Wednesday, September 1, 2010

Culture Change--Step 1

A lot of improvement efforts--like Lean, Six Sigma--fail in organizations because there's a lack of two key characteristics: a culture that will accept people using those tools and a wholistic, systemic look at the dynamics of achieving results.

The first is related to whether accountability is high or low, whether values are adopted by all layers of the organization, and the basic courtesies are practiced (respect, honesty, integrity, etc.). A relationship with a boss was ruined when I held him accountable in the simple things. I'll give you an example shortly. We need to practice integrity and respect, which translates into "walk the talk". We say we respect each other, and everyone's time is important. However, in a former corporate life, a boss perpetually showed up late for meetings. It didn't matter if he scheduled them or someone else; he was five to fifteen minutes late. He expected us all to wait till he arrived before the meeting could start. Obviously, the meetings didn't end on time, nor were we on time to any meetings starting immediately after this particular one, nor was the conference room available for the next group to meet. The message was clear: he and his time were far more important than any 3-12 staff people or anyone else in the organization. Based on the 'algebra of meetings', he was worth nearly one-fourth of the whole company. Needless to say, we felt like serfs, poor peasants working for 'my liege'.

He ran staff meetings without an agenda, and merely went around the table. Invariably, we wasted a lot of time (8 people's time this time) on Jane's trivial matter, and when we finally got around to a discussion about Sally's strategic initiative, we had five minutes left. Somehow the business was successful.

I started holding him accountable for being on time. We started meetings without him. We had an agenda, which was reviewed for issues that needed a long time for discussion, could be briefly discussed and could be postponed for a discussion the next week if we ran out of time.

To the boss, this looked like a power grab. To the other staff members and to the rest of the organization, this showed respect for their time and issues. The boss was no longer the reason for the organization's existence; he was no longer the 'center of our universe'. The organization's well-being should be the raison d'etre (the core purpose for existence) for the boss.

Small change: huge cultural benefit. What's happening in your organization that communicates cultural values that hinder success?

There are also corporate values, like rewarding for commitment or rewarding for results. Are people given merit pay or bonuses just for showing up, or because they actually facilitated the success of the customers, the employees or the company?

The second key element for transforming an organization is understanding that all things are connected. It's impossible to affect an improvement in one part of the organization--processes, development, etc.--without affecting another functional area or process. If you map out how business, manufacturing inputs and service areas are connected in your organization, it'll look like a giant circuit board or a traffic control nightmare. In a short example, improving order entry time could positively/negatively affect the reaction time and quality of the effort the fulfillment departments have. It's like squeezing a balloon in one spot; it will bulge out somewhere else. Costs, inventory, delivery, service and technology could be affected if one team isolates an improvement opportunity. Many efforts, like Lean and Six Sigma, focus on micro-optimization. Macro-optimization is needed for lasting effects. Perhaps it's not good to improve order entry time in the wholistic review of the company's system.

The only way to make sure macro-optimization occurs: make sure the culture is ready and there's plenty of respect, honesty and integrity to go around.

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