2 powerful and inexpensive ways to change culture

2 powerful and inexpensive ways to change culture

In order to change culture and realise a more positive and engaging one which drives business results, companies need to look closely at two areas of behaviour, writes Dave Hanna

Research into how to change culture has demonstrated repeatedly that a company culture of highly engaged leaders and employees produces superior business results.

Two recent examples of this: a study at Queen’s University Centre for Business Venturing, Kingston, Ontario, Canada, found an engaged culture yielded:

  • 65 per cent greater share-price increase
  • 26 per cent less employee turnover
  • 100 per cent more unsolicited employment applications
  • 20 per cent less absenteeism
  • 15 per cent greater employee productivity
  • 30 per cent greater customer satisfaction levels.

A recent Gallup Engagement Report documented that highly engaged business units achieve:

  • 10 per cent increase in customer metrics
  • 20 per cent increase in sales

But how does one change culture to become a more positive and engaging one?

Pivotal capabilities required to change culture
My son Scott once attended a week-long gymnastics camp taught by a former Soviet Olympic team coach. But Scott’s report when he returned home reflected his disappointment, “We only worked on one single move the entire week.”

As we spoke with the camp sponsors, they confirmed Scott’s story. “But,” they said, “that one difficult move is a pivotal one in all six all-round events. Master that move and you help yourself significantly in every event.”

I have been reminded of this gymnastics coach’s strategy frequently when considering how to change culture. Like gymnastics, there are many required moves to shape and change culture. Each organisational setting has different traditions, capabilities, and future aspirations. But there are two fundamentals that I have observed as pivotal to culture change and development, yet they are often overlooked by leaders. These fundamentals can change culture through shaping behaviours at all levels when applied within the overall change framework.

“An enterprise’s standards are most powerful when they are internalised by everyone”

Fundamental #1: Behaviours are shaped by what leaders pay attention to, follow up on, and hold others accountable for. Associates don’t just listen to a leader to determine what the real priorities are. They observe carefully what the leader does. You know the purpose is truly important to the leader if he/she subordinates self-interest in its pursuit.

For example, a shipyard owner had the top priority of building good ships. Every morning as associates entered the front gate, each saw this message carved into a large rock:

We shall build good ships here
At a profit, if we can
At a loss, if we must
But always good ships

Impressive as these words were, they represented only a good intention. How did the associates determine whether the owner was serious or not? They watched to see what the owner did. What they observed was the owner paying close attention to the customer’s specified requirements, to the design and construction of each ship, to the many quality checks and troubleshooting along the way, and to personally inspecting the final product before it went to the customer. Even a minor flaw could delay the product’s release until it was fixed.

In time, the owner’s priority to build “always good ships” became a deeply-shared value by every individual, team, department, and the whole enterprise. And they built good ships – and strong profits – beyond the lifetime of the owner.

Fundamental #2: Behaviours are shaped by peer pressure. As the shipbuilder illustrates, an enterprise’s standards are most powerful when they are internalised by everyone. When this happens, associates pay attention to, follow up on, and hold each other accountable for enterprise standards. Peers supervise themselves. This not only requires high engagement but also yields the rare capability of self-regulation. Self-regulating cultures are both high-performing today and swift to adapt when the marketplace requires change.

“Self-regulating cultures are both high-performing today and swift to adapt when the marketplace requires change”

Negative examples of peer pressure have been cited for decades. “Gold bricking” is the term to describe peer pressure that restricts performance to comfortable levels. “Groupthink” describes a team that discourages any ideas or opinions that don’t support what the “group” thinks. But peer pressure aligned with strategic standards can boost performance to new levels.

A Hewlett-Packard manager once told me about her observation of peer pressure. She was on the manufacturing floor, observing the assemblers, when one of them clipped some copper wires and dropped them onto the floor.

Another assembler, seated several rows away, saw this and came over and asked, “Excuse me, are you the one who put the copper wire on the floor?”

The second assembler said, “Yes, I did.”

Then the first assembler said, “Well, see that bin over there? That’s where the excess copper wire goes because we sell that for a lot of money. And besides, if you leave it on the floor it makes the place look like a mess.”

The first assembler looked annoyed by this and the second assembler said, “What’s the matter with you? Haven’t you heard about profit-sharing? That’s not the way we do things here.”

The manager then observed the first assembler didn’t drop any copper wires on the floor after that.

How to change culture with accountability
Leaders who closely follow up on their priorities and work teams who hold each other accountable for delivering them are pivotal intangibles for how to change culture to become highly engaged and self-regulating. What’s more, both of these intangible fundamentals are free. They cost absolutely nothing.