Changing Cultures – Critical For Success: Part 1

“If we continue to do what we’ve always done, we’ll continue to get what we’ve always got.”

~Henry Ford

In these times of increasingly fast-paced change in the world in general, we find that some organizations seem to have blinkers on. When the leadership team takes a day or two to think about the future of the organization, we often hear people say, “Oh, it’s all very well for the leadership to have these off-sites and to come up with some new vision, but what’s going to happen once they get back to their offices? Nothing’s going to change.”

We are not advocating change for change’s sake. And we want to mention that change and transformation are not synonymous. Transformation is an organizational event that is big, bold and can be risky. If it’s done well, it can make a huge difference to an organization’s success, and it will include change. It can be driven by a new Vision, Mission, and Strategic Plan, and it is going to require some change. But change does not include transformation. Change is usually limited in scope, clearly defined and with a desired outcome in mind. Change is also not reorganization, although it may require some of it. This chapter presents an approach that has been used in many commercial and government organizations. It recognizes that organizational and cultural change starts with people. Thus the key is to create cultural change by getting employees aligned with the Vision and Mission, then creating the appropriate strategies to achieve them. It focuses on the people who comprise an organization, rather than on the setting in which they function.

Cultural Change Following Mergers and Acquisitions

Cultural change is particularly important following a merger or acquisition when the leadership wants to form a single entity from two very different ones. Most mergers and acquisitions are made for financial or market reasons, with little emphasis placed on the effect the move will have on the people and cultures of the merging organizations. Many mergers and acquisitions fail or do not meet the leaderships’ expectations of performance because the people and cultures were not taken into account. One exception to this is Procter & Gamble. The former chairman, Robert McDonald, told us that, when considering an acquisition, they spend more than two years doing due diligence on the organization to be acquired. This includes a very long, hard examination of the people, their values, their organizational cultures, their ways of working, and more, and it has proven to be very successful.

We had a client who was responsible for the merging of six very different organizations in a high-tech business all at once. He described them as having been “kludged together,” and they did not want to be together. He had had two previous attempts to bring the leadership of the six organizations together in team-building off-sites, and both failed. These organizations were each performing a significant function in national security, so he had to get them willingly to work together. We applied our VBP processes, including some specific techniques to pull together both people and their different areas of business. By the end of the first three-day workshop, the participants had begun to talk about “we,” “us,” and “ours.” By the end of the second workshop, they had completely reorganized themselves from six “stovepipes” into four new functionally based organizations. The critical factor here is that it was the participants who accomplished this. We got them to focus on the future, which took them out of their day-to-day differences and disagreements. It was an example of applying Albert Einstein’s maxim “We can’t solve problems by using the same kind of thinking we used when we created them.” By thinking about the future, they developed a truly shared Vision, Mission, and Values.

They identified Top-Level Goals, and then they asked themselves, “How can we achieve these?” Their best solution was by reorganizing. We returned to the organization almost two years later to help with an update to their strategic plan. It required very little in the way of change—just a few tweaks to one goal. Their original vision remained unchanged. However, the good news was that everything was working beautifully within their new organization and the members of the entire leadership team had become good friends as well as good colleagues.

Changing Mind-Sets

Changing cultures means changing mindsets on a large scale. As individuals, our mindsets are formed from very early childhood by representatives of the culture into which we are born—parents, teachers, friends—all of whom want to influence us to be good citizens of society as they view it. The society in which we live—in this context, not the national culture (although that does have some influence) but the fairly small area in which we grow up—results from that area’s history, tradition, culture, religion, environment, norms, values, beliefs, and expectations for the future. For example, most countries in the West have neighborhoods of Caucasians, Blacks, Hispanics, and Asians. The people in each of those neighborhoods probably have some of the values and mores of the country in which they now live, but also have the values, beliefs, religions, myths, and mores of their forebears. The children in each of those neighborhoods develop quite different mindsets about many things. These mindsets may not be as different from those of the indigenous national population as those of their immigrant parents; they are probably far more westernized. Even so, they still have different cultures, values, beliefs, religions, and views about marriage, gender roles, and so on.

Yet people do change their minds—through schooling, peer pressure, aging and maturing—but it usually happens in an evolutionary fashion. When we are children, the earth appears flat; that’s all we see. Then we learn in school that the earth is round (although we still wonder why people in the Southern Hemisphere don’t fall off). Then we fly in an airplane and see that the horizon is curved, and we look at pictures from space that show that the earth really is round (or rather, an oblate spheroid). That finally convinces us. However, while that logical, rational approach works when we consider “something out there,” it has little impact on us personally. A purely rational approach does not suffice when we consider the future of an organization, which means people as much as it means product. To convince people to change, we also have to include a means to tap into and protect (as much as we are able) their emotions. This includes working with their values and ensuring that the organization reflects those values. If there is a mismatch between personal and organizational values, there will be friction.

Changing the mindsets of a large group of people, and changing them significantly, means changing paradigms. These are the stories we tell ourselves that enable us to make sense of the world in which we live and in which we want to continue to live. Good stories include emotion, not just facts. The cultural approach to changing organizations, therefore, requires both leaders with vision, who can connect with their people, and good stories about why we need to change, including what we want to be and do in the future and how we plan to do it.

In his book The Masks of War, Carl Builder describes the substantial opposition to Trident submarine modernization in the UK. A sea-based nuclear weapons system, Trident was acquired by the UK government in the early 1980s as a replacement for the Polaris missile system, which the UK had possessed since the 1960s.^[1] That opposition prompted the Ministry of Defense (MOD) to issue a white paper that included many logical, rational arguments about strategic objectives, threats, and the like. They were good arguments, but few people found them compelling. Almost as an afterthought, the white paper mentioned that if Polaris subs were not modernized, the MOD would be unable to attract and retain the best people for its strategic nuclear forces. That somewhat emotional argument proved especially effective, but it hadn’t been recognized by most senior officers or politicians.

Conventional wisdom tells us that most people don’t like to change. That may have been truer before the days of widespread travel and communication when people were more isolated and insular, but it is no longer always the case. From our values model described in a later article, more than a third of the population in most Western countries (even more in the United States and Australia) is happy to change in certain ways—indeed, they create or embrace change, even for its own sake. More than a third of the population will change if they see that it is in their own best interests to do so, and less than a third actively resists change. So it can be easier to change than many people believe. We will explain how in Part 2.

Editor’s Note: This Article is excerpted from Strategy with Passion: A Leader’s Guide to Exploiting the Future by MacNulty & Woodall

^[1]      Carl Builder, The Masks of War: American Military Styles in Strategy and Analysis, JHU Press, Baltimore, 1989.