who like it
stay. Soon most companies get the kind of managers and employees they deserve, those who
have been attracted by the culture, promoted by it, and who know how to survive and succeed in it. It is not at all surprising that these people will strongly resist making any significant changes to their culture, but cultures can be managed.
Transforming a corporate culture requires a multi-faceted effort that will likely take not months, but years, and the concept of climate is the place to start. Climate and culture are largely a function of the day-to-day leadership that is practiced throughout the organization. The measurement of both climate and leadership practices will stimulate change, and the use of survey-feedback based leadership training will motivate managers to consistently apply the
desired practices until the corporate culture needs to change again.
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