Changing an organization’s culture isn’t easy, and getting different leaders, departments and managers all on the same page can be like herding cats. But a good starting point is to examine the current culture to identify which elements should be retained — and which need to change.
Let’s use the example of an organization Arcus Consulting Group recently dealt with that wanted to break down silos within the company. There are four key strategic imperatives that helped accomplish this:
Connected strategy: A business and HR strategy that is more connected with the market environment and reflective of stakeholder and customer needs.
Deeper engagement: A more meaningful context and deeper connection between employees and the strategy.
Performance standards: Clearer performance and pay equity standards and an augmented capacity for the organization to meet these standards consistently.
Team orientation: A greater degree of team orientation and integration between various functions within the organization.
The approach involved four key steps:
Understanding internal social systems to break down silos
Arcus deployed a best practice model of a culture that correlates strongly with superior organizational performance, and the organization was benchmarked against a good-better-best hierarchy of metrics from an existing database. The results were used to identify gaps in the culture and to determine where sub-cultures existed.
Fifteen per cent of the information was acquired in formal (management to staff) settings, while 85 per cent of the information was acquired in informal (people to people) settings.
To validate some of the hypotheses from the benchmark analysis, market research was conducted with stakeholders, board members, employees, HR managers and the workforce in one-on-one interviews and focus groups. The results were shared with employees and the management team. The management team then developed a process for moving the overall culture forward with action plans and performance criteria.
A facilitated coaching and mentoring process allowed teams to talk about their reactions to potential change, advantages and disadvantages, and concerns and aspirations. Directors and managers then developed a collective vision of the future for the organization and a statement of its implications in terms of priorities for action.
Drivers of organizational performance
A key driver of organizational performance is the alignment between complex, internal social systems and their purpose and direction. To achieve better alignment, HR executives need to engage with smaller multi-functional teams and communicate a consistent message that ladders up to connect individual goals with the organization’s strategic plan and related metrics.
In this case, Arcus deployed a balanced scorecard framework to measure small incremental changes towards best practice benchmarks. That program (which is based on more than 2,000 organizations in 36 sectors) allowed the company to define, develop and measure its performance against its peers.
The benchmarked measures went well beyond metrics such as retention and turnover, and used aggregated, qualitative feedback from individuals, teams, departments and organizations to better understand their current and desired states in the context of the organization’s vision and strategic plans.
Understanding individual goals and expectations was key to helping the organization define realistic, durable scenarios of desired outcomes.
In addition, a customized points-based position evaluation system assessed job responsibilities, positions, competencies and compensation for enhanced pay equity and strategic alignment between individual and organizational and priorities.
Deploying a change management strategy based on scenario planning
Most change management strategies fail because of a lack of visibility into the realistic outcomes of strategic plans. Unrealistic expectations result in the disproportionate distribution of resources to change initiatives. There is widespread dissatisfaction with existing ways of strategy planning, partly because many CEOs have not realized the value of scenario planning in the strategic planning process.
Arcus deployed nine potential scenarios stemming from varying levels of success for the change management project. These were based on dialling up or dialling down several of the benchmark scorecard key performance metrics that were identified as having escalating levels of impact on outcomes.
During a retreat with senior management, Arcus devised a number of solutions to pressing strategic and operational problems and uncovered numerous knowledge gaps and structural issues for which possible solutions were identified.
More importantly, the process allowed staff to be involved in the needs assessment and problem-solving process and created greater buy-in for the solutions for development and action. A series of transition measures to review progress was supervised by a transition management team and an overall communication mechanism.
There were tangible and identifiable shifts in behaviours and attitudes that align with a more focused and performance-orientated approach, with the organization’s agenda overcoming politically motivated ones prevalent in a siloed working environment. A followup benchmarking program using the scenario-planning culture change model will be conducted in the near future to check progress.
The five important influencers of success were:
Start small: Start small and proceed in incremental steps. Dramatic organization-wide changes are highly disruptive and distract employees from daily operations.
Involve the entire organization: Organizations that successfully break down silos through change initiatives start the process with organization-wide feedback. The process sends a clear message to all staff that their feedback is important.
Plan for realistic outcomes: Organizations that frequently survey employees find a common barrier is skepticism about promised outcomes.
Provide frequent updates: We hear often from staff that there is a flurry of announcements about a change initiative and then nothing is heard for months from the leadership team about any progress on the initiative.
Test the strategy: Test strategies before they are deployed across an organization. This can be done with ongoing feedback from representative samples of teams within organizations and a core team of change agents who are drawn from key departments and functional areas.
Merril Mascarenhas is a managing partner at Arcus Consulting Group in Toronto. He can be reached at (416) 710-2727 or by email at email@example.com.