An Excerpt from You're in Charge — Now What?
Many leaders assume that, because they’ve been successful before, they’ll repeat that success in their new organization. But if a cultural change is required, an entirely new leadership style may be necessary and success might not be a given.
Assessing culture
The words companies use to describe their cultures usually sound reassuring — customer focus, excellence, teamwork, shareholder value — but they don’t necessarily translate into real behavior for businesses.
The real issues surrounding culture are: How people actually go about their work, how decisions are made, who gets promoted, how employees interact and how a company boosts motivation.
What makes it tricky for a new CEO, especially an outsider, is that the important rules of culture are unwritten. This means any attempt to understand a culture revolves around listening to how the people on the inside describe the company.
New leaders must be able to identify the covert signals and invisible knowledge networks that are central to any organization. These conventions, unwritten protocols and unspoken taboos are encapsulated in the question, “How do things work around here?”
Any move into a new position or new company necessitates a crash course in its culture. Most new leaders know they must explore the organizational terrain, but it’s tough to delve deeply enough to see how a company really works or how different people will react to different leadership actions.
So how do you go about learning what you need to know? Start by conducting a cultural assessment that will become a component of your strategic agenda. Solicit views and opinions from people who know the organization: board members, management team, employees, customers, suppliers, the financial community, strategic partners, regulatory communities and the media.
Issues to explore include: how the culture affects work, what the company stands for, how it differs from its competitors, what are the common traits among its successful people, what is likely to result in failure, and who are the most respected people within the organization. As you do your research, important patterns will quickly emerge.
Finding the culture clues
Language is an important indication of a company’s culture. The way people in an organization speak to each other — and those outside the company — gives a lot away.
Words, however, aren’t the only indicators: as mundane as it sounds, so is how people dress. In one legendary example, Lou Gerstner made his intentions clear without saying a word when he arrived at IBM on his first day as CEO — he wore the sole blue shirt in a sea of starched white, long considered the corporate IBM uniform. His shirt sent a clear signal that change was on the way.
Company canteens and corridors, the layout of the office floor, the art on the walls and the demeanor of the people — they all send clues about a company’s culture. Open floorplans, for example, indicate that interaction between staff is encouraged, while closed doors allude to a rigid hierarchy.
It may also help to set up an integration session where your new team members introduce themselves and discuss their work styles, air any concerns and work with the new leader to find general common ground.
The most successful assimilations between new leader and company emerge from a process of compromise on both sides. Even if the culture needs changing, instituting a new order immediately is likely to breed resentment and almost guarantees failure if you don’t get buy-in.
Nurturing culture change
The work of transforming a culture extends well beyond your first 100 days, and it could take years. The critical point in the early days is to be sensitive to the issue and to make an effective cultural assessment, thereby laying the groundwork for long-term change.
But being a change leader can be perilous, and CEOs who act too quickly can pay the price.
There are ways to minimize the risk, though: familiarize yourself with the subtleties of the culture, understand the power base, recognize that a mandate from above doesn’t ensure a mandate from below and try not to change everything in the first 100 days.
“Changing the attitude of hundreds of thousands of people is very, very hard to accomplish — you can’t mandate it, and you can’t engineer it,” Gerstner has said. “What you can do is create the conditions for transformation. Provide incentives and define the marketplace realities and goals. But at some point you have to trust. In the end, management doesn’t change culture. Management invites the workforce itself to change the culture.”
You can also make the invitation to change more compelling by taking some concrete steps: provide new measures of success and new operating processes, make changes to your management team, create new expectations in and of the business, identify change leaders and lead by example.
Conclusion
Taking on and leading cultural change is one of a new leader’s toughest — and most delicate — challenges. Too much change can break the culture and destroy the change leader. There will be some resistance, even when change appears to be welcomed. It’s important to deal sympathetically and dispassionately with that resistance.
Cultivate change by working to understand the organization’s culture. Listen and observe it in action. Get input and ask questions. Make your first moves count, but ensure that you pace your change. And continually step back to assess the tolerance of the organization to that change.