Only Leaders Can Change a Culture

If you Google “Organizational Culture,” you get over 4,000,000 search results. Wikipedia has one of the first results, and as you scan the description you immediately began to blanch with confusion. If you work in a corporation that will soon undertake a “culture change” initiative, you may begin to tear up. Here is the first paragraph of Wikipedia’s description:

“Organizational culture, or corporate culture, comprises the attitudes, experiences, beliefs and values of an organization. It has been defined as the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another.” Wikipedia

For all I know, this definition is as good as any—and there are many. Only the most optimistic individual can look at this conundrum of sociology and anthropology and not become overwhelmed. Secretly, many organizational change consultants believe that corporate cultures cannot be changed. Anyone who has worked for a large company acknowledges that change of any kind is ponderously slow—if the company changes at all. The analogy most often heard describing a corporation’s resistance to change is that it is like “turning the Titanic.”

Many leaders have tried various types of culture change. Well funded and well planned culture change efforts have a history of failure. A lot of time and money spent with negligible results—except the noticeable number of frustrated employees whose productivity has suffered from the time spent away from their jobs. Many employees feel they are trying to do things differently when the old ways are comfortable and seem to work perfectly.

An organization’s culture is like a personality; personality and culture have similar characteristics. Both are complex—the relationship between various facets of their structure and function—cause and effect, are difficult to isolate. You change one thing here, and it changes something else over there. The corporate personality has deeply rooted tendencies…traits…identifiable and predictable ways of responding that are akin to the things humans do that many consider to be genetically driven—hardwired. And, most of us have an intuitive feeling that most of these core “traits” are not changeable.

Many people would say, “It comes with the business.” Some businesses, by the nature of the work and the types of people needed to do that work, have a unique identity much like a human personality. Trying to change the culture in a mining operation, an automobile plant, a chemical plant, a university, a dress manufacturer, or a software company to elicit “new ways of doing things…a new culture,” is like trying to change a professional football player into a dress designer. There are “traits” that accompany these businesses that are not easy to change, and perhaps the idea of trying to do so is “fooling around” with something we should be attempting to understand, but not change.

It appears to me that most culture change efforts fail because they do not discriminate between those facets of corporate personality that are hardwired (virtually unchangeable artifacts of specific businesses), and the more easily influenced behaviors associated with doing ones work. For instance, if you want employee in a steel mill to work more safely, it may be easier to prompt him to remind a coworker to “stand out of the line of fire,” than it is to try a safety culture change effort. In a typical culture change initiative, the objective for the employee may be to “develop a commitment to safety,”—and objective which is laudable but abstract.

The ultimate objective of most organizational change initiatives, culture change, or performance improvement initiatives is to change employee behavior—what employees do (in very specific, micro-defined ways or in general terms), how frequently they do it, when they do it, and the extra effort they exert (value-added behavior). Interestingly, a unique quality of each culture is that much of the behavior that is approved or disapproved is unwritten. Policies and procedures may demand one way of doing things, but practices—the “way we do things around here,” may require another

Leaders have the ultimate influence on employee behavior through the values they express in decisions, priorities, and promotions—through all the consequences they apply to their direct reports—which are then propagated through all the management hierarchies companywide.

Most books on leadership and management attribute leadership style as the factor that most significantly affects employee behavior. They imply that a leader’s style translates into the values and priorities that control employee behavior toward the customer and the product. Leadership style, values, visions, missions—all form the background for employee performance, but more immediate, situational factors comprise the ultimate influence—the real “behavior controls.” For a background on how this works, read my previous blogs and look for discussions about “supervisor-employee dialogs.”

Leaders influence culture, but how is a question answered in hieroglyphics. One would not fault any leader for throwing up his or her hands and allowing what-ever consulting company gets hired to use what-ever definition they want and lead the organization down what-ever special path they advise to evaluate, change or create the culture that is supposed to get the job done. Perhaps a leader’s behavior will change the organizations culture slowly, incrementally over time—perhaps, but more often a leaders values and priorities quickly and directly influence employee behavior—the behavior of managers and supervisors toward their employees and hence the behavior of the employees toward the work, the product or the customer.

When reduced to its lowest common dominator, leader values and priorities translate into what an employee gets punished and rewarded for—the behavior that his or her peers, their supervisor or their senior leaders sanction, applaud, allow, and approve of. It is apparent that a change in leadership creates changes in an organization’s climate—new priorities, performance expectations, and strategic direction—sometimes quickly. Parallel to these leadership-induced requirements, existing systems and processes—the “old way of doing things,” continues to exert their influence on employee behavior.

There is already too much literature and complex reasoning circulating about leadership, and their role in cultural transformation and managing change. I only have a few simple suggestions that might simplify understanding. I have heard them repeated by many subordinates of leaders—repeated to me, but not to the leader himself or herself.

• Leaderships’ effectiveness in general, and in particular leaderships’ ability to manage change would be enhanced if they were educated in the way employee behavior is influenced by the culture, systems, processes, the physical environment, and supervisory verbal behavior. Most leaders do not understand how immediate, real-time consequences influence what an employee does, how frequently they do it, or whether they stop doing it. They regard positive reinforcement, rewards, and recognition as necessary but not critical to business success. They often have a vague and incomplete understanding of what drives daily employee behavior; this is a liability to the overall mission of the business and at best, a risk to profitability.

• Changing a culture takes a long time, the straightest route to performance improvement and enhanced profitability is to change behavior. Specifically identify the employee behavior that will help the employee, work unit, or department excel and use the strategies discussed on this blog to increase the frequency—the strength of those behaviors. Use your knowledge of behavioral principles to control the factors that govern what an employee does on the job—today, moment by moment. The management technology to influence behavioral probability is available. A supervisor can change an employee’s job performance—today! Immediately!

• The key to employee performance and job satisfaction is the frequency and quality of his or her interactions with their supervisor. Work dialogs—what is said and how it is said to an employee—establishes the context for supervisors to say things that encourage or discourage the quality of an employee’s work, the quality of the product, and their relationship with the customer. In a work dialog, the supervisor reinforces and punishes employee behavior—whether they know it or not. Leaders and all levels of management need to know how they impact employee behavior and use that knowledge for positive influence.

• Reward, recognition and incentive systems are often barriers to effective leadership. All levels of management can become dependent on programmed rewards as replacements for hands-on coaching and supervision. Existing reward systems directly encourage the behavior that leads to the prize—the money, the payoff, or the award. A leader may be trying to create a customer focused culture, while the existing reward systems may encourage cost control or productivity; the customer may be secondary. Reward and recognition systems should be evaluated for the impact they have on teamwork, quality, ethics—and many other factors that can be usurped by compelling tangible rewards. Rewards and recognition practices represent an organizational system that influences other systems—particularly the social system, human behavior—in profound ways. They often lull the organization into a sense of well-being—a quiet before the storm of unpredicted issues gathering on the horizon.

Re-energizing Your Behavior-Based Safety Process

Creating a successful Behavior-Based Safety (BBS) process is a challenge, and companies around the world are addressing that challenge as you read these lines. Barriers to success include:

Leadership’s failure to “behave” supportively – that is they do not say and do things that convince employees that safety is value #1 – and their priorities and decisions do not support the BBS process and the removal of systems barriers to safe behavior

Trying to implement “off-the-shelf, packaged” BBS processes that are not adapted to the culture of the site’s country, business, work group, and specific job functions

An inability to transfer ownership of the BBS process to middle management, frontline supervision, and frontline employees or create a partnered process with Leaders

Dysfunctional observation processes – the result of poorly trained observers, checklists that are too generalized and not specific to the individual and work groups, and unsafe conditions and systems that are not identified and translated into action plans that are immediately addressed and resolved

The BBS process does not have effective data software that collects and organizes critical information that is reviewed and actionized by the Steering Committee and Leadership

Failure to institutionalize a social contract between all employees – Leaders, managers, supervisors and frontline employees – that encourages each employee to protect their coworkers through positive intervention when they see unsafe conditions or unsafe behavior

At the moment, your organization may be grappling with one or more of the preceding failure-traps for BBS. There are many organizations that have overcome these obstacles and have created smoothly functioning processes. But, the issue of sustainability surfaces in every BBS process regardless of the organization’s success in the first year or two.

As the problems are retired, the activities are less productive

Change, improvement and problem solving activities have plateaued

Employee learning, growth and development has peaked

If your company has implemented BBS successfully, 90% of existing safety issues will be addressed and resolved in the first year. In addition, most employees will become highly aware of their job behavior and safe work behavior will become a habit. At this point, most employees will begin to think that high rates of observation are uncalled for and the Steering Committee and Leadership roles will be less critical.

These realities set the stage for boredom and complacence. The initial necessity for improvement elicits high levels of interest and activity which in turn create energy and urgency. When most of the improvement is obtained, the context changes and all of these factors are diminished. Hence the ever-present quest for “a shot in the arm,” a phrase you hear at every safety conference. “How do we keep our employees engaged in BBS?”

You’re Asking the Wrong Question

The reason you never get a good answer to the question, “How do we keep our process exciting and keep employees engaged?” – is because you’re asking the wrong question. The real question is, “How can we generalize employee skill sets developed in our BBS process and provide interesting and challenging opportunities for them to apply their learning, tools, and experience?”

Most companies attempt to renew and reenergize their BBS processes by invoking the same rhetoric and rationales they originally used to promote employee buy-in and participation. They say the same things louder, more flamboyantly, or innovatively – but, they are still just trying harder to get employees to do the same things – more enthusiastically.

A core precept of Employee Engagement is the idea that continuous development, education, and training encourage employees to extend the reach of their behavioral skill sets and competences to new applications, challenges, and tasks. Doing the same thing over and over again leads to boredom, disinterest, and attentional drift.

Many companies default to tangible or financial rewards to reawaken employee participation and achievement in their BBS process. This usually results in renewed interest and involvement – in the short term – long range it creates problems. Financial or tangible rewards for behavior changes employee perceptions about the value of the tasks and outcomes being incentivized: They ask, “Why do they have to give us something extra to do these things?”

Most employees assume that safety is a value if the existing performance management/reward and recognition systems are applied to safety-related behavior. That is, if you can be disciplined, fired, positively evaluated, recognized (social awards), promoted, raised, or bonused for safety related behavior – then it must be a core value. When you introduce an incentive program – cash, gifts, catalog items, etc. – the assumption is that the behavior you are asking employees to engage in is somehow outside the parameters of the organizations value system.

They see the behavior incented as a “program,” a temporary collection of tasks and objectives outside the scope of their traditional performance management system. The behavior and results the incentives are applied to are perceived to be tactical, not strategic; priorities not supportive of or targeted toward an organizational value.

Next installment:

How to Energize Employees to Sustain BBS

Incentive Programs: Manipulative Quick-Fixes That Destroy Employee Engagement

Oddly, in this “unmotivated” world, it’s difficult to find anyone who really is unmotivated. Whenever I ask someone if they are motivated, they say yes. Yet, everyone believes there are a vast number of unmotivated people out there, even though no one admits to being one of them.

This view is reflected by the fact that when a company is having a bad sales year, the management team instantly starts shopping for motivational programs for their salespeople. If production is down or product quality is poor, the first step on the problem-solving agenda is to blame lackluster performance on unmotivated employees.

Management seems to think that its key productivity problem is related to motivation−a fact that is substantiated by the $100 billion spent last year on incentives. This is a lot of money to spend on the solution to a problem that (according to employees) does not exist. If we all think we’re motivated; are we all wrong? Could we be unmotivated and not know it−like having a disease without any symptoms?

Sports coaches are admired because they are good “motivators.” Some university coaches can earn $50,000 for giving a lunch speech to businessmen who are keen to hear the coach talk about how they motivate their players. But, if Notre Dame has a poor season, the casual observer immediately thinks that the team needs a new coach−one who can “motivate” the team more effectively.

Have you ever heard an athlete express the need for motivation? ”Yeah, we lost the game last night because we were unmotivated.” It may sound absurd, but the prices of goods and services are increased considerably by the cost of so-called motivation− financial incentives, awards, cups, mugs, shirts, hats, travel, spot-cash awards–all of these and many more types of incentives increase the cost of everything we buy and sell.

So management spends billions on programs, gimmicks, and goods to motivate their employees who, when asked, deny the need for any of these things. Many more problems are hidden behind the motivational myth camouflage–the easy catch-all that quickly attributes organizational performance failures to employees “not trying hard enough.” It’s a myth perpetuated by management since the beginning of the Industrial Revolution: if management can’t identify the cause of a problem, they blame it on lazy employees.

As it turns out, improper problem solving is the culprit here. The key to solving any problem is to first precisely identify the causal factors. Even the science of medicine did not make much progress until diagnosis (problem identification) became more accurate. Around the birth of Christ, for example, most people believed that diseases were sent as punishment from the gods. Treatments were aimed at pleasing the gods so that the disease would be taken away. Hippocrates believed the body had four humors: blood, phlegm, black bile, and yellow bile. If a person was ill, it meant that an imbalance existed in their humors and so they would take a treatment−such as having their blood sucked by leeches−to return the balance to normal.

The modern organization hasn’t been around that long, of course, but since its inception, management has made a similar mistake by identifying performance problems as the result of “poor motivation.” As mythical solutions go, this is a good one. You cannot see motivation, or count it, or take a picture of it. Hence, it’s an easy way to take the focus off of management performance and place the blame on the employees.

Some people will argue that they can see motivation, when they really mean that you can look at performance data and if it is not to your liking, you can say that poor motivation led to low performance. So really, motivation is a mythical “something” that we pull out of the hat to explain why performance is poor. In an attempt to sidestep the blame for a plethora of performance problems, management came up with a perfect foil–the unmotivated employee.

The “motivation” problem has consumed more time and money than any problem in the history of capitalism. The incentive industry employs tens of thousands of people and generates billions of dollars in annual sales, so we know the root of their motivations. However, assigning performance problems to poor employee motivation has misdirected organizational problem solvers and delayed the identification of the real causal factors that seriously inhibit employee performance. Systems deficiencies, process malfunctions, job design problems, and nonparticipative management styles have been overlooked until recently because America’s management was too busy ferreting out the intricacies of the great motivational crisis.

Contrary to popular belief, when employee performance improves in the presence of small incentives, it is a good sign that the organizational system within which the employees are working is dysfunctional. The incentives are only temporarily causing the employees to circumvent and overcome the restraints that typically limit their performance. In dysfunctional organizational settings, incentive efforts can have a significant immediate effect because the discrepancy between employee performance and their potential to perform is so desperately broad. The gap between actual employee performance and performance potential is the widest when organizational systems and process problems have not been addressed.

The problems that incentive systems, motivational programs, and manipulative reward strategies create are, in the long term, crippling to an organization’s competitive functioning. Some negative effects of overusing incentives include the following:

1. Incentives become entitlements. Managers and employees become addicted to the constant barrage of doo-dads, baubles, trinkets, and award paraphernalia. The annual budget for motivational programs, speakers, and incentives becomes part of the corporate culture and employee compensation. Eventually, management can see no way to decrease the budget for merchandise and cash, because employees see these perks as part of their compensation.

2. Incentives weaken management skills. Why should managers and supervisors learn to facilitate employee performance or address issues that obstruct their performance when short-term incentives appear to do the job for them? This way, managers can abdicate their responsibility for developing their employees and leave it up to the “motivational” system. The core job of managers is to encourage employee engagement and effort through discussions about the work with the employee. Most managers believe that incentive systems and motivational programs negate the need to have meaningful conversations with employees about the work or to develop any relationship with them whatsoever.

3. Incentives devalue the customer, the product, and the work. Constant rewards for work behavior imply that there is no inherent value in doing the right thing for its own sake. The message is that one does a good job or improves because of the award at the end of the rainbow. As a result, employees do not engage with the company’s mission. Why should they? The mission is obviously not meaningful if the job is only worth doing for a T-shirt or a ball cap.

4. Incentives enslave employees. Meaningful work to most people is about the value of the work being done and about the feeling that they are creating that value through their own volition. Incentives indenture employees to toil for the next small prize or award. The employee, forced to accumulate points and scores to validate his or her extra effort, is driven by the next incentive in the queue. He or she soon loses the sense of personal accomplishment one feels when one creates something of value. Like a mercenary, one’s work is cheaply sold for the next bit of praise or reward that management won’t release unless that employee earns his/her share.

5. Incentives erode teamwork. In the midst of motivational programs, incentive initiatives, the competition for recognition, and the lack of any meaningful relationship with the organization, co-workers begin to compete against each other for merchandise and accolades. Mentoring and coaching become much less frequent. Sharing and support vanish. Performers strive to distinguish themselves from their co-workers; they seek to ensure that they are given credit for each and every achievement. Selflessness and the team spirit vanish, because the distribution of merchandise and other rewards creates a system of winners and losers.

6. Incentives destroy management/employee relations. In such an environment, managers seldom seek to coach or build relationships with their subordinates. They see employees as cogs in a wheel driven by the motivational machinery. This incentive machine depersonalizes the employees in the eyes of managers. Similarly, the employees see the manager as the handler coaxing them with the perennial dog biscuit in hand. The manager controls the distribution of goods, and as such incurs no positive regard from the employee. Employees resent being pulled back and forth like puppets by each new motivational program. They soon learn that when it comes to being recognized for a good job, there are many strings attached.

7. Incentives change self-perception. Selling out for merchandise does not increase self-esteem or enhance self-respect. The mercenary and the patriot see themselves very differently. The incentive frenzy has slowly erased employee commitment to the company along with loyalty to the customer and the product.

Unlike the short-term effects of incentives and rewards that must be continually innovated and redesigned lest they lose their novelty and impact, ongoing systems and process improvements permanently facilitate employee performance potential and strengthen the organization’s competitive capability. Over the last ten years, performance has improved significantly in those organizations that use participative management and problem solving to engage employees. These organizations encourage employees to identify and resolve the systems and process problems that restrain performance potential.

How would employees perform if their only encouragement was the traditional salaries, raises, bonuses, and promotions? Has the constant bombardment of merchandise incentives eroded the most valuable component of the worker’s self-esteem–pride in doing something well? Have the values that drove a strong work ethic been replaced with the instant gratification of trivial rewards? In the long run, the destiny of our economy and our global competitiveness will depend on the values promoted by our management practices. Doing something well and doing it right can remain an employee value.

Unfortunately, the management teams most likely to depend on incentive programs are also most likely incapable of or disinclined to identify and seek meaningful solutions to the organizational problems that limit employee performance. The strategic importance of management development has been overlooked and the easy gains of incentives have replaced management skills.

Fortunately, the quick fix mentality that created the incentive industry is slowly being replaced by responsible organizational change tools and strategies. Many organizations are in the midst of shifting from incentive-driven to values-driven cultures. However, the easy gains temporarily obtained with merchandise and other incentives are difficult to relinquish entirely. Management still carries a cumbersome carrot on its back.

Most employees don’t want these condescending programs in the first place. They want respect and just recognition and reward for a job well done. Following are the initial steps to help an organization transition back to the traditional rewards−promotions, earned bonuses, equitable salaries, and worthwhile raises− for performance excellence: