How to Lead Complex Culture Transformation for Complex Times

Think of any transformational change you’ve been through yourself. Starting a new family, entering a new career, marriage, the ending of a relationship. It’s more inward than outward. A time for reflection. Organic and maybe even a bit messy, right? Culture transformation for organizations is much the same. It should also be a purpose and value-driven. Sustainable and strategic. And in these complex times, the pressure for complex cultural change is unprecedented.

The world we live in, COVID and all, is really informing the kinds of culture transformation that are being asked for. We’re in what social scientists are calling the 4th industrial revolution. To put that into context:

  • The 1st industrial revolution in the 1800s decreased our dependency on animal and human labour. It was fueled by coal, made more things possible, and inched us away from a local economy.
  • The 2nd industrial revolution in the late 1800s, fueled by electricity and a wave of devices, brought us things like assembly lines. We began creating efficiencies, economies of scale and started becoming more of a global economy with the pace of change speeding up.
  • The 3rd industrial revolution in the late 1980s/early 90s, fueled by the internet and technology, started to create breakthrough capabilities like robotics and made systems exponentially faster than animal and human labour.

As leaders, we need to pay attention to what is being asked around the 4th industrial revolution. We’re living at the beginning of the digital and cyber-physical era. It’s quantum change. It’s about automation, big data, AI, machine learning. The pace is impacting humanity at work, while COVID is forcing us all to slow down and reflect on what’s really essential. This revolution is changing the game for good. And it’s impacting what’s going on inside of ourselves at a very individual level. Impacting what’s going on at a community level. What’s going on internationally. Diversity and adaptability and wellness are what is at a premium in our workplace cultures these days.

Unfortunately, less than 10% of CEOs have a process or conscious way of curating culture. How then, can we evolve our corporate culture to be more heartful and tap into that human side?

Research tells us that as a result of COVID, some 60% of leaders have identified culture as more important than their strategy, or their operations model. The thing is, according to influential culture transformation consultant, Tim Magwood, “the culture of any organization is shaped by the worst behaviours leaders are willing to tolerate.”

If we want sustainable culture transformation in our organizations, Magwood urges us to look for and notice those behaviours. Dig into them. Purge them out of our practices.

But how do you align individual behaviour change with desired organizational change when there’s often a disconnect?  Magwood recommends these seven sustainable principles and practices:

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ASSESS

1. What we measure matters. What we measure can be managed. Measure culture like any other key part of the business. Get a sense of what’s working and what’s not. Be aware that the perception of leadership may not be the perception of your employees.

A valuable approach is to measure and monitor your “Entropy Score”.  Think of entropy as a bicycle– if there’s rust in the chains or grit in the gears – that’s entropy. In any organization, the higher the entropy, the lower the trust and vice versa. Trust is the currency of any great organization. Your goal is to be in the 10% entropy range. It’s a proxy for trust.

Entropy scores are essentially based on three (customizable) survey questions:

  • What are your personal values (pick from the list)?
  • What are your current values (pick from the list)?
  • What are your desired values (pick from the list)?

For deeper insight, you can throw in a few open-ended questions. Then Magwood recommends using quarterly or more frequent pulse surveys to measure how your organization is living those values. Assess your culture, get some data, go have some conversations with people.

2. Clarify a key “culture challenge statement” to fuel meaningful and focused change.

Medline Canada, for instance, manufactures and distributes health care products to Long Term Care facilities and hospitals across Canada and the U.S. (IV bags, gloves, thousands of different products). You can imagine they’ve been going crazy. Their business is way up with COVID.  “Together, improving lives” is their cultural brand. And they really are, together, improving lives.

Their passion for purpose, for making a difference is visceral. It’s the core engine of the organization.

 

ALIGN

3. Co-create or renew core values/culture codes and include corresponding behaviours that define great and poor behaviors. Medline Canada’s values are conveyed in the acronym “CARES” which feeds into their culture statement.

 

Client experience

Accountability

Respectful communication

Efficiency

Strengthening our people

 

At the heart of it, it’s all about being a caring brand and having an impact. Medline has woven this into recruiting, rewards & recognition and so on. It’s the core engine of how they do things.

So, do the same. Define what you mean by your values. Instead of saying “accountability” get specific about what great accountability looks like (with examples) and what it’s not. Clarify poor accountability – so that it becomes something that’s coachable. Cultural codes that are coachable are part of the magic.

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ACTIVATE

4. It’s impossible to separate culture from leadership. Take a look at your senior leadership’s creative competencies and reactive competencies. We all will have a default of reactive style when we’re under stress. Some people comply, they don’t speak the truth. Some people protect. Some people control. Once we know this about ourselves, we can start to address and align our actions. We can encourage leadership development that supports the desired culture and perform leadership feedback surveys whenever possible.

5. Re-invent or optimize targeted performance systems that are holding your corporate culture back in the old ways.

6. Organizations don’t change. People do. “Be the change.” Focus on small behavior shifts that support your major transformational shift. Major culture transformation is the combination of a clear “one-degree” organizational shift – diversity, accountability, whatever that is – and little shifts at the behavioural or individual level.

ALIGN

7. Define the major shifts you want to rally behind for 6-12 months and clarify the desired outcome. This is complex work but if we don’t try to tackle it, we probably won’t create transformational and sustainable change. Get curious. Talk with your leaders and identify the systems to reinvent or to optimize in support of the desired culture you want to achieve. It might be your organization’s siloed design. It might be performance management. It might be recruiting. It might be compensation. Oftentimes it’s about communication and making sure there’s an ongoing two-way dialogue, strategic dialogue. Whatever you do, don’t boil the ocean. Tackle these shifts one at a time, in a robust way. Pay attention to one, maybe two areas to reinvent, disrupt, and optimize in concert with your culture.

As you take the transitory cultural journey, ask yourself:

Have you measured or do you measure your culture, especially in the last 6 months? (If not, this is a good place to start).

 

How can you co-create cultural change in an inclusive way rather than top-down? What can you do to get a diverse group to contribute, including representation from the front lines?

 

What is a primary culture challenge for your organization? Why change? What’s the burning platform? (Diversity, equity and inclusion is a biggie right now, following the widespread attention given to Black Lives Matter).

 

How clear or compelling is your “culture code”? Does it include core values and corresponding behaviours?

 

How clear is the desired outcome?

 

As Magwood reminds us: “Organic cultures are dynamic. They’re always shifting just like a tree or a forest. A lot of times leaders will look at just the foliage – the behaviours they can see, what’s visible. But what’s important is what’s underneath all that. If you think about the trunk of a tree and the big branches, those are the values or virtues. The root system is the beliefs. You need to check on the root system and the trunk and the limbs to make sure the tree, your organization, is healthy.”

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