Guest Blog: The 6 Critical Steps Required to Transform Culture

Part II of John Mattone’s thoughts on cultural transformations in your organization
Don’t forget to sign up for John’s webinar with us, tomorrow, January 26th!

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The 6 Critical Steps Required to Transform Culture

  1. Culture starts with the CEO. Are you a CEO who ‘Thinks Different” and “Thinks Big”?
  2. Do you counter-balance “Thinking Different” and “Thinking Big” with heavy doses of humility? In other words, do you have the guts to be vulnerable and recognize that while you may be great in certain areas both individually and collectively as a company, you still have …gaps that need to be addressed to achieve greatness? Are you able to see and feel the pain associated with staying the same and are you able to get your team to see and feel the pain? People only consider changing when the pain associated with staying the same is perceived to be worse than the pain associated with change.
  3. Creating a compelling future for your people and teams? It starts with great leadership at all levels.
  4. Are you able to change mindsets? If you can change mind sets you can change behavior. If you can change behavior, you will change results.
  5. Are you able to push the talent levers in support of your new culture?
  6. Are you passionate and diligent in measuring progress and course-correcting?

Corporate Culture Exists Whether You Define It or Not

Whether you articulate it or not, your organization has its own culture. When corporate culture is ignored, it might evolve in a way that’s good, but then again, it might calcify into a culture that drives away your best people and stifles improvement efforts. Know the goals you want the organization to achieve and learn what changes are necessary to achieve them. Change is hard, but nothing worthwhile is easy.

 

About John Mattone

John Mattone is widely regarded as one of the world’s leading authorities on leadership, talent and culture. He is the author of eight books, including three best-sellers and has been recognized by The Thinkers 50 and Globalgurus.com as one of the world’s top ten leadership authorities and executive coaches.

 

The Connection Between Culture and Performance

In Primed to Perform, Neel Doshi and Lindsay McGregor explain the counter-intuitive science behind great cultures, building on over a century of academic thinking. They share the simple, highly predictive new measurement tool—the total motivation (ToMo) Factor—that enables you to measure the strength of your culture, and track improvements over time. The authors’ original research demonstrates how total motivation leads to higher performance in iconic companies, from Apple to Starbucks to Southwest Airlines. Most importantly, they teach you to build great cultures, using a systematic and sustainable approach.

High performing cultures can’t be left to chance. Organizations must create systems that shape and maintain them. Whether you’re a five-person team or a startup, a school, a nonprofit or a mega-institution, Primed to Perform shows you how.

Here is how Doshi and McGregor connect the dots between culture and performance:

  1. What is performance at its best?

There are two types of performance, both important yet mutually opposed. Most organizations manage tactical performance—the ability to execute the plan. We’ve all seen performance dashboards and rubrics tracking easy-to-measure outcomes. But adaptive performance—the ability to diverge from a plan—is just as important but much harder to understand and measure, until now.

Organizations must balance tactical with adaptive performance to reach the highest levels of customer experience, innovation, ethics and sales.

  1. What is the psychology of high performance?

To build a high performing culture you must first understand what drives peak performance in individuals. The answer sounds deceptively simple: why you work determines how well you work.

There are six basic reasons why people work—and they aren’t created equal. Play, purpose, and potential strengthen adaptive performance while emotional pressure, economic pressure and inertia weaken it. In environments that maximize the first three and minimize the last three, individuals exhibit those hard-to-measure but highly coveted adaptive traits of creativity, problem-solving, persistence and collaboration. This phenomenon is what we call total motivation, or ToMo for short.

  1. How does culture drive that psychology?

The highest performing cultures build upon the psychology of total motivation. They train leaders, design jobs, shape performance management systems, and structure their teams to enhance play, purpose, and potential and eliminate emotional pressure, economic pressure, and inertia. The result: higher sales, more loyal customers, and more passionate employees.

Soundview has arranged a special FREE webinar with Neel and Lindsay for you to hear more about this culture of high performance, and to ask your questions about how this concept can be applied in your organization. Join us on November 3rd for How to Build the Highest Performing Cultures.

The Peril of Expertise and the Promise of Breaking Down Barriers

LESSONS FOR MASTERING SILOS One of the most disastrous examples of the “silo” effect, in which an entity’s different units are isolated and focused exclusively on themselves, is the great recession of 2008, according to financial journalist Gillian Tett, who wrote a book on the financial crisis. “Almost everywhere I looked in the financial crisis, it seemed that tunnel vision and tribalism had contributed to the disaster,” Tett writes, describing her research. “People were trapped inside their little specialist departments, social groups, teams or pockets of knowledge. Or, it might be said, inside their silos.” After finishing Fool’s Gold, her book on the financial crisis, Tett decided to explore in more detail the silo effect and its impact on all facets of our society. The result is a fascinating new book entitled The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers. It may come as a surprise to many, Tett writes, that the silo effect should be so influential in today’s interconnected world. With the technology and wide variety of instant and global communication tools available today, the idea that people, business units, institutions and agencies can be “closed off” from the rest of the world can seem anachronistic. This is what Tett calls the paradox of an interconnected world. “In some senses, we live in an age where the globe is more interlinked, as a common system, than ever before,” she writes. “But while the world is increasingly interlinked as a system, our lives remain fragmented.” Organizations are subdivided into many units that don’t talk to each other, nations are polarized along political lines, and even professions seem to become increasingly complex, their secrets open only to a small pool of experts. “People,” Tett explains, “live in separate mental and social ‘ghettos,’ talking and coexisting only with people like us.” If some of Tett’s terms, such as “mental and social ghettos” or “tribalism,” seem to be more the jargon of an anthropologist than a financial journalist, there is a reason: Before becoming a financial journalist, Tett trained as an anthropologist, earning her Ph.D. after spending months in a remote mountainous village in Soviet Tajikistan, studying a culture that maintained its ethnic, Muslim identity while embedded in a Soviet, atheistic society. The Anthropological Foundation of Silos Tett’s anthropological background is what makes The Silo Effect a unique and illuminating treatise on what can sometimes be seen as a maddening phenomenon. As Tett makes clear, the silo effect exists because that’s what people tend to do. Before launching into the case studies that form the heart of the book, she spends an entire chapter laying the anthropological foundation of silos, notably through the work of anthropologist Pierre Bourdieu, of “classification” — that is, humans’ tendency “to arrange space, people and ideas.” We create mental maps that become the cultural “habits” that govern our physical and social environment. Silos, Tett explains, are thus “cultural phenomena,” arising out of the systems we use to classify and organize the world. In the first half of the book, Tett details three cautionary stories of the damage that can be wrought by the silo effect, focusing on the once innovative Sony, left behind in the digital revolution; financial giant UBS, which was devastated more than any other bank by the subprime mortgage crisis; the world’s economists who failed to notice the global financial crisis fast approaching. However, just as Bourdieu argued that humans are not robots and can’t deprogram their mental maps, Tett insists that we can master silos rather than the other way around. The second half of the book tells positive stories of “silo-busters,” including Facebook, giant medical center Cleveland Clinic and hedge fund BlueMountain Capital. Perhaps the most engaging story in this second half is the journey of a thin, shy computer geek who joined the Chicago Police in the wake of 9/11 and would eventually be able to use his computer training to help the police break down its silos. From these stories, Tett draws the lessons of how to master silos: keeping the boundaries of teams “flexible and fluid,” with multiple opportunities for members of different teams to “collide and bond”; ensure that compensation plans discourage silos; ensure the open flow of information; encourage the questioning of the rules of the environment; and use technology to break down the silos. Insightful, engaging and practical, Tett may have written the definitive work on the silo phenomenon.

The Story of the Unlikely Grassroots Movement That Saved a Beloved Business

TWO BUSINESS PHILOSOPHIES COLLIDE

In many ways, the story of Market Basket, a regional grocery chain in the northeast, is a familiar one: The heirs to a family business engage in a tug-of-war for control of the company. In this case, however, the community, including employees, managers and customers, responds with massive action in favor of one faction of the family over the other. They mobilize with protests, petitions (organizers of one last-minute petition hoped for a few hundred signatures; they received 40,000) and widespread boycotts by customers — not to hurt the company but to save it — making the battles of Market Basket unique in the annals of family-business history. As told engagingly in We Are Market Basket, written by marketing professor Daniel Korschun and newspaper reporter Grant Welker (who covered the contentious saga for the local Lowell Sun daily), the battle of Market Basket was not just a war between cousins but a fight between two opposing views of the purpose of business.

On one side is Arthur T. Demoulas, the son of Telemachus Demoulas, son of founders Athanasios and Efrosine Demoulas. On the other side is his cousin, Arthur S. Demoulas, son of George Demoulas, who is another son of the founders. At one point, brothers Telemachus and George ran the chain in harmony. There is no such harmony between their sons.

There are years of recriminations, lawsuits and board battles too complex to review here. However, for the authors, the core of the conflict is in two opposing business philosophies.

Serve the Stakeholders

For CEO Arthur T. Demoulas, the purpose of the company, write Korschun and Welker, was to serve the needs of the loyal low- to middle-income customers at the low-priced store. Following what is now known as a “stakeholder” view of business, Arthur T. ensured that the company fulfilled the needs and desires of its employees, served the communities in which its stores were located and even went the extra mile for its loyal vendors.

We Are Market Basket offers numerous stories of Arthur T.’s stakeholder philosophy. For example, Arthur T. not only empowered his employees but also took a personal interest in every employee: He once offered to pay to move a store director’s severely injured daughter to a better hospital. Instead of cutting off a vendor that had fallen on hard times, he helped the vendor restore his business.

The company also considers itself a corporate citizen and contributes millions to charities.

Or Serve the Shareholders

Arthur S. and his supporters, according to the authors, had a completely different view of the business: A company existed to make money for shareholders. Arthur S. disagreed with the large employee profit-sharing bonuses and other spending that didn’t benefit shareholders. When he gained control of the board, he and his supporters set out to fire Arthur T. and succeeded in June 2014.

The firing led to huge protests in the street, walkouts by employees and most managers and a wholesale boycott of the stores by customers — a revolt that grabbed the attention of the northeast media. In essence, all of the stakeholders that Arthur T. had supported for so many years united and shut down the company. The board finally relented; Arthur T. was restored.

Neither Arthur T. nor Arthur S. agreed to be interviewed for the book, but in some ways this only adds to the authenticity of the narrative. Many company books are written by the CEO, giving a perhaps overly simple and positive view of the company’s efforts. We Are Market Basket is written from the point of view of employees (known as “associates”), managers, vendors and customers. It is written by the “we” of the title and, for that reason, deserves to be carefully read by all managers who want to learn the secrets of a successful stakeholder strategy.

Creating Urgency and Growth in a Nanosecond Culture

thehighspeedcompany

Best-selling author Jason Jennings knows that speed is the ultimate competitive advantage. But in 2015, companies of all sizes still struggle to adapt quickly. They know it’s crucial to their future but need help to get everyone implementing speed and urgency at all levels.

Jennings and his researchers have spent years up close and personal with thousands of organizations around the world — figuring out what makes them successful in both the short and long term. The High-Speed Company reveals the unique practices of businesses that have proven records of urgency and growth. The key distinction is that they’ve created extraordinary cultures with a strong purpose, more trust and relentless follow-through. These companies burn less energy, beat the competition and have a lot of fun along the way.

Jennings shows how you can implement the same strategies that have made companies such as CoBank, O’Reilly Auto Parts, Grainger, Henry Schein, Google, and Johnson & Johnson great, including encouraging employees to make the right moves without hesitation, doing more to constantly innovate and bring in new customers, and being transparent about management decisions.

Breathe easier. Handle any hurdle. Get things done faster. That’s the way of the high-speed company. Jennings shows you how to build and sustain your own.

IN THIS SUMMARY, YOU WILL LEARN:

• The key traits of high-speed companies –– and why they outperform.

• How purpose drives high-speed companies.

• How to address the “immutable law of suckage.”

• Why high-speed companies are defined by stewardship.

Not a Soundview Executive Book Summaries subscriber? Then click on the title to purchase and download it right now to begin learning these critical business skills.

 

Insights From Inside Google That Will Transform How You Live and Lead

WHAT’S WORKED AT GOOGLE

Laszlo Bock, head of People Operations at Google, once interviewed a job candidate who was clearly wearing a new and quite expensive pinstripe suit purchased just for the interview. Bock told the candidate that he had good news and bad news. The good news was that he was hired; the bad news is that he would never wear that beautiful suit again.

Googlers, as the 50,000 employees of Google are called, do not wear suits. However, casual clothes is just one (rather minor) facet of a progressive working environment that has allowed Google to win numerous Great Place to Work awards, not only in the United States but in countries around the world. In his book Work Rules: Insights from Inside Google That Will Transform How You Live and Work, Bock details how the company recruits, motivates and manages the highly talented people who join the company.

A High-Freedom Approach

For Bock, a “high-freedom approach” to managing people is key, as compared to the low-freedom command-and-control approach of traditional companies. For example, in addition to mission (Google’s succinct mission statement is “to organize the world’s information and make it universally accessible and useful”), the cornerstones of Google’s culture are transparency and voice, he writes.

While many companies insist they champion full transparency of the company’s operations and giving their employees a voice, Google translates the words into unequivocal, on-the-ground action. For example, one would expect that Google would carefully guard its code base — the collection of source code that contains, Bock writes, “the secrets of how Google’s algorithms and products work.” In most software companies, new engineers can see some of the code base for just their product. “At Google, a newly hired software engineer gets access to almost all of our code on the first day,” he writes. The issue is trust, he explains. If you trust your employees, there is no reason not to be transparent and not to let them guide decisions.

As Bock writes in one of the two “work rules” that summarize the chapter on culture, “Give people slightly more trust, freedom and authority than you are comfortable giving them. If you’re not nervous, you haven’t given them enough.”

Each chapter ends with two to four of these succinct work rules that encapsulate the core lesson of the chapter. These work rules are listed at the end of the book, creating perhaps one of the most comprehensive guides to managing people ever gathered in four short pages.

Some of the work rules are progressive but not surprising. The work rules for selecting new employees, for example, are set a high bar for quality, find your own candidates, assess candidates objectively and give candidates a reason to join.

Other work rules may be more unexpected. The rules for compensation begin with “Swallow hard and pay unfairly. Have wide variations in pay that reflect the power law distribution of performance.” In other words, it is often assumed that employees at a certain level should make approximately the same amount of compensation, with some slight adjustment for performance. However, the contribution that employees make to the company will vary greatly from employee to employee. Studies show that the top 1 percent (in performance) of workers generates 10 times the output of average workers. Employees, Bock writes, should be compensated accordingly.

While there are numerous books about Silicon Valley management methods, Work Rules offers both an in-depth exploration of the workings of the iconic company’s HR efforts and policies and a take-away list of practical to-dos valuable to the HR functions of any company.