Typically, changing business policy and practice comes from the threat of disruption from either a new start-up or a digital giant like Google that provides the catalyst for change.
Lately the word culture has been bouncing round the c-suite. “It’s not enough to change processes and give presentations. We need to change our culture.”
Culture is like a meme that encapsulates all the things that should be changed. Unfortunately, without a clear directive or steps to follow, culture is a hollow concept.
Culture change is not a software update
One of the most common misconceptions around culture change is that it’s about changing the way people think. The underlying belief seems to be that once people think differently they will act differently.
Businesses locked into this approach try to initiate cultural change by increasing the training budget, going on a roadshow with inspirational power-points, and delivering motivational speeches from the CEO on how the company now “embraces the start-up spirit”.
Or they might decide to allocate funds to “creating internal start-ups.” This is called the “software update” approach to cultural change. Problem solved, update complete. Or is it?
There are two problems with this approach.
First, introducing a new culture isn’t about simply downloading a software update. You don’t expect updating your device to radically change your own behaviour.
Similarly, when it comes to culture change, the role of business leaders isn’t just to manage change around them; they need to lead by example and be the ones to change first. People in large companies are all too familiar with the leaders talking the talk leaving others to walk the walk.
Second, culture isn’t just about thinking, it’s about actions: the way people behave and talk and the concrete steps they take to turn ideas into results.
New thoughts, values, and attitudes don’t create a culture unless people embrace them and start acting on them. If nothing is done to help people act differently, expecting new thinking to change anything is futile.
How to start the journey towards culture change
As a result of working with companies including engine manufacturing company Wärtsilä on digital transformation, here are five key steps to help kick-start company culture change:
1. Be the change you want to see
The single most important action of any leader is to model the behaviours they wish their organisation to embrace. When it comes to changing culture, this means being prepared to constantly experiment, reflect and improve.
John Shook, who helped introduce Toyota’s lean management to the US, is a good example of the style of leader we are talking about.
2. Start small
Innovation projects are future facing which makes them a perfect spearhead for cultural change. Start by hand picking small innovation initiatives you want to work on: small teams tasked with strategic projects provide a very effective first step towards a major transformation. These could range from designing a new online storefront to making a minor change to the logistics process.
The alpha version of Gov.UK, the domain for all UK central government services, was built by 14 people, took 12 weeks and cost £261,000. Its introduction saved the Government Digital Service £42million from 2012-13 and the agile approach used has been adopted by other government departments.
As the Gov.UK example shows, it’s important for the projects to be able to deliver concrete results that have a strategic significance so that the wider company can see tangible benefits from embracing culture change.
3. Embrace new lean ways of working
Once you have chosen the innovation initiatives, experiment with new ways of working. Conventional R&D is being successfully challenged by a combination of design and lean start-up thinking and agile working which is helping businesses such as Barclays increase productivity, reduce code complexity and deliver greater team happiness.
A growing trend within corporate innovation is to establish internal start-ups or a separate innovation business unit to road test these lean methodologies and tools.
For example, Capital One recently launched new fintech start-up accelerator, Capital One Growth Labs and plans to hire 200 new technology specialists, in a bid to take advantage of digital disruption in the financial services sector.
“Lean” isn’t an “off the shelf” solution so it’s important to try out this new approach while creating meaningful outcomes for the business. Experimenting with lean ways of working has two important effects: first, the innovation initiatives themselves become more radically customer centric and business focused.
Second, the initiatives act as flagships for the new company culture: they are carried out by teams who react and adapt to customer insights, and importantly, who can deliver tangible results fast.
4. Select the right people
The team you choose to work on the innovation projects is key as those people will become the ambassadors for a bigger cultural change in the organisation.
As the Government Digital Service discovered when developing Gov.UK, it’s important to select people from multidisciplinary teams, who collectively have the skills to help realise the innovation you have planned.
They also need to be positive, team players who are motivated to embrace better ways of doing things.
The purpose of this team is to bump into the cultural glass walls that have hindered past initiatives and to make them visible. The team’s first-hand experience of how the new thinking applies to your company means they can introduce lean ways of working to others.
5. Create the right environment
When it comes to innovation projects, leaders need to create an environment where the people taking part dare to try out new tools, thinking, and ways of working.
This includes supplying guidance, tools and innovation frameworks for people to use. Most importantly, it means providing a mandate for the project team to really experiment with new ways of working and new behaviour, including permission to make mistakes and even to fail.
Ultimately, leaders who apply lean values to their vision, words, and actions, who are collaborative, experimental and transparent about their mistakes, are more likely to succeed in changing their company culture than those who don’t.
Sourced by Barry O’Reilly, co-author of Lean Enterprise: How High Performance Organisations Innovate at Scale and Professor Risto Sarvas, company culture engineer at digital innovation Futurice