by
T.J. Elliott
Director, Research & Consulting Design
CavanaughLeahy & Company
Executive Summary
Change is a word with many meanings. One aspect that interests many organizations is cultural change. What is not clear is whether those trumpeting culture changes are all talking about the same thing. Schein’s definition of culture a useful starting place for explorations of a movement that boasts legions of both detractors and supporters in the business world. Schein called culture:
A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.
A simpler rendering of this definition might be David Drennan’s ‘how things get done around here.' Another definition is that culture is actually the whole way in which people make sense out of their work: this is what we are doing, here is how we feel about it, this is what we think is important, etc. They can, for example, make sense of it as a way to make a living or a way to define their lives. Some reduce definitions of culture to such simplifications as its artifacts. These include what is in the written pronouncements of a company on vision, mission, strategy and other issues; its handbooks, communiqués, policies, and agreements. Others select particular essentials of emphasis; i.e., customers, stockholders, and/or employees. With any of these abstractions, the person should remember that culture, a complex phenomenon, is much more than such simplifications.
Culture may mean different things on different sides of the world. One study demonstrated that US executives define corporate culture as the 'ethos of the company.' In contrast, their counterparts in the UK, France, Germany, the Netherlands, Australia and Canada define the same concept as 'shared valued or team spirit.'
Culture change starts with figuring out what the current culture is. Assessing culture before attempting to change it may seem obvious, but many companies are so eager to get to work that they hurry or skip this preliminary step. (An elementary outline is offered in the body of this document.)
Approaches to cultural changes are varied. Edgar Schein provides a broad (and research-supported) answer to this question:
Schein distinguishes between 'primary' and 'secondary' levels for culture change; the former including more direct strategies, such as modifying organizational structure and work design, the latter including more tangential approaches, such as changing appraisal system dimensions, reward strategies, and training and development provisions. Schein argues that a combination of levers, both primary and secondary, is needed in most situations to ensure cultural transformation and to overcome resistance to change and systemic homeostasis.
(Silvester, Anderson and Patterson, 1999).
However, companies seeking culture change should recognize the systemic nature of such an endeavor; increases in spending that aid a culture change may also decrease profits in the short term. A sampling of the most common methods includes:
The most common challenge to cultural change is the resistance of those within the organization. The resistance is rooted in fear of the unknown, in a desire to keep the ‘old’ ways, and in a belief that the change will not be successful anyway. Cultural change is inherently threatening and stressful as it challenges participants' belief systems.
Brief examples of cultural change efforts are also provided.
Introduction
In recent years, more people have written about change in work organizations than at any other time in the study of business enterprises. The word has thus gained a variety of connotations and denotations. For example, simply hearing it can raise the hair on the back of the neck of many a veteran of the downsizing and reengineering of the 1980s and 1990s. Change became synonymous then with the danger of losing one’s job. (I used to show groups who were dealing with such situations a New Yorker cartoon. In the drawing, the Grim Reaper is leading a terrified man in his pajamas out of his bedroom while the man’s wife cheerfully notes, "Don’t worry, honey, change is good!")
The specific meaning of change is also varied. Some writers are referring to new systems, others to takeovers and mergers. There are fierce proponents of change through such methods as agile and lean manufacturing, business process reengineering and other strategies.
A group of leaders and consultants that has grown since the early 1980s invoke culture change as the most important change that a company can undertake. Jeffrey Pfeffer, the highly respected Stanford Business School theorist, sums up this view. He contends that "the culture and capabilities of an organization -- derived from the way it manages its people -- are the real and enduring sources of competitive advantage" (Pfeffer and Veiga, 1999).
What isn’t clear is whether those trumpeting culture changes are all talking about the same thing. This article is an attempt to display some common images, examples, and meanings of culture change. Thus others interested in the subject can gain a more precise language to aid their explorations. Then they may talk about the subject and plan applications employing concrete examples to make their points and indicate their desires. However, the examples of others’ experiences are never the final word for any company attempting an alteration in the way people work together. They are only a basis for starting a conversation that will address the particular needs of that company at that time.
Definition
"Schein (1996) has argued that culture is one of the most powerful and stable forces operating in organizations. Culture presumably influences a firm's financial performance (Denison, 1984), internal development (Cox, Lobel, & McLeod, 1991), and strategic success (Bluedorn & Lundgren, 1993). Some analysts consider culture-match to be a vital ingredient in evaluating potential corporate mergers (Fairclough, 1998). Unfortunately, organizational culture has been construed or misconstrued in many ways, and interpreted relative to various paradigms (Schultz & Hatch, 1996). Indeed, management scholars fail to agree even on a definition of organizational culture. Perhaps this should not be surprising since business scholars borrowed the culture concept from anthropology (Reichers & Schneider, 1990), and anthropologists have proposed at least 164 different definitions of culture (Sathe, 1985). Nonetheless, if the culture concept is important, we need to identify definitions and theoretical models capable of molding some degree of consensus and driving the field forward (Lachman, 1997; Rousseau, 1990). "
Newstrom and Davis define culture as "a set of important values, beliefs, and understandings shared by members of an organization" that also includes "the unwritten, informal norms that bind an organization together." Its intangible, contradictory, and subjective nature leads some observers claim that company culture is a mere device of academics and not some definable entity. They further state that even if there was such a thing as a culture that people could not change it; culture shifts and transforms due to a host of forces and not as the result of prescriptions and initiatives. Others such as Allan Kennedy who with Terrence Deal wrote one of the most influential early books on the subject ¾ Corporate Cultures: The Rites and RituaIs of Corporate Life" ¾ now complain that much of what is written and said about culture change misses the important context. He told an interviewer for Inc magazine in 1999 that, "You can't work on cultural problems except in a strategic-business context" (Hopkins and Richman, 1999). His caveat to working on culture is that each company must build a culture that works for its particular strategy, that culture is not the primary consideration. Kennedy warns, "A culture may help or hinder a company, but if you get the strategy wrong, you're dead in the water no matter what you do culturally."
Additionally, early proponents of culture have seen their grand promises picked at by later observers. The faultfinding is exemplified by Julia Connell's (1998) observations, Peters and Waterman with their cultures of excellence, Deal and Kennedy with their ‘strong’ cultures and Ouchi with his Theory Z popularized the tie between `positive' culture and increased productivity. Subsequent study, however, suggested that "although performance may be enhanced at first by ensuring that organisational priorities are uniformly established, over time, if cultural controls multiply excessively, resistance is likely to develop, causing performance to decrease." In other words, you can have too much of a good thing over the long term. Performance did decrease: many of Peters and Waterman’s excellent companies no longer exist.
Yet despite the protests of such critics, a review of the many studies of and efforts at culture change yields some cause for hope that its pursuit can make a difference to a business. A useful starting place for such an effort is Schein’s definition of culture:
A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. (Schein, 1992)
Gareth Moragn (1996) talks about the metaphor of corporate culture as including "values, beliefs, norms, rituals, and other patterns of shared meaning." As one observer noted a simpler rendering of these definitions of culture might be David Drennan’s ‘how things get done around here’ (Yolitz, 1999). Starting with that focus, some further reduce definitions of culture to its artifacts: what is in the written pronouncements of a company on vision, mission, strategy and other issues; its handbooks, communiqués, policies, and agreements. Others define culture by stating particular essentials such as emphasis (i.e., customers, stockholders, and/or employees.)
However, culture is more than that. Such simplifications are not the culture but rather illustrations to make a complex phenomenon more understandable. An organization's written mission statement, for example, is not equivalent to its culture. Nor is the sum of its employees’ actions tantamount to a picture of the culture. They both only portray an aspect of the organizational culture. Culture is actually the whole way in which people make sense out of their work. Culture is what people would say if they could say this is what we are doing, here is how we feel about it, this is what we think is important, etc. (Etienne Wenger while he does not use the word culture offers some useful examples of a community’s ‘relations of mutual accountability’: "what matters and what does not, what is important and why it is important, what to do and what not to do, what to pay attention to and what to ignore, what to talk about and what to leave unsaid, what to justify and what to take for granted, what to display and what to withhold, when actions and artifacts are good enough and when they need improvement or refinement." 1998.)
Culture may mean different things on different sides of the world. One study demonstrated that US executives define corporate culture as the 'ethos of the company.' In contrast, their counterparts in the UK, France, Germany, the Netherlands, Australia and Canada define the same concept as 'shared valued or team spirit.' ("Results also showed that corporate culture is universally acknowledged as vital to success and that culture change has been a top priority for nearly half of the respondents." Communications World, 1996).
People in companies seeking to further understand what culture is make use of certain dimensions. So cultures may be strong or weak. (Schein defines strong culture as a culture based on the homogeneity and stability of group membership, and the length and intensity of the group's shared experiences.) They may be fragmented or intact. They may be aggressive and ‘can-do’ or conservative and cautious. They may be ‘macho’ (high risk in a fast feedback on strategy environment) or ‘work hard, play hard’ (low risk in a fast feedback on strategy environment) or ‘bet your company’ (high risk in a slow feedback on strategy environment) or process (low risk in a slow feedback on strategy environment). Culture can run along the dimensions of tight control or flexibility, emphasis upon competitors or upon maintaining the socio-technical system within the organization.
How do you assess culture?
While figuring out what the current culture is before attempting to change it may seem obvious, many companies are so eager to get to work that they hurry or skip this preliminary step. An additional reason for reticence regarding this task is its complexity: studying the ‘rites and rituals’, observing its behavioral norms, interviewing participants, and examining documents are all time-consuming and potentially disturbing approaches. However, an exhaustive search of the literature and a variety of personal experiences in culture changes allows this writer to state categorically that successful efforts must start with some examination of the present culture. Otherwise how can one know what is to be changed?
There are a variety of ways in which to proceed from complicated instruments to search conferences. One simple method for inexperienced companies is to convene a small group of the ‘leadership.' (However leadership is defined on a spectrum from all senior managers to a mix with veteran shop workers.) The group then forms 'hypotheses' about what is the character of the culture. They should also consider the causes for the various aspects of the culture they describe. For example, a 1993 study by Kepner-Tregoe, an international consulting firm, of 271 manufacturing firms that were undergoing corporate restructuring found that employee morale plummeted. Thus such a steering group as this might speculate that restructuring in their own company is also a cause of poor morale. Or they might point to another aspect of the existing culture that has kept morale high.
They then check their hypothesis by asking others in the company their opinions. This can be done through questionnaires, surveys, focus groups, and interviews. Asking only specific close-ended questions (such as are common in a questionnaire), however, may paint an incomplete picture. The speculations of the leadership may narrowly frame responses. Those assessing company culture should whenever possible employ open-ended methods.
One can also walk backwards from the signal events of a company’s life to try to discern the culture. For what do bold initiatives and satisfied clients tell you? The hiring of a particular consulting team? The choices of senior leadership team members? The purchasing pattern for technology? The reticence of members to question decisions or raise bad news? The ‘public execution’ of such dissenters?
Any picture of the culture is bound to be incomplete. (After all as Schein points out, "Effectiveness in an organization is dependent upon effective dialogue, communication and shared mental models among organizational subcultures. This is becoming increasingly difficult as different units, or "communities of practice," create their own common language, frame of reference and assumptions ... [or] subcultural boundaries.") Companies need to focus on getting a good enough picture prepared from many voices and deep questioning of assumptions. Most importantly, the culture should have a connection to the stated enterprise of the business. Such efforts do not occur in a vacuum; they are concerned with helping the company to work better for all involved.
How does culture change?
Edgar Schein also provides a broad answer to this question:
Schein distinguishes between 'primary' and 'secondary' levels for culture change; the former including more direct strategies, such as modifying organizational structure and work design, the latter including more tangential approaches, such as changing appraisal system dimensions, reward strategies, and training and development provisions. Schein argues that a combination of levers, both primary and secondary, is needed in most situations to ensure cultural transformation and to overcome resistance to change and systemic homeostasis.
(Silvester, Anderson and Patterson, 1999).
Schein’s premise is supported by some research (although certainty as to how culture change occurs is hard to come by.) Where the desired culture change in a manufacturer is to an atmosphere that has increased employee commitment, comprehensive studies have found that organizational structure, employment practice, and other attributes of factories are the significant ‘levers’. Some of those other attributes include opportunity for long-term tenure, intensive on-the-job training; and regular promotions.
(WARNING: Companies seeking culture change should according to these studies recognize the systemic nature of such an endeavor; increases in spending that aid a culture change may also decrease profits in the short term. The trade-offs present hard choices to a company constrained in offering such incentives.)
Bounds, Yorks, Adams, and Ranney (1994) offer a schema of Culture Embedding Mechanisms that emphasizes the actions of leaders:
Culture Embedding Mechanisms
Primary Embedding Mechanisms
What leaders pay attention to, measure and control on a regular basis
How leaders react to critical incidents and organizational crises
Observed criteria by which leaders allocate scarce resources
Deliberate role modeling, teaching, and coaching
Observed criteria by which leaders allocated rewards and status
Observed criteria by which leaders recruit, select, promote, retire, and excommunicate organizational members
Secondary Articulation and Reinforcement Mechanisms
Organization design and structure
Organizational systems and procedures
Organizational rites and rituals
Design of physical space, facades, and buildings
Stories, legends, and myths about people and events
Formal statements of organizational philosophy, values, and creed
There are many other suggested ways in which to accomplish cultural change or in which to influence the formation of culture. They range from the assurance of diversity in hiring to the purchase of technological systems. They are for the most part unproved. The person looking for a method needs to bear that caveat in mind. Here is a sampling of the most common methods:
In this view, cultures emerge, are maintained, and change through communication (Conrad, 1990). Consistent with this idea is the notion that culture changes by helping those involved to change their beliefs. Connors and Smith (1999) in the Journal of Business Strategy state that, "Really effective leaders create experiences that transform people's beliefs in a way that causes them to step up to new actions that drive desired results."
Another more advanced form of communication is dialogue among members of the organization. In such settings, they might just share their perceptions with each other or perhaps even go further and make public their ‘theories’ of how things work. This latter variation allows people to "relinquish 'old'" beliefs as to how the world works through encountering new situations that challenge those old assumptions and foster new ideas. They can alternatively hear the theories of other group members which in turn allow them to ‘figure out’ new circumstances. (Silvester, Anderson and Patterson, 1999).
Culture is in one view simply the patterns of shared attributions. This method of changing the attributions might therefore help to change the culture. However, such alteration can be glacial. It will depend upon a willingness to operate in a manner foreign and even threatening to many people (testing assumptions, encouraging others to question yours, sharing relevant information, examining the reasons underlying problems, basing ‘theories’ on verifiable data, etc.) The hopeful aspect of this method is that there are documented instances of teams adopting just such methods and affecting cultural changes through their work. Additionally, a 1997 study by Mercer Worldwide found that lack of communication and the failure to solicit employees’ opinions about changes was major factor in the failure of significant company initiatives. Miller and Dess outline five steps in the process of generating support that undergirds the institution of a desired culture:
Telling: expressing the proposed contents of the vision
Selling: convincing others of the soundness and attractiveness of the vision
Testing: checking out what the audience has taken from the message
Consulting: soliciting from employees their feedback on the vision presented and their spontaneous ideas on the future and present of the company in general
Co-creating: getting the active participation of as many workers as possible
The Wall Street Journal reported in 1993 on a survey of 553 global manufacturers by consulting firms Boston Consulting Group and Product Development Consulting Inc. that found that the world's most successful manufacturers triumph by curbing internal politics and taking similar steps to foster cooperation among employees. Culture is changed in this way by getting people to cooperate with each other, to ‘team’.
Consistent with this strategy for cultural change is the idea that information sharing will alter the way people work together. Considering the perception that information is not shared due to lack of organization or hoarding behavior, this method holds that the act of sharing information will change the way people work with one another. Of course, it also incites a ‘chicken or egg’ query: which comes first the cultural change or the information sharing?
Some believe that the essence of a culture change is the extent to which a company shifts to emphasize knowledge, innovation, or learning; the extent to which it becomes a learning organization. ("A learning organization is a group of people who have woven a continuous, enhanced capacity to learn into the corporate culture, an organization in which learning processes are analyzed, monitored, developed, and aligned with competitive goals. A learning organization generates knowledge and learning faster than competitors and turns that learning into a strategic advantage to outmarket, outmanage, and outsell competition." Kapp, 1999). The learning might be specific such as problem solving and statistical process control training at Motorola. Broader applications might entail learning about the way in which people interact with one another within the confines of a project such as at GE’s Crotonville sessions.
Still other observers aver that the heart of culture change is ‘heart’ itself. They believe that companies making such a change must pay more attention to matters of the human spirit. Tor Dahl, director, World Confederation of Productivity Science, claims that 54% of all performance breakthroughs are available from working, not with technology and processes, but with issues of the human spirit. Artifacts of such a culture are work/life programs, creation of ‘spaces’ for open dialogues, and opportunities to attain personal mastery.
An often touted but difficult method for culture change is increased employee participation. This approach is qualitatively different from increased communication. It is a more dramatic transformation that usually requires shifts of the decision-making in a company. Are managers prepared to undertake such a change? (See the HP example below.) Jeffrey Pfeffer has written that, "Research, experience, and common sense all increasingly point to a direct relationship between a company's financial success and its commitment to management practices that treat people as assets. However, trends in management practice are actually moving away from these principles." (Pfeffer and Veiga, 1999).
He believes that the payoff for companies in the cultural change comes if it is aimed at "plac(ing) workers at the core of their strategies." They should therefore offer additional power to employees in order to reap benefits that emerge "… because of the increased involvement and commitment that comes from having more control and say in their work; … because they are encouraged to build skills and competence; and … because more responsibility is placed in hands of employees farther down in the organization." Participation would also ameliorate the resistance to organizational change that is noted as the norm in almost every study on the topic.
Participatory management though is an elusive product according to a research project conducted by our firm, Cavanaugh Leahy & Company. The end of such an effort is often not well defined and the means to reach it are even hazier. At a minimum, someone using this method for cultural change would need to invest in the acquisition of soft skills. These include teamwork, decision making, communication, conflict resolution and problem solving: these are all prerequisites of participation. More importantly they would have to examine their own willingness to shed authority.
Some experts in culture change (like Allan Kennedy) hold that "the culture of any organization is still a reflection of the deeply held values and behaviors of relatively few individuals-in the case of large companies, those of the CEO and maybe a handful of very senior executives." So culture change is not primarily about participation but rather about transformation of the mental models at the top and migration of that thinking downwards. (There are those who will try to have it both ways. A 1997 Industry Week report (Sheridan) found culture change to be the common denominator among the finalists in the Best American plant competition. "The entire workforce must be involved in improving quality and productivity, but management must lead the way.") This form of cultural change is arguably the most common. In this scheme, leaders devise visions that they pass down to the employee population and devise programs to instill different values. The degree to which they are mixed with other methods varies but the presence of leaders at the center of cultural changes is common.
In fact, for many leaders "the idea of culture as a form of control has had an enduring attraction" as John Hendry (1999) puts it. The idea is to create and sell a vision of the corporation and its future to which the employees can subscribe. They will then take that vision as their goal and work cooperatively and unselfishly toward it, even if we treat them according to the rules of the market."
Unsurprisingly, some observers like Hendry look at the organizational change efforts of the 1980s and 1990s and pronounce them ineffective. Their theory is that cultural change, predicated upon ideas of control, is useless in organizations that are trying to be more "organic" in their structure and more innovative in their course of action. Conservative commentators, however, offer examples of leaders from Jack Welch to Drew Lewis to Lew Gerstner who were able to drive cultural change throughout an organization.
Challenges of cultural change
As already alluded to above, cultural change does not always work. One look at ineffectiveness of change efforts reported the presence of the following three paradoxes:
1. Change depends on management, but management makes change less likely to occur. (For example, the change project becomes exclusively affiliated with a particular division or area and subsequently is undermined not because of the questionable merits of the project, but because of antagonism toward the project's sponsor or the trust and cooperation necessary are taken for granted rather than nurtured.)
2. Change depends on the commitment of change leaders, but the commitment of change leaders makes change less likely to occur. (For example, in order to demonstrate commitment, change leaders choose too broad a scope of projects and consequently have insufficient time to oversee and manage any part of the project. Alternatively multiple change efforts confuse employees.)
This finding is confirmed in other studies that found the manager group’s view of the phenomenon as something outside their control as a barrier to change. Such managerial perceptions coexist with the belief that any change that does occur will be "merely peripheral rather than core as a result of a long-established and ubiquitous company culture" (Silvester, Anderson and Patterson, 1999). Managers, in other words, are so daunted by the company’s existing culture that they refuse to believe that anything can change it substantially. Cultural change is inherently threatening and stressful as it challenges participants’ belief systems.
It is also true that a desired culture may result (at least in part) from factors largely beyond the control of the leadership of a company: friendships in the plant, local customs, the quality of surrounding educational institutions. (Some population ecologists go further and flatly "argue that organizations are so completely controlled by their external environments that they have little ability to transform themselves in any short-term, purposeful fashion." Italics added. This may seem like academic nihilism but surprisingly matches the attitudes expressed by many front-line workers: "Nothing ever really changes around here.")
However, the emphasis upon some theme ¾ in order to let a culture build around it ¾ is often within the control of leadership. However, as Kennedy states this is not necessarily always a good thing: the choice can be disastrous in the long term. "If you build a company culture around the lure of potential riches, and that possibility diminishes or evaporates, what's left to command the loyalty and respect of employees?"
Examples of culture change
The following are examples drawn from case studies. They serve two purposes: concrete examples of what was tried and specific strategies that observers may determine as possible or unfeasible for their own companies. Additional information is available on many of these cases.
"Around 7 years ago, American Eagle Outfitters had to engineer a turnaround to make the company profitable and ensure its long-term viability. Much of the credit for the turnaround has to go to the company's culture. I starts with a fundamental belief in the value of each individual. When people join the company, they have a tendency to stay. Compensation and benefit programs were designed with retention in mind. Culturally, American Eagle Outfitters wants its employees to think like business owners, to think like retailers. "
(Bergdahl, 1999)
"In an interview, Mei-Lin Cheng and Julie Anderson, managers at Hewlett-Packard (HP), discuss the reengineering process at HP's North American distribution organization. (The process was that they were creating a complicated system, using millions of dollars of off the-shelf software from an outside vendor – SAP --to create a single, unified database covering everything from the customer order through credit check, manufacturing, shipping, and warehousing to invoicing. They had to reengineer all those systems.) Cheng says that they talked about how to structure the reengineering project, and then considered that maybe they should not have a structure at all. When people are free to define their own goals and roles at work, their commitment intensifies and the job becomes more personally meaningful. Anderson says that the team was so effective because it had no supervisors, no hierarchy, no titles, no job descriptions, no plans. The idea was to try things out and learn as they went along. What they were trying to do was to build the capacity to learn, first in individuals and ultimately in the organization."
"We started with a two-week training and orientation program, to familiarize everyone with the existing processes and the needs of the business. For instance, we all physically followed an order through every step. When the order was sent to HP headquarters for batch processing on an outdated computer system, everybody took a bus to headquarters and talked to the people there about their jobs. The tour took three days, but everyone got a tacit understanding of the process. Practically everywhere we went we saw a building full of inventory. We met people whose entire jobs were devoted to reconciling information from one computer system to another. We introduced a couple of key ideas, such as the value of considering diverse points of view, and MIT professor Peter Senge's systems thinking, which emphasizes learning skills and teaches a perspective encompassing the whole of a situation, not just the parts."
(Sherman, 1996).
W.L Gore & Associates has received Workforce magazine's Optimas award for innovation. The flat, "lattice" culture of W.L. stems from the 4 core values put in place by founder Bill Gore that were meant to foster a creative and energizing work environment. It is a culture that, without HR's commitment to those values, would be doomed for failure. Those values are: 1. fairness to each other and everyone with whom we come into contact, 2. freedom to encourage, help and allow other associates to grow in knowledge, skill and scope of responsibility, 3. the ability to make one's own commitments and keep them, and 4. consultation with other associates before undertaking actions that could impact the reputation of the company by hitting it "below the waterline."
(Anfuso, 1999).
"Exide Electronics, a major supplier of uninterruptible power system equipment, embarked on a journey of changing a culture to improve quality, enhance customer responsiveness, and reduce costs. … the Raleigh plant operation has been in various stages of changing a culture in its manufacturing ranks by implementing employee involvement, corrective action, and continuous improvement (CI) processes throughout the organization. … There were pockets of success and enthusiasm in the early years (from 1988 through 1991), but there was no unified direction for the process, nor was there significant across-the-board improvement in the operation. The importance of those years, however, cannot be overstated. The sporadic successes of those years enabled the organization to shift its thinking from the internal question of "if" change were going to happen to "how" change was going to happen. …
The focus on quality and CI by the Corrective action teams has proved successful. Results of these corrective action teams were best seen in the focused factory pilot production team that has been in existence the longest. Over the period from 1989 to 1992, this team achieved a 39 percent reduction in inventory, a 33 percent improvement in quality, and a 57 percent reduction in production lead time. … All employees in the business unit began having between 40 percent and 50 percent of their performance rating based on quality goals. These quality goals encompassed supplier quality, internal quality, customer site start-ups, and field reliability. A number of statistics started being used to measure the organization's performance against these quality goals, including production yields, defects per unit, customer site installation incidents, and warranty dollars spent. … To underscore the message that everyone is responsible for quality, every employee was given the opportunity to earn more money based on performance against the quality measurements. In particular, all employees became eligible for variable pay at the end of the year, as determined by the warranty cost reductions (field reliability measurement) achieved. …
This revitalized emphasis on quality came as a result of listening to customers. Exide's product applications began requiring more technology and reliability at an ever-increasing rate. Customers began coming on-site for plant tours and Round Table discussions to explore their needs and expectations. … Ongoing communication and feedback at all levels have been tantamount to accelerating change in the organization. In addition to soliciting customer feedback, a number of cross-functional focus groups were established to solicit internal feedback. … The hourly performance appraisal form was updated … Prior appraisal forms rewarded the usual production output, attendance, and safety. The new form rates employees in several new categories to encourage significant changes in the work habits of many employees. The two areas weighted most heavily on the new performance review form were (and still are today) quality and CI. For the first time employees were expected to come up with ideas for improvement. Other new categories included motivation, attitude, teamwork, communications, and flexibility. Clearly, quality and CI were going to be a way of life in running the business."
(Klunk, Sarah, Wenzel Panetta, Jude, Wooten, Joe 1996)
Postmaster General Marvin Runyon promised to transform a management culture renowned for its authoritarian, command-and-control style into a model of enlightened leadership in which employee involvement and empowerment were to be the new marching orders. … ‘Absolutely nothing has changed,’ says Vince Sombrotto, national president of the NALC, which represents about 240,000 active letter carriers. ‘Employee empowerment seemed like a good idea for about 60 days, until management figured out that it meant actually giving up some of their power and letting workers have a say. Now they have returned to their old confrontational style of management by stick.’
"When Postmaster Runyon took over the reins at the Postal Service, he talked about doing all the right things: streamlining management, moving away from an authoritarian culture, holding postal managers and workers more accountable for their performance, and introducing work teams and cross-functional performance clusters to encourage formerly disparate operations (such as mail handling and mail delivery) to work more closely together. But four years later labor relations have gone from bleak to abysmal. … Last year postal management acknowledged that cutting the training staff (by 40%) and making supervisory training optional perhaps wasn't such a great idea. … The Postal Service is experimenting with self-directed work teams in pilot projects at a handful of facilities … Iike many organizations, it's trying to get a feel for what works, but appears to have no strategy yet for how to roll out teams on a broad scale."
"Over the years, there has been no shortage of schemes for trying to change the work culture in the Postal Service, but management has never been able to come up with an overall strategy for involving the unions or for pushing initiatives down into the ranks of the organization where changes are most sorely needed. One problem, say critics, has been a short-term rather than a long-term focus, perhaps a byproduct of the fact that several recent postmasters general and their management teams have been short-termers. "We've said it would take at least 10 years to implement cultural change at the Postal Service, but I'm not sure management is committed to long-term solutions," says Jim Campbell, an assistant director at the GAO's office of government-business operations."
(Stamps, 199
The direct sales division of Kerry Foods employs 500 people from 27 depots and turns over more than L70 million per year. In 1996, Kerry Foods decided to turn its delivery van drivers into a unified sales team. Before doing so, it asked the staff to assess the company's culture. Sue Camm, personnel and development manager, decided to conduct a culture health check. The survey found that the sales staff did not have confidence in the company's management did not feel they were treated well by the company and that the company did not value them. Camm put the whole division on a diet of improvement programs involving one-to-one meetings, training courses and incentives. One year after the initial survey, the salespeople are giving the company a much higher satisfaction rating.
People Management 5/6/99 London; May 6, 1999; David Littlefield; pp 48-50
"In establishing the Toyota Motor Corp.'s Georgetown plant, Toyota Motor Manufacturing (TMM), the issue of culture was predominant. All the mangers and general managers gathered prior to opening the plant to consider the implications of starting a new company under an established parent that has a culture that is the model of manufacturing excellence. … To create a new organizational culture without falling victim to past failures, 4 elements must be understood: 1. Organizations develop in predictable patterns. 2. The business system is culture. 3. The basic element of the culture must be employee citizenship. 4. Leadership creates the opportunity for good citizenship to emerge. When the culture is properly developed and the organization has its best competitive position, the 2 factors of development and business necessity are compatible. … TMM culture was established on the basis of a philosophy, a set of values, and a set of operating principles."
"Aided by union-management cooperation unique in its size and scope, GES achieved a remarkable culture change that has enabled it to protect jobs and become a tough, efficient, committed competitor … cost-consciousness, teamwork, and employee empowerment--vital qualities the plant had been trying to instill--had truly taken hold. … Improvising as it went along--and not missing a beat when it formally became a part of Martin Marietta in early 1993--the plant slowly climbed out of its hole. A big problem was overcoming employee skepticism. ‘It was extreme at first,’ says Mr. Smith. ‘But when we actually reached the milestones we had set along the way, trust increased. And as work began to come back in the plant, even the nonbelievers became believers.’"
"To achieve the change, the plant undertook a variety of initiatives. Among them, it flattened the organization from nine layers to three; boosted flexibility by reducing union job classifications from 26 to four; created 16 work centers backed up by intense cross-training and statistical process control; implemented MRP II; launched a performance-measurement system, featuring eyecatching displays of current data, on the shop floor; strengthened supplier relationships, cutting the number of suppliers from 8,000 to 714; and built a "Competitive Initiative Room" that serves as a nerve center of the effort."
"But if there was any one thing that helped turn the corner, management and union officials agree, it was the emphasis on communication. The plant uses all the traditional communication tools. More important, however, is the focus on face-to-face meetings, featuring a "48-hour flow-down" process in which key messages about the business are transmitted from management to each employee. All managers are trained in listening skills."
"Also contributing mightily to the culture change has been the establishment of tough stretch goals. Deliberately steering clear of "threatening" goals (a prescribed increase in productivity, for example), management and the union settled on two meaningful targets to be achieved by the end of 1993: a 50% improvement in assembly cycle time and a 25% reduction in manufacturing costs." (Miller, William H. 1994)
McVitie's is conducting a programme entitled 'The Way Forward', with a view to changing its management style and enabling workers to make a contribution to decision making. The company wanted its management to be more supportive, to determine how managers could give staff more power, and to set up teams. Through the programme it learned that it was difficult for both staff and managers to make changes and that this could not happen quickly. Some of the company's seven sites have accepted the new culture, but others are still working on it.
(Peckham and Roome, 1996)
One of the first things Doug Bennett decided to do upon taking over as president of Macmillan Computer Publishing was order a makeover of the company's tasteful, but staid, northside offices. "I want more of an Internet start-up look, not a free traditional New York publisher, which is what we have," Bennett said of the lobby, which is lined with several of Macmillan's titles, inside the sleek glass and stone building on 103rd Street overlooking Interstate 465. He's thinking maybe concrete instead of carpeting.
Worrying about the decor might seem strange for a company that has only recently emerged from several months of serious distraction following its sale by entertainment giant Viacom Inc.'s Simon & Schuster subsidiary. Macmillan was passed back and forth between British-based Pearson PLC and buyout firm Hicks Muse Tate & Furst of Dallas before Hicks backed out and Pearson took over.
Changing the scenery is just one step in Bennett's larger goal at Macmillan, which employs about 800 people in Indianapolis and, with annual sales of about $500 million, is the world's leading publisher of computer books. "We're trying to change the culture and reinvent the business, and go from being a pure book publisher to a technology-based products company," he said. (Pletz, 1999)
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