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What Can Organization Leaders Do to Create and Manage Culture Change?

July 22, 2014
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QUESTION: What are the two (or three or five or seven) most important things organization leaders can do to effectively create and manage culture change?

ANSWER: 1. The most important thing senior leaders must do is lead from the front. The CEO, with the board of directors’ support, must formally announce the strategy for excellence to all levels and why culture change will be critical to the company’s ability to sustain long-term.

If the top leaders don’t believe that and/or aren’t prepared to relentlessly lead that way for the rest of their careers, then they shouldn’t deceive their employees by pretending to believe. It’s a travesty how many U.S. companies have started a journey of continuous improvement and only 2%-3% of those are still on the journey after 10 years.

No wonder so many workforces are cynical when the next bold leader comes along and says, “Let’s do lean.” (Hourly worker: “Oh great. Here we go again with another flavor of the month. I can probably outlast this phony just like I did the last two.”)

One of the leading reasons these kinds of initiatives fail is that senior leaders announce change and then don’t change anything about themselves and how they think and how they lead.

All leaders are in a fish-bowl with everyone in the organization looking up at them. If employees see definite behavior changes, e.g. no more “death by 1,000 initiatives”; no more “do as I say not as I do”; and more accountability for the new agenda, i.e. malcontents start disappearing; persistence to eliminate root cause instead of apply band aids to the business’ problems, the priority for excellence never changes, etc. then the company has a chance to really change and get a lot better.

Ultimately, these kinds of changes will unleash the brainpower of the masses and the culture change that is necessary will begin to gain momentum. (See Ken Blanchard’s book, Leading at a Higher Level, Chapter 10, for more insight on this topic and his list of the 15 leading reasons why change initiatives fail.)

2. All leaders must constantly communicate the vision for excellence, the process for getting there and the sense of urgency necessary by all. Absent a compelling business case for change, support will be episodic. It has to be real and each person must see the need for change and understand their role in it.

Leadership must understand that every single communication by any medium is an opportunity to reinforce this consistent message over and over and over again. The board of directors’ support is intended to insure the longevity of the commitment regardless of whoever succeeds the current CEO in the future.

It’s not a flavor of the month. It’s the new way the company will be run. Forever. No excuses!

Elevate Leadership Expections

3. The CEO must elevate expectations of all leadership. Share and drive the vision throughout the business. Cascade it through the organization by each functional leader, each business leader, each site manager, etc. down to the lowest level of the structure of organization.

Formal communications plans should commit this critical function to standard work. Even if it’s only an annual video produced for viewing at all global locations, it’s important to show that the message starts at the top.

Plant managers, on the other hand, should be having monthly employee updates live and in person.

4. Eliminate the non-believers, i.e. those unwilling or unable to change the way they think and work. This should be completed within a 1-2 to 18-month time frame from the C-level to the  shop/office floor. (See the Jim Collins’ book Good to Great for great insight on this subject.)

Taking swift action sends a powerful signal to the rest of the employees at all levels that leadership is committed this time around and are “pulling the weeds” that have likely been resisting leadership in other ways over a period of time.

 Everyone working in those areas know who these people are and have been wondering why their management hasn’t stepped up to it before. The typical reaction is: “It’s about time!”

This is the beginning of establishing new trust/credibility with the workforce. Leaders must be careful not to squander this opportunity!

5. To think and work differently requires a different mindset and toolset. Leadership must provide the resources for a reorientation of the entire workforce and a focused education and training program teaching the new tools and how to use them.

Education and training costs must be viewed as an investment not as an expense that reduces earnings. Absent this investment, there is no chance to achieve legitimate and long-lasting change.

6. Everyone in a leadership position must be trained how to think and behave differently. For example, how to prevent problems rather than how to react to preventable problems, i.e. re-training to becoming proactive instead of being reactive.

They should also be trained on “Lean 101” so they have a basic understanding of the thinking with regard to eradicating waste, improving process flow and enough understanding of the toolset that they can intelligently participate in discussions and provide support and guidance as required.

Obviously, the level of detail of such training increases the farther down the organization structure you go.

7. There is no better tool to keep the entire company, regardless of function, focused on the important process improvements in the business than this: Create aligned metrics top to bottom.

The language of the message should be modified to promote understanding, but there must be alignment. While C-level executives might be discussing operating margin improvements, the folks on the shop floor need to have their contribution to that expressed in their terms.

For example, if the utilization of a critical constraint work center must be 85% to create the incremental sales margin expected, then set the metric accordingly. Notionally, adding up all of these sub-components for improving margin will equal the total corporate commitment for improvement. Simplistic example but you get the picture.

It’s always tough to reduce such important work to a list of “two or three or five or seven” things, but the common theme here clearly is that it is ALWAYS about leadership. If you have 30 years left to work, will you commit to relentlessly pursuing excellence until your last day? That’s what great leaders of transformative excellence initiatives do.

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