Why (culture) transformation efforts fail

27/06/2017 Subscribe to de-cooded

John Kotter published his influential article ‘Leading Change: Why Transformation Efforts Fail’ in the March 1995 edition of the HBR, highlighting eight errors that typically led to failures in transformation programmes. The eight errors mapped neatly across into Kotter’s ‘8-step change process’ – introduced in the same article – which are now widely used. These 8-steps have since become the subject of books about penguins and their iceberg and – more recently – meerkats.

Kotter’s eighth and final ‘error’ (“Not anchoring changes in the corporation’s culture”) was revolutionary at the time as culture was not recognised as a distinct discipline or something that can be deliberately shaped. Culture is now mainstream, recognised as vital to an organisation’s performance and the root-cause of some of the greatest business failures of recent years. To address it the fashion is to establish a culture change programme, with more and more high-profile CEOs espousing theirs – a good example being Dieter Zetsche’s LinkedIn post on his transformation of the culture at Daimler.

Accepting that aligned mindsets and behaviours (culture) are at the heart of all successful change programmes we thought we’d nod to Kotter and reflect on the eight most common errors in culture transformations.

Error #1: Treating culture as a stand-alone initiative

Effective culture programmes are those that are driven by, and rooted in, the organisation’s core purpose, strategic ambition and leadership practices. In other words, addressing culture and behaviours should be treated as a core element of strategy execution (it is, after all, the way that things get done).

Addressing culture in this manner may not be natural to leaders schooled in strategy, but if the design and execution of a culture transformation programme is divorced from the strategic ambition of the business the context and meaning for the change is lost. What results are well-intentioned stand-alone culture change programmes that are not aligned with the company’s direction, resulting in confusion, cynicism and wasted effort.

Error #2: Separating leadership from culture

Shaping and maintaining culture is a central element of leadership and cannot be separated out into a training or communications programme or delegated by the CEO and the senior leadership team as doing so results in a lack of focus and a sense of ‘optionality’ about change.

A tell-tale sign of this error is when a leader requests us to ‘fix’ their company’s culture, not recognising that their leadership ‘Shadow’ and the organisation they have built has created gap to the desired culture in the first place. Without changing the leadership’s behavioural ‘Shadow’ they have little chance of shifting the organisation’s behaviours.

A more common (and more difficult to spot) version of this error is when a leadership team acknowledges they need to ‘go first’ with a change programme but are only going through the motions. In this case, the leadership team know they need to be seen to be leading the change but don’t see themselves as needing to change and don’t approach it with an open-mind or a readiness to ask themselves difficult questions.

Successful culture programmes are those that recognise that leadership and an organisation’s culture are indivisible, putting the emphasis on line management for the understanding and execution of the change in behaviours throughout the organisation – from top to bottom.

Error #3: Not clearly articulating the desired culture

We often hear leaders say they ‘need to get the culture right’ but when asked what – precisely – is the culture they are looking for, an awkward silence follows. If you can’t communicate a desired way of working in a clear, simple and compellingly manner, then it is surely unreasonable to expect the rest of the organisation to understand what is expected of them or to begin the process of change.

Another aspect of this error worth highlighting is the benefits of being bold and distinctive in the statement of a desired culture. Too often values and culture statements are the generalised product of committees and group think, resulting in platitudes about performance, collaboration, integrity, etc. These vanilla statements are more likely to produce a shrug in employees or (worse) an eye-roll. The more distinctive and bold the description of a desired culture is, the more likely it is to get noticed, capture the imagination and create a sense of pride in the collective identity.

Error #4: Defining the desired culture in opposition of current ways of working

When an organisation decides that it wants to change its culture, it is easy to fall into the trap of articulating the desired change in opposition of the current ways of working. The desired shift from a ‘siloed’ way of working to a more open and collaborative approach; or from a hierarchical, top-down culture to a flatter more bottom-up organisation. Although these statements are valid and understandable, they contain the seeds of a common mistake: not only does it position the current culture as wrong, creating irritation and defensiveness amongst employees, it also is backward-looking focusing on the flaws in the current culture. It is far more effective to focus on the future culture, anchored in the strategic ambition.

Whilst it’s important to highlight what’s different, it’s also important to build from existing strengths, honouring the current culture for what is has achieved and the aspects that you want to keep. Approaching culture this way not only means the culture transformation is based on positive foundations, it also builds on existing strengths, allowing a faster and more sustainable change.

Error #5: Not making it a big deal

An organisation’s culture is hard to change. We’ve heard culture referred to as ‘the accumulated sediment of past transactions’ reflecting ways of working developed to support operations over a period of years. Not only are organisational habits usually well established, changing personal behaviours is not easy – ask anyone who has tried to give up smoking, get fit or lose weight.

To break through the natural resistance of change and the noise of daily work which all programmes compete with, it is vital to ‘go big’ on culture change. You must overwhelm the existing ways of working at speed and with intensity, explicitly forcing change and sustaining the effort over time. A ‘drip, drip’ approach of slow, gradual change will never overcome the established culture which will always act to re-establish itself.

The best description we’ve heard of a successful approach to transforming an organisation’s culture is not as a ‘journey’ (often used) but as a ‘treadmill’. You’re never finished. An ongoing focus on culture should be positioned as the new culture. If the organisation gets a whiff of culture being the ‘flavour of the month’, rather than the new way of working, it sends the signal to employees that it can be safely ignored.

Error #6: Telling people what to do

Changing culture is about inspiration as well as perspiration. Anyone who has been a subject of a ‘tell & sell’ culture campaign (or who has children) will know that people don’t change behaviour just because they are told to. Even a strong intent to change is not enough in isolation (for proof, look at whether the same development need has appeared in your annual appraisal over multiple years).

To change culture sustainably it is necessary to alter underlying beliefs, working assumptions and habits of thinking. This is because behaviour change is both an intrinsic process (from the ‘inside out’) as well as an extrinsic one (‘outside-in’) and both will form part of a successful culture transformation programme.

To create an intrinsic – and therefore lasting – shift in behaviour requires both a positive inspiration towards to better future as well as a personal moment of insight about ones’ own behaviour. This is most effectively done in in-tact teams as our immediate working peer-group is the strongest determinant of our behaviours. Telling seldom works.

Human beings are more ready to change as a result of a positive emotional driver (the creation of a ‘burning ambition’) than the nervousness and defensiveness that accompanies a negative driver for change (often referred to as a ‘burning platform’). Effective leaders know this and spend time and effort up front creating a sense of belief in their organisations as a source of energy and unification – both essential for a culture transformation to stay the course.

Error #7: Making culture change just about behaviours

Churchill famously stated “we shape our buildings and afterwards our buildings shape us”. Similarly, organisations’ processes, systems, policies and procedures, consciously developed over time to support effective working, can eventually dictate culture.

The myriad of institutional processes that support an organisation must be changed to actively support the desired behaviours. A remuneration policy that continues to reward individualistic behaviour will inevitably undermine a desired culture of teamwork.

Error #8: Saluting the flag

Too many culture change programmes involve little more than enthusiastic adoption of a new lexicon, but fail to change the underlying beliefs and behaviours. We call this ‘saluting the flag’. This tends to be prevalent in hierarchical organisations and can give a leadership team the (false) impression that the culture change is going better than it is.

You can detect this error by watching for actions not language. Indeed early, enthusiastic, adoption of the new language is often not followed by a corresponding change in behaviour – the most uncritical of language seem the ones most commonly resistant to change.

We are grateful to John Kotter for providing the initial inspiration for our own ‘Eight Errors’ and for highlighting the human and organisational dynamics of change. In highlighting the key errors that we have witnessed in cultural transformation initiatives we hope that we have added to the debate that he started back in 1995, and will give those involved in such programmes an opportunity to reflect and improve their chances of success. Do let us know your own experiences of culture transformations – we’d love to hear from you.

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Coode Associates supports and advises companies on leadership and organisational effectiveness and alignment, identifying Purpose and Values and on culture-shaping more generally. If you’d like to speak with us, we’d love to hear from you: info@coodeasssociates.com.