Culture Change at GM: Declaring it Doesn’t Make it So

October 9, 2009

The NYT reported that the board of GM wanted the culture of the organization to change:

In the interim, Mr. Henderson stressed that G.M.’s new board was pushing management to speed up decisions on new products and install a culture devoted to pleasing customers.

I’m not optimistic. The first red flag is the title of the article, G.M. Is Adapting to a New Culture, Chief Says.  In my experience, culture doesn’t change upon decree from the top.  Culture exists because of years of reinforcing norms and behaviors.  It exists because smart people constantly pick up on how status is gained and which behaviors are valued in practice (not in the introduction to the annual report). Changing culture requires unraveling and replacing that normative system in a comprehensive way.  The analogy that always comes to mind is clearing a patch of land to be farmed. You can’t just cut down the trees and declare victory. You have to get your hands dirty beneath the surface, digging up roots and turning over the soil.

In other words, you have to address the underlying conditions that allowed certain behaviors to thrive in the organization. Where to begin?  I suggest starting with my favorite question, now familiar to our readers:  why would reasonable, well-intentioned people do what they’re doing?  Once you can answer this question with an open heart, once you can identify the organizational drivers of the actions and choices you want to change, then you can begin to influence them.

Maybe the article got it wrong, but if it’s even close to correct, the 90 days allocated to this activity at GM will be wildly insufficient.

The Employees You’re Slamming Are Behaving Rationally

May 11, 2009

It is difficult to find something written about change that doesn’t talk about how hard it is. My observation couldn’t be more different. I find that change happens in an instant — deciding what to change and finding the right levers for changing it, those are the complicated parts.

I’ll use culture as an example. I was recently working with some executives who were lamenting that their employees weren’t acting with a sense of urgency. And no matter how many times the senior management team implored employees to move faster, the needle on urgency didn’t move. The team concluded that employees just didn’t believe them that urgency really mattered.

They didn’t, for perfectly good reasons. When I asked the team to explain their employees’ behavior, they attributed all kinds of fundamental character flaws to these individuals they had carefully selected and trained — lazy, uncommitted, distracted, risk averse. I let them get all of that out of their system. And then I asked why a smart, well-intentioned employee would act without urgency in their organization.

It took a few tries to break the habit of judging and psychoanalyzing their employees, but eventually we got somewhere. It turns out that when employees made mistakes in this particular company, they were often pounced on by the most influential of the senior team. In some cases, it bordered on ridicule, a public hearing on someone’s judgment and intellect. Once we uncovered this pattern, we were 95% of the way towards change.

These employees were behaving rationally according to the dominant, if informal performance management system. Senior management could not have been clearer – only present polished work that you’re damn sure is right.  It was no surprise that few people revealed any intermediate progress. It made perfect sense to wait until every i was dotted, every t crossed, before making any sudden movements. That behavior looked like the absence of urgency. And senior managers’ actions were at the root of it.

The solution? It wasn’t to keep clarifying the importance of urgency. This team had to stop punishing small mistakes, particularly mistakes that were a consequence of working faster. And they had to start celebrating speed, with public acknowledgment that moving faster requires new behaviors like sharing unpolished ideas and building on each other’s work.

The lesson? Before setting out to change something, figure out why people might be behaving rationally in the culture and systems you’ve designed (or permitted). The least likely, least useful explanation is that good people have suddenly gone bad. The most likely explanation is that you’ve created an environment that is setting them up to fail. Now change your behaviors that are contributing to that environment. I promise it won’t take long.