Jay Lorsch and Emily McTague’s recent HBR article, “Culture is not the Culprit,” starts out with, “When organizations are in crisis, it’s usually because the business is broken.” We applaud their focus on “fixing the business” and thank them for providing four powerful examples of the critical importance of culture change to successful business transformation.
But a superficial reading of this article could be interpreted as saying, “Don’t worry about the culture, just fix the business and the rest will take care of itself.” After twenty years working with “culture change” projects, I’d be a little careful about positioning culture as an automatic result of fixing the business – it’s probably more helpful to recognize culture as an essential ingredient of a learning process that is necessary to make sure that those business fixes stick.
Culture can still eat strategy for breakfast, lunch, or dinner!
In my experience, business transformations are quite a bit easier for top executives to start than they are for their organizations to finish. Many times, all eyes are on “culture as the culprit” because culture is often the “glue” that helps preserve the mindset, behaviors, and operating systems of the past, even when the leaders are clear about the future that they are trying to create. Culture represents the accumulated wisdom of the past, and that wisdom is hard to replace overnight, even when it needs to be. Just because we can click on a button to update the operating system on our phone doesn’t mean that we can click on a button to update the operating system in our organizations. Fixing the business and fixing the organization are both necessary to keep the business “fixed.”
Of course it depends a lot on how you define “culture.” There’s no question that there are a lot “culture change” projects featuring staff-led, big picture views of new core values that avoid a critical assessment of what is working and what is not from the business point of view. Some may think that cheery posters on the wall will improve profit margins, but in our experience, those projects never gain much traction.
Here’s what counts
We’ve always found it most helpful to define culture in terms of the four factors that the research shows are most likely to influence the performance of the business: Sense of mission, degree of adaptability, level of involvement, and a foundation of consistency. The HBR article actually couldn’t have done much better than it did at highlighting these key elements and giving us some great new case studies to illustrate the importance of the four factors in our model.
At Ecolab, Doug Baker “pushed decisions down to the front line to strengthen customer relationships.” That’s a great example of adaptability and involvement. Richard Anderson describes how Delta raised the level of involvement by investing in building strong relationships with their employees after the Northwest acquisition. At Ford, it took an outsider, Alan Mulally, to recognize that fierce internal competition made Ford act like a “bunch of separate companies.” Creating consistency and collaboration throughout “One Ford” was an essential part of fixing the business. Finally, Dan Vasella of Novartis created a clear sense of mission from the top – to discover, develop, and bring to patients better medicines again and again.
All of these CEOs led the way by keeping their attention squarely focused on fixing the business. And all of them recognized the strategic importance of transforming their organization’s cultures to make sure that their businesses stayed fixed!