Acknowledging those who change their behaviours to match new directions
Recently, a Canadian software company decided to radically change its business strategy. The company initially provided customers with highly tailored, customized software, requiring significant on-site re-engineering to ensure the promised level of functionality. The new business strategy moved the company away from tailoring and customization to a more “shrink-wrapped” software solution.
This change was driven by the company’s realization that most customers were not utilizing the high level of customization. A predictable, if fixed, level of functionality would suffice. The new strategy would enable customers to develop their need for greater functionality over time and provide the company with a continuing revenue stream by selling new versions of software.
The shift in business strategy required a corresponding shift in the company’s workforce strategy. Previously, employees with keen people skills, as well as technical skills, were required in order to understand a customer’s business well enough to customize the software. The company often had teams at customer sites for several months making adjustments to the software.
The new strategy called for a workforce with a high degree of innovation and collaboration to design and test the software prior to shipping so it delivered a predictable functionality without a high level of on-site adaptation. Culture and staff capabilities needed to change. Where once external relationship building was key, staff would now need to focus on innovation and creativity in a team-based culture.
This shift presented the vice-president of the company’s human resources department with a challenge. She realized most of the people practices had been designed to reinforce and support a workforce capable of delivering on the former strategy. The new approach necessitated major changes to these practices. She concluded that, before giving the company a make over, employees needed to have a clear understanding of the change in workplace culture. Once that was understood, HR could redesign the people practices to align with the newly defined workplace culture.
By means of survey data and workshop feedback, the company examined its current and desired workplace cultures from six key perspectives. They determined there was a significant gap between the current and desired workforce cultures.
As long as it existed, the workplace culture would reinforce and support the wrong behaviours and make the shift to the new business strategy very difficult. Hiring and retaining the workforce of the future would be hindered by a workplace culture emphasizing the wrong orientation for developing a creative, collaborative work environment.
So, she decided to address this challenge by aligning reward and recognition programs with the desired culture. The following changes were implemented:
•Base pay was redesigned as a person-oriented program, rather than the former job-oriented model. The main criterion for increasing base pay was primarily for increases in competencies rather than completion of tasks.
•The variable pay program shifted from an individual-based orientation to a team-based focus, emphasizing the need for employees to collaborate in order to develop innovative products. The variable pay awards were tied to team objectives, measured at project milestones.
•The informal, non-financial recognition programs began to acknowledge product launches and professionalism of the staff in developing reliable and predictable products. Previously, employees were rewarded for meeting customers’ individual needs.
Of course, these reward and recognition programs were just the first step. Other changes were also needed. For example, the behaviour of all company managers had to shift from a “command and control” focus to one that emphasized involving workers and sharing in the decision-making. These modifications led in turn to other changes, including a shift in staffing practices, so new hires were innovative team players also.
The bottom line is that a radical shift in business strategy is bound to have repercussions for workplace culture and people practices, including recognition programs can, and should, be adapted accordingly.
Ted Emond is a human resources strategy and change consultant in Hewitt Associates’ Toronto office. For more information you can contact him at (416) 225-5001 or by e-mail at [email protected].
Six key perspectives of workplace culture
1. People — the concern for people in an organization. This perspective views people from either a “job” or “person” point of view. The job-oriented culture is characterized by consistent work patterns and top-down introduction of change. On the other hand, high feedback environments, challenging and varied job content and staff involvement in decision-making characterize the person-oriented culture.
2. Performance — the dominant approach for achieving performance. The process-oriented culture emphasizes roles, functions, procedures and attention to detail. The results-oriented culture emphasizes objectives and measures, learning from mistakes and doing things quickly.
3. Identity — whether employees identify with the organization or with the occupation. In company- oriented cultures, the history of the organization is a source of inspiration. Professionally oriented cultures emphasize job competencies, cooperation among departments and high awareness of costs.
4. Openness — the extent to which the organization is receptive to the diversity of its people and viewpoints. Closed cultures are characterized by lengthy induction periods, emphasis on formality and avoidance of confrontation. Open cultures are characterized by people feeling at home soon after joining the company, direct relationships, as well as open and generous management.
5. Control — the principal means by which the organization exercises control over its activities and performance. Systems-driven cultures maintain standards by external sources, clear direction, and an aversion to risk. Self-driven cultures regard commitments as solid undertakings, and maintain standards through self-control and people who act on their own.
6. Flexibility — how the organization deals with its external customers. Rulebook-oriented cultures apply highest professional standards, with controls and checks in place. Pragmatic-oriented cultures apply professional standards flexibly and empower people to act in the organization’s best interests.
This change was driven by the company’s realization that most customers were not utilizing the high level of customization. A predictable, if fixed, level of functionality would suffice. The new strategy would enable customers to develop their need for greater functionality over time and provide the company with a continuing revenue stream by selling new versions of software.
The shift in business strategy required a corresponding shift in the company’s workforce strategy. Previously, employees with keen people skills, as well as technical skills, were required in order to understand a customer’s business well enough to customize the software. The company often had teams at customer sites for several months making adjustments to the software.
The new strategy called for a workforce with a high degree of innovation and collaboration to design and test the software prior to shipping so it delivered a predictable functionality without a high level of on-site adaptation. Culture and staff capabilities needed to change. Where once external relationship building was key, staff would now need to focus on innovation and creativity in a team-based culture.
This shift presented the vice-president of the company’s human resources department with a challenge. She realized most of the people practices had been designed to reinforce and support a workforce capable of delivering on the former strategy. The new approach necessitated major changes to these practices. She concluded that, before giving the company a make over, employees needed to have a clear understanding of the change in workplace culture. Once that was understood, HR could redesign the people practices to align with the newly defined workplace culture.
By means of survey data and workshop feedback, the company examined its current and desired workplace cultures from six key perspectives. They determined there was a significant gap between the current and desired workforce cultures.
As long as it existed, the workplace culture would reinforce and support the wrong behaviours and make the shift to the new business strategy very difficult. Hiring and retaining the workforce of the future would be hindered by a workplace culture emphasizing the wrong orientation for developing a creative, collaborative work environment.
So, she decided to address this challenge by aligning reward and recognition programs with the desired culture. The following changes were implemented:
•Base pay was redesigned as a person-oriented program, rather than the former job-oriented model. The main criterion for increasing base pay was primarily for increases in competencies rather than completion of tasks.
•The variable pay program shifted from an individual-based orientation to a team-based focus, emphasizing the need for employees to collaborate in order to develop innovative products. The variable pay awards were tied to team objectives, measured at project milestones.
•The informal, non-financial recognition programs began to acknowledge product launches and professionalism of the staff in developing reliable and predictable products. Previously, employees were rewarded for meeting customers’ individual needs.
Of course, these reward and recognition programs were just the first step. Other changes were also needed. For example, the behaviour of all company managers had to shift from a “command and control” focus to one that emphasized involving workers and sharing in the decision-making. These modifications led in turn to other changes, including a shift in staffing practices, so new hires were innovative team players also.
The bottom line is that a radical shift in business strategy is bound to have repercussions for workplace culture and people practices, including recognition programs can, and should, be adapted accordingly.
Ted Emond is a human resources strategy and change consultant in Hewitt Associates’ Toronto office. For more information you can contact him at (416) 225-5001 or by e-mail at [email protected].
Six key perspectives of workplace culture
1. People — the concern for people in an organization. This perspective views people from either a “job” or “person” point of view. The job-oriented culture is characterized by consistent work patterns and top-down introduction of change. On the other hand, high feedback environments, challenging and varied job content and staff involvement in decision-making characterize the person-oriented culture.
2. Performance — the dominant approach for achieving performance. The process-oriented culture emphasizes roles, functions, procedures and attention to detail. The results-oriented culture emphasizes objectives and measures, learning from mistakes and doing things quickly.
3. Identity — whether employees identify with the organization or with the occupation. In company- oriented cultures, the history of the organization is a source of inspiration. Professionally oriented cultures emphasize job competencies, cooperation among departments and high awareness of costs.
4. Openness — the extent to which the organization is receptive to the diversity of its people and viewpoints. Closed cultures are characterized by lengthy induction periods, emphasis on formality and avoidance of confrontation. Open cultures are characterized by people feeling at home soon after joining the company, direct relationships, as well as open and generous management.
5. Control — the principal means by which the organization exercises control over its activities and performance. Systems-driven cultures maintain standards by external sources, clear direction, and an aversion to risk. Self-driven cultures regard commitments as solid undertakings, and maintain standards through self-control and people who act on their own.
6. Flexibility — how the organization deals with its external customers. Rulebook-oriented cultures apply highest professional standards, with controls and checks in place. Pragmatic-oriented cultures apply professional standards flexibly and empower people to act in the organization’s best interests.
