When a business isn’t going
well, its leaders often think about how to change the corporate culture.
They’re right to recognize that the “soft” stuff people’s beliefs and behaviors
is at least as important as hard stuff, such as organizational structure, if
not more so. Making changes in strategy or structure by itself takes a company
only so far.
The hardware of a computer is useless without the right software.
Similarly, in an organization the hardware (strategy and structure)
is inert without the software (beliefs and behaviors).
Most efforts at cultural
change fail because they are not linked to improving the business’s outcomes.
The ideas and tools of cultural change are fuzzy and disconnected from
strategic and operational realities. To change a business’s culture, you need a
set of processes social operating mechanisms that will change the beliefs and
behavior of people in ways that are directly linked to bottom-line results.
In this part of article,
we present a new reality-based frame-work for cultural change that creates and
reinforces a discipline of execution. This approach is practical and completely
linked to measurable business results.
The basic premise is simple:
cultural change gets real when your aim is execution. You don’t need a lot of complex
theory or employee surveys to use this framework. You need to change people’s
behavior so that they produce results. First you tell people clearly what
results you’re looking for. Then you discuss how to get those results, as a key
element of the coaching process. Then you reward people for producing the
results. If they come up short, you provide additional coaching, withdraw rewards,
give them other jobs, or let them go.
When you do these things,
you create a culture of getting things done.
RAM: I was
observing a meeting at a newly formed division of a company in the Fortune 20.
The division, with some 20,000 employees, was the product of a merger in 2001
of two companies in the same industry. It had a new leadership team, and this
was only its second meeting. The central issue for the leadership team was how
to create a new culture to improve unacceptable performance. Return on capital
was less than 6 percent, and shareholder value was being destroyed. The new CEO
of the division and the leadership team knew that cost savings through
synergies would not be enough to make the division an outstanding performer.
The general practice in
both merged businesses was not to hold people accountable for commitments they
had made individually. Under the rubric of so-called teamwork, each management
team performed poorly. For example, each had lost market share and suffered
from lower return on investment because its people did not reduce costs in
logistics ahead of competitors. This task is one that is truly under
management’s control, but the leader in charge of logistics received the same
reward as other members of the management team.
The team had hired a human
behavior boutique consulting firm that specialized in cultural diagnostics. The
consultant had performed a standard cultural analysis based on surveys that
asked employees fifty or sixty questions
about the division’s
values (integrity, honesty, and the like), whether decision making was
autocratic or collegial, and how power was distributed. The results were stylishly
presented, but nothing in the survey showed how the
division could work differently in terms of its beliefs and behaviors so that
it would achieve outstanding business results.
The discussion at the meeting
was going nowhere until, in her characteristic probing style, the division’s
CEO took over and started by asking the right question. “If we want to change
the culture, what should be our next question?” One member of the team asked in
response, “How should the culture be changed?” A second member said,
“Make it better.” Then someone asked: “From what to what?” and the
lightbulb went on.
The CEO divided the team
into groups of six and asked each to find ten pairs of “from what to what.” The
groups wrote down some big words: “from nonperformance culture to performance
culture”; “from static to continuous
improvement”; “from domestic
to globally oriented.” But specificity was missing.
The CEO bore in and
challenged the groups to make the list more specific and to find one “from what
to what” change that, if carried out, would dramatically improve the behavior
of the key people who drove the behavior of everyone else in the division. Since
most people have difficulty in being this specific, the CEO took the next step:
she divided the leadership team into two-person teams and asked each pair to identify
one idea about what the culture was now and what should it become. The teams
agreed that improving accountability would be the most important change. Then
the leader asked, “Where does that begin?” and the answer was: “With this
team.” Then the leader asked, “Are you willing to hold each of us accountable?”
There was a stunned silence. “But if you don’t practice the right behavior in this
team, will anyone else in the organization?” he asked. No answer was needed.
The final question was:
“After we change our group’s behavior, what do we do next?” The head of HR
said, “Communicate it to twenty thousand people.” The leader asked, “How would
that make anyone change? It won’t work by itself. What will work is
the practice of accountability beginning right here with this team. After we
hold ourselves accountable, the next phase is for this team to
hold the three hundred
managers in this division accountable for their performance, without which
three thousand supervisors and seventeen thousand employees will not experience
the culture and discipline of execution.” Then they discussed specific action
steps for putting accountability
into the culture at the
top of the division and the three hundred managers reporting to the top team.
They would have follow-through, feedback, and rewards tied to individual
performance and behavior. The behavior included each management team member
holding each of their direct reports accountable as well.
OPERATIONALIZING CULTURE
There’s a saying we
recently heard: W e don’t think ourselves into a new way of acting, we act
ourselves into a new way of thinking.
Acting your way into a new
way of thinking begins with demystifying the word culture.
Stripped to its essentials, an organization’s culture is the sum
of its shared values, beliefs, and norms of behavior. People who are setting out
to change a culture often talk first about changing the set of values. That’s
the wrong focus. Values fundamental principles and standards, such as integrity
or respect for the customer or in GE’s case boundarylessness may need to be
reinforced, but they rarely need changing. When people, especially those at the
highest levels of the company, violate one of the company’ s basic values, the leader
must step forth to publicly sanction those violations. Anything less is interpreted
as a lack of emotional fortitude.
The beliefs that influence
specific behaviors are more likely to need changing. These beliefs are
conditioned by training, experience, what people hear inside or outside about
the company’s prospects, and perceptions about what leaders are doing and
saying. People change them only when new evidence shows them persuasively that they’re
false. For example, if people in an organization believe they’re in a mature
industry with no growth prospects, they won’t spend a lot of time and energy
intensively looking for growth opportunities. If they believe others who do
less than they do will get the same rewards, that belief will drain their
energy.
One of Dick Brown’s first
priorities at EDS was to change the culture by focusing on beliefs and
behaviors.
At a meeting of the EDS senior
leadership team in January 2000, he asked people to identify the most critical
beliefs that had shaped the company’s view of itself in the past five years and
the beliefs most needed now for the journey
forward. Working in
groups, they came up with the following lists.
Old EDS Beliefs
• We are
in a commodity business. EDS is in a slowgrowth, mature industry computer
services outsourcing that has lots of competition, little differentiation, and
thus inherently low profit margins.
• We can’t
grow at market rates. As the biggest player in a commodity business, EDS has
difficulty finding profitable growth.
• Profits
follow revenues. If EDS can get more business, it will somehow make
money on it. (This belief is a formula for misallocating resources.)
• Each
leader owns all resources control is key. Each division has total autonomy
and safeguards its turf. (This belief makes collaboration among business units impossible.)
• My peer
is my competitor. (Like owning the resources, this belief is a major
barrier to success. Internally competitive behavior is destructive. The
competitor is out there in the marketplace, not in the next unit. Teamwork,
sharing of knowledge, and cooperation are absolutely essential to winning in
the market.)
• People
aren’t accountable (“it’s not my fault”).
• We know more
than our clients.
• Our
people will tell the client what solutions he or she needs. (This
belief prevented EDS people from adequately
listening to their clients’ problems and
needs.)
New EDS Beliefs
• We can
grow faster than the market —profitably, and using capital efficiently.
• We can
increase productivity year in and year out.
• We are
committed to our clients’ success.
• We will
achieve service excellence.
• Collaboration
is the key to our success.
• We are
going to be accountable and committed.
• We will
be better listeners to our clients.
The second list became an
agenda for attitude change, not only among the top executives but for all of
EDS’s leaders.
Behaviors are beliefs
turned into action. Behaviors deliver the results. They’re where the rubber
meets the road. When we talk about behavior, we are talking less about
individual behavior than about norms of behavior: the accepted, expected ways
groups of people behave in the corporate setting the “rules of engagement,” as some
people call them. The norms are about how people work together. As such, they
are critical to a company’s ability to create a competitive advantage.
LINKING REWARDS TO PERFORMANCE
The foundation of changing
behavior is linking rewards to performance and making the linkages transparent.
A business’s culture defines what gets appreciated and respected and,
ultimately, rewarded. It tells the people in the organization what’s valued and
recognized, and in the interest of trying to make their own careers more
successful, that’s where they will concentrate. If a company rewards and
promotes people for execution, its culture will change.
Far too many companies do
a poor job of linking rewards to performance. What’s the problem?
RAM: While
some leaders in some companies successfully make this link, too many behave
like wimps. We’ve seen again and again that people love to give rewards; they
love to be loved. But they don’t have the emotional
fortitude to give honest
feedback and either withhold a reward or penalize people. They don’t feel
comfortable rewarding performance and behavior. They procrastinate, sugarcoat,
and rationalize. Leaders sometimes even create
new jobs for nonperformers.
As a result, the organization below is totally confused. At EDS, Dick Brown
moved quickly to make sure the performers got rewarded more than the
nonperformers.
Lack of accountability had
been a major problem in the company, as the leadership ranks well understood.
“There were no negative consequences for poor performance,” recalled one
executive. “Not only no consequences, but if
you were part of the good
old boy network, there really wasn’t accountability for negative behavior
toward the company.” Added another , “It was always somebody else’s problem.”
Brown instituted a system
that ranked all executives in quintiles by how well they performed compared
with their peers, and rewarded them accordingly. It is similar to the “vitality
curve” Jack Welch introduced at GE to differentiate “A,” “B,” and “C” players.
Ranking people in this
fashion generates controversy when managers design and execute the system
clumsily using it, for example, to arbitrarily force a certain percentage of
people out of the organization. But if coupled with coaching that gives subpar
performers the opportunity to improve themselves, it can greatly help introduce
a results-oriented culture. The process has to have
integrity: the right information
must be collected and used, based on behavior and performance criteria.
Leaders must give honest
feedback to their people, especially those who end up in the bottom rankings. That’s
what Brown did. For example, he says, “In the first year, a person came to me
and said, ‘Your system doesn’t work. Last year I was rated really well. This
year I did the same work and achieved the same level of performance, but I was
rated really low.’ I said, ‘Well, let me give you an answer. It’s one of two
things or both. Number one, chances are you weren’t as good as you thought you
were last year. Number two, if you were that good
and you did the same job this year, you’re rated lower because you didn’t get
any better, and everyone else did. You’ve got to realize, EDS is improving, and
everybody’s got to improve the job they do, and if you’re staying the same,
you’re falling behind.’ ”
EDS also factors individuals’
behavior into its rewards. Collaboration, for example, was important to the
success of the new business model, but in the old EDS there was very little
collaborative behavior. So in the incentive portion of their compensation,
leaders are now evaluated and rewarded in part on how well they work together.
Suppose Bob, in one line of the business, develops a client, then gives the
client to Linda in another line, because her unit can better serve the client.
His sacrifice will be noted in his evaluation, and his organization leader will
take it into account in setting his bonus. Salespeople get specific incentives for
business they deliver to other lines of business.
Whatever approach you use
to determine rewards, the goal is the same: the compensation system has to have
the right yields. You should reward not just strong achievements on numbers but
also the desirable behaviors that people actually adopt. You should increase
the population of A-players, defined as those who are tops in both behavior and
performance. You should remove the nonperformers. Over time, your people will
get stronger and you’ll get better financial results.
LARRY: You get
what you measure for , and it’ s a straightforward process. At the beginning of
the year, I write a letter to each of Honeywell’s business leaders and staff
leaders and say, “This is what we agreed are your goals.” The first component
is the financial goals revenue growth, income, cash flow, productivity, or
other variables depending on the nature of the business and what we’re trying
to accomplish at that particular time.
The goals will be weighted
according to the nature of the business. For example, if a business needs to
develop four new products, I may lower the goal for sales growth and productivity
and raise the goal for product introductions.
The second component would
be other goals, focused on what we’re doing both this year and in the long
term. These goals could be anything from creating the Six Sigma infrastructure
to breaking into a specific marketplace. We formally evaluate performance and
potential twice a year in our management resource reviews. And then we link the
results of the evaluations to compensation.
The general manager of
each business gives specific goals to each of his direct reports. They may all
have the same financial goals, but they’ll have different nonfinancial ones building
a stronger organization, working on diversity, or whatever the key issue of the
day is.
You want differentiation
among options, among bonuses, and among salary increases. Differentiation is the
mother’s milk of building a performance culture. For the top 250 people, I use
stock options. We stay competitive on base salaries, but anybody who wants to
make a lot of money at Honeywell has got to make it on options.
Here again, they’re not an
entitlement. For example, I’ve got a seasoned professional who’s good at his
job but doesn’t exhibit further potential. I’m going to pay him a tidy cash
bonus but give him a lower allocation of stock options and maybe none in stock
grants. On the other hand, someone else seems to have a lot of potential, but if
she didn’t do as good a job in one year as I would have liked, I’m going to
give her less cash, but I’m going to continue to motivate her with options because
I think she’s an asset to the company’s future.
We do all we can to reward
people for doing their best. That’s how we got a performance culture. Here’ s
one example: in 2002 many companies will be handing out small bonuses or none
at all, given the state of the economy. Our aerospace component was hit harder
than most by the terrorist attacks of September 11, and very few of its
businesses will match the previous year’s results. But we’re measuring the
people on how well they perform against their competitors in this kind of
environment. If they do better, they will receive bonuses.
Linking rewards to performance
is necessary to creating an execution culture, but it’s not enough by itself. All
too commonly a tough new leader, striving for a performance culture, will set
rigorous performance standards and then stand back to watch the play unfold.
“Sink or swim” is the message. Lots of people proceed to sink, and the
organization may sink too, as Sunbeam did with Al Dunlap.
Other leaders design
rewards for new behaviors of execution but implement them brutally. They don’t
take the important step of helping people to master the new required behaviors.
They don’t coach. They don’t teach people to break a major concept down into
smaller critical tasks that can be executed in the short term, which is difficult
for some people. They don’t conduct the dialogues that surface realities, teach
people how to think, or bring issues to closure.
The missing part of the
equation lies in what we call the social software of execution.
THE SOCIAL SOF TWARE OF EXECUTION
RAM: How many
meetings have you attended where everyone seemed to agree at the end about what
actions would be taken but nothing much actually happened as a result? These
are the meetings where there’s no robust
debate and therefore nobody
states their misgivings. Instead, they simply let the project they didn’t like
die a quiet death over time.
In my career as an adviser
to large organizations and their leaders, I have witnessed many occasions even
at the highest levels when silent lies and a lack of closure lead to false
decisions. They are “false” because they eventually get undone by unspoken
factors and inaction. These instances of indecision share a family resemblance
a misfire in the personal interactions that are supposed to produce results.
The people charged with reaching a decision and acting on it fail to connect
and engage with one another. Intimidated by the group dynamics of hierarchy and
constrained by formality and lack of trust, they speak their lines woodenly and
without conviction. Lacking emotional commitment, the people who must carry out
the plan don’t act decisively.
These faulty interactions
rarely occur in isolation. Farmore often, they’re typical of the way large and
small decisions are made or not made throughout a company. The inability to act
decisively which translates into an inability to execute is rooted in the
corporate culture and seems to employees to be impervious to change.
The key word here is “seems,”
because, in fact, leaders create a culture of indecisiveness, and leaders can
break it.
The primary instrument at
their disposal is the social software of the organization.Like a computer, a
corporation has both hardware and software. We call the software of the
corporation “social software” because any organization of two or more human
beings is a social system. includes such things as organizational structure,
design of rewards, compensation and sanctions, design of financial reports and
their flow. Communication systems are part of the hardware. So is a
hierarchical distribution of power, where such things as assignment of tasks
and budget-level approvals are visible, hardwired, and formal. The social
software includes the values, beliefs, and norms of behavior, along with
everything else that isn’t hardware. Like the computer’s software, it’s what
brings the corporate hardware to life as a functioning system. Structure
divides an organization into units designed to
perform certain jobs. The
design of structure is obviously important, but it is the software that
integrates the organization into a unified, synchronized whole. Hardware and
software in combination create the social relationships,
the norms of behavior, the power
relationships, flows of information, and flows of decisions.
For example, basic reward
systems are hardware because they’re quantitative. You make your numbers, the
system rewards you according to a formula, and congratulations, here’s the check.
But if you want to reward other behaviors your record with Six Sigma or in improving
the diversity of your leadership team or your collaboration with peers software
enters the picture, because it defines the norms of behavior being rewarded.
Leaders who create disproportionate
awards for high performers and high-potential people are creating social software
that drives behaviors: people work harder at differentiating themselves.
_ _ _
A key component of
software is what we call Social Operating Mechanisms. These are formal or informal
meetings, presentations, even memos or e-mail exchanges—anywhere that dialogue
takes place. Two things make them operating mechanisms, not just meetings. First,
they’re integrative, cutting across the organization and breaking barriers
among units, functions, disciplines, work processes, and hierarchies and
between the organization and the external environment as well.
Social Operating Mechanisms
create new information flows and new working relationships. They let people who
normally don’t have much contact with one another
exchange views, share information
and ideas, and learn to understand their company as a whole. They achieve
transparency and simultaneous action.
Second, Social Operating
Mechanisms are where the beliefs and behaviors of the social software are
practiced consistently and relentlessly. They spread the leaders’ beliefs,
behaviors, and mode of dialogue throughout the organization. Other leaders
learn to bring these beliefs and behaviors to the lower-level formal and
informal meetings and interactions they conduct, including coaching and
feedback. They become their Social Operating Mechanisms. And
so on down the line.
Linked to one another and
to the measurement and reward systems, the Social Operating Mechanisms
collectively become what we call the Social Operating System of the
corporation. As such, they drive its culture. In the people, strategy, and
operations processes, for example, the review sessions that draw the company’s
top leaders together are the main Social Operating Mechanisms; the processes
combined make up the Social Operating System.
GE’s highly developed Social
Operating System is central to the company’s success. Its main Social Operating
Mechanisms include the Corporate Executive Council (CEC), which meets quarterly;
Session C, the annual leadership and organizational reviews; S-1 and S-2, the
strategy and operating reviews; and Boca, an annual meeting in Boca Raton,
Florida, where operating managers meet to plan the coming year’s initiatives
and re-launch current initiatives.
At CEC meetings, which run
two and a half days, GE’s roughly thirty-five top leaders review all aspects of
their businesses and the external environment, identify the company’s greatest opportunities
and problems, and share best practices. The CEO also uses the forum to observe
how his leaders think and how they work together, and to coach them.
A Session C meeting is an
intense eight-to-ten-hour gathering where the CEO and head of HR meet with the business
leaders and top HR executives of each business unit. They review the unit’s prospective
talent pool and its organizational priorities. Does GE have the right people in
the right jobs to execute its strategies? Who needs to be promoted or rewarded,
who needs help with development, who can’t handle the job? The CEO follows up
each session with a handwritten note reviewing the substance of the dialogue
and the action items. Through this mechanism, picking and evaluating people has
become a core competence at GE.
The S-1 strategy meeting
takes place toward the end of the second quarter. Here the CEO, CFO, and
members of the office of the CEO meet with each unit head and his or her team
to discuss the strategy for the next three years, including the initiatives
agreed upon by the CEC and the fit between the strategy and the people in
charge of executing it. As with the Session C meetings, the CEO follows up with
a letter to each leader outlining the action items they’ve agreed upon.
The S-2 meeting, held in
November, is the operating plan meeting that focuses more on the coming twelve
to fifteen months, linking strategy to operational priorities and resource
allocation.
In between, other Social
Operating Mechanisms are at work. In April GE surveys some 11,000 employees
online for feedback on how well the initiatives are taking hold throughout the
organization. In October the 150 top corporate officers meet at the Crotonville
Learning Center to review the progress of the initiatives, get operating plans rolling
for the coming year, and participate in executive development courses. And at
the December CEC meeting, among other things, executives set the agenda for January’s
Boca meeting.
This system of linked
Social Operating Mechanisms is how GE’s leaders unite a company of businesses
so diverse that people have sometimes called it a conglomerate. The Social
Operating System explicitly ties GE’s overall strategy to the performance of
each unit, including its leadership development and operating plans. The
dialogue, a norm of behavior created by former CEO Jack Welch, is honest and
reality-based. Feedback is candid. And the CEO is present and actively
participating throughout, at every meeting. It’s an operating system for
execution.
The contemporary corporation
is complex, and each of its many parts is constantly in motion: moving
structures, moving ideas, moving decisions, and moving people all responding to
a moving business environment. The Social
Operating System is the
constant. More than anything else, it provides the consistent framework that’s
needed to create common ways of thinking, behaving, and doing.
Over time it transcends
even deeply rooted local cultures.
LARRY: Our
Social Operating System at Honeywell isn’t as elaborate as GE’s, but it serves
the same purposes. All of our behaviors are evident in the people process, the strategy
process, and the operations process and at two management meetings where more
than a hundred of our leaders are in attendance. These meetings are where
people practice those behaviors most intensely. From there it cascades down
into the organization.
One of the most important
things people take with them from the processes is the understanding of how to work
together in constructive debate. No one person has all the ideas or all the answers.
If we have a problem in one place, people will respond by getting together and finding
a solution, not by sitting around and moaning that they don’t have a solution
or deciding to engage a consultant. We don’t expect people to know everything,
but we do expect people to get the best answers they can get, and they get them
by working with other people.
Practicing such
constructive debates over time builds confidence in people to tackle unfamiliar
issues as they arise.
THE IMPORTANCE OF ROBUST DIALOGUE
You cannot have an
execution culture without robust dialogue one that brings reality to the
surface through openness, candor, and informality. Robust dialogue makes an
organization effective in gathering information, understanding the information,
and reshaping it to produce decisions. It fosters creativity most innovations and
inventions are incubated through robust dialogue.
Ultimately, it creates
more competitive advantage and shareholder value.
Robust dialogue starts
when people go in with open minds. They’re not trapped by preconceptions or
armed with a private agenda. They want to hear new information and choose the
best alternatives, so they listen to all sides of the debate and make their own
contributions.
When people speak candidly,
they express their real opinions, not those that will please the power players
or maintain harmony. Indeed, harmony sought by many leaders who wish to offend
no one can be the enemy of truth. It can squelch critical thinking and drive
decision making underground. When harmony prevails, here’s how things often get
settled: after the key players leave the session, they quietly veto decisions
they didn’t like but didn’t debate on the spot. A good motto to observe is “Truth
over harmony.” Candor helps wipe out the silent lies and pocket vetoes, and it
prevents the stalled initiatives
and rework that drain
energy.
Informality is critical to
candor. It was one of Jack Welch’s bywords. Formality suppresses dialogue;
informality encourages it. Formal conversations and presentations leave little
room for debate. They suggest that everything is scripted and predetermined.
Informal dialogue is open. It invites questions, encouraging spontaneity and
critical thinking. At a meeting in a formal, hierarchical setting, a powerful
player can get away with killing a good idea. But informality encourages people
to test their thinking, to experiment, and to cross-check. It enables them to
take risks among colleagues, bosses, and
subordinates. Informality gets
the truth out. It surfaces out-of-the-box ideas the ideas that may seem absurd
at first hearing but that create breakthroughs.
Finally, robust dialogue
ends with closure. At the end of the meeting, people agree about what each
person has to do and when. They’ve committed to it in an open forum; they are
accountable for the outcomes.
The reason most companies
don’t face reality very well is that their dialogues are ineffective. And it
shows in their results. Think about the meetings you’ve attended those that were
a hopeless waste of time and those that produced energy and great results. What
was the difference? It was not the agenda, not whether the meeting started on time
or how disciplined it was, and certainly not the formal presentations. No, the
difference was in the quality of
the dialogue.
In the typical corporate
meeting a business review, for example the dialogue is constrained and
politicized. Some people want to shade and soften what they say to avoid a
confrontation. Others need to beat those they’re talking to into submission. In
groups that contain both types of people (which is the case in many meetings),
dialogue becomes a combat sport for the killers and a
humiliation or bore for
the passives. Little reality gets on the table, and the meeting doesn’t move
the issues forward much.
Now think of a meeting
that produced great results that got to the realities and ended with a plan for
results. How did it happen?
Dialogue alters the psychology
of a group. It can either expand a group’s capacity or shrink it. It can be
energizing or energy-draining. It can create self-confidence and optimism, or
it can produce pessimism. It can create unity, or it can create bitter
factions. Robust dialogue brings out reality, even when that reality makes
people uncomfortable, because it has purpose and meaning. It is open, tough,
focused, and informal.
The aim is to invite
multiple viewpoints, see the pros and cons of each one, and try honestly and
candidly to construct new viewpoints. This is the dynamic that stimulates new
questions, new ideas, and new insights rather than wasting energy on defending
the old order.
How do you get people to
practice robust dialogue when they’re used to the games and evasions of
classical corporate dialogue? It starts at the top, with the dialogues of the
organization’s leader. If he or she is practicing robust dialogue, others will
take the cue. Some leaders may be short on the emotional fortitude required to
invite disagreement without getting defensive. Others may need to learn some
specific skills to help people challenge and debate constructively. These
people should be able to get help.
But the key is that people
act their way to thinking because they’re driven for results. If you reward for
performance, the interest in performance will be sufficiently deep to sponsor a
dialogue. Everybody needs to get the best nswer, and that means everybody must
be candid in their exchanges—no one person has all the ideas. If someone says
something you disagree with and you
rudely tell him he’s full
of hot air, a lot of other people aren’t going to speak out next time. If
instead you say, “Okay, let’s talk about that. Let’s listen to everybody and
then make our choice,” you’ll get much better responses.
LEADERS GET THE BEHAVIOR THEY EXHIBIT AND TOLERATE
Once you understand social
software, it becomes plain that no leader who’s disengaged from the daily life
of the business can possibly change or sustain its culture. As Dick Brown puts
it, “The culture of a company is the behavior of its leaders. Leaders get the
behavior they exhibit and tolerate. You change the culture of a company by
changing the behavior of its leaders. You measure the change I culture by
measuring the change in the personal behavior of its leaders and the
performance of the business.” To build an execution organization, the leader
has to be present to create and reinforce the social software with the desired
behaviors and the robust dialogue. She has to practice them and drill them
relentlessly in the social operating
mechanisms.
For example, some leaders
use regular conference calls as an operating mechanism to drive change in the
culture by forcing new candor and realism into the dialogues and decision
making of the company’s top leaders. The calls introduce accountability and
follow-through. The leader’s own behavior, including her communications with
people at all levels, modeled and reinforced the beliefs and behavior her
people needed to learn.
The dialogue the leader conducts
in these calls develops the total company picture for all to see. Everyone has come
prepared to explain what will be done in the coming month to deliver on commitments
if results are lagging expectations. By discussing the entire business and
having a focus on the external environment, everyone participating knows more
about overall trends, competition, issues, and roadblocks. If they are doing
their job to help build a culture of execution, this information will cascade
through the company.
Can you create an execution
culture in your own business if it’s part of a larger organization that doesn’t
have one? If you try, will you become a social outcast? The odds are that you
can do it especially once you start showing
profit and revenue growth.
LARRY: You as a
leader don’t want to send your people out on hara-kiri missions, but I do think
you can do it even if it’s not part of a major corporate thrust. I always ran
my reviews with the idea that you want to get the truth out. When I became a GE
traveling auditor in the late 1960s, I visited GE locations all over the world,
and I noticed a lot of different styles of managers. Watching the successful
ones and the unsuccessful ones confirmed my feeling that the more you get
involved and the better you hash the issues out on the table, the better the
decisions you will make in terms of their resolution. These lessons stayed with
me for the rest of my career.
When I became a GE Capital
unit manager in 1978, I was following these practices. But in that year Jack
Welch came in as consumer sector executive, and he intensified this process
dramatically. It was more penetrating and it was more action-oriented, more
what-are you going to do about-it-oriented. He took what I had known and
elevated it in terms of intensity. He gave the people process a depth and ardor
and intensity that I hadn’t seen before. The
ore experience I got as a leader, the more I brought that experience to
the processes. In the people process, for example, when I started, my first
thought was always to see how good a person was in a job. After all, that’s
what made the business run. As time went on, I still talked about that, but I
also kept thinking, What is the growth
potential of this person? I began to ask a lot more questions and get dialogue
going on long-range potential.
I also got more people
involved in the discussion, because when you expand the audience, you know
more. We used to have too many one-on-ones, because we didn’t want something
that was said candidly about a person to get out and be harmful. But we found a
way to solve that problem. We acknowledged that the person being discussed was
going to hear everything that was said in that room anyway, and we’d agree that
we would be candid but professional. The conversations were still forthright,
but they weren’t damaging. We took care not to say anything about the person
that you wouldn’t say to his or her face.
I was born hands-on and
have always been excited about my business. I’m enthusiastic, intrigued, and
curious about it. And that’s what determines whether you can make these changes
in your organization. If you find them troublesome, if you find them trying,
they won’t work. You’ve got to like the process, otherwise it won’ t work.
Success in executing a
cultural change depends first and foremost on having the right people. In the
next chapter we turn to the most important job leaders do: selecting and
evaluating people.
No comments:
Post a Comment