Culture - Hay Group

On the wave
of change
CULTURE OF AGILITY
By Nicholas Conigrave
and Jeff Shiraki
Nicholas is focused on helping CEO’s and their teams
align the organisation to effectively execute their
business strategy. He works with executive teams
to help them deliver growth through improving
organisation capability and alignment, successful
execution of mergers and acquisitions and effective
change management.
Jeff Shiraki is a Vice President with Hay Group with
over twenty years experience working with clients
to help them clarify business strategies and align
organisation structures, culture and management
practices to improve business results. He holds
a Master of Public Policy (M.P.P.) from Harvard
University and an M.B.A. from the University of
California, Irvine.
Culture of agility
The biggest impediment to agility is the culture of inertia, but cultural change is
possible to generate long-term sustainable performance with the right strategy.
Agility runs counter to the prevailing culture in
most organisations. This means that organisations
will need to focus energy on evolving and shifting
their culture if they are to build more agile
organisations that are enabled and capable
of catching the current wave of change.
Culture in business represents ‘how things are done’
and organisational cultures are important drivers of
employee behaviour, particularly when employees
must be relied upon to act on their own initiative,
in a way that is consistent with the company’s
objectives, strategy, and values.
Culture as a barrier or enabler
to agility
An investigation into seven years of Hay Group’s
global culture research has shown the problem
with most organisations is that their current culture
is a barrier to creating a more agile organisation.
That’s because the top-ranked cultural attributes
paint a picture of very command-and-control
cultures that exist in most organisations. The
current cultures were found to consistently encourage:
1. Supporting top management decisions
2. Respecting the chain of command
3. Supporting the decisions of one’s boss
The lowest-ranked cultural attributes are some
of the cultural elements one expects to see in more
agile organisations. The current cultures were found
to consistently discourage:
1. Significantly decreasing cycle times
2. Pushing decision-making to the lowest levels
3. Finding novel ways to capitalise on
employee’s skills
These findings show that the dominant culture in
most organisations flies in the face of what it takes
to make an organisation agile and able to more
effectively adapt to its environment.
... organisations
will need to focus
energy on evolving
and shifting their
culture if they are
to build more agile
organisations...
“
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Local norms also
act as a barrier to
cultural change,
with the ‘she’ll be
right mate’ attitudes
common in the
workplace.
“
A culture of inertia
In Australia and New Zealand, there have been
many cases where successful companies have
ignored fundamental shifts in the market and
waited too long before re-aligning their culture
to help achieve business results. Whether it’s
traditional media organisations, paper-based
search companies, or retailers not looking towards
the internet, by the time they try to change their
business model or strategy, it is too late, since
a ‘culture of inertia’ locks them in place.
Local norms also act as a barrier to cultural change,
with the ‘she’ll be right mate’ attitudes common in
the workplace. In an increasingly volatile globalised
world, this type of attitude can no longer prevail.
The time to act is now
As leaders in the organisation, CEOs and executives
have the capacity and the responsibility to shift
the culture in their organisations by understanding
their role in shaping the culture to better align with
the needs of the strategy. This can be personally
challenging as it requires executives to look at
their own values, beliefs and behaviours in the
organisation and question whether they are still
relevant and appropriate for the times. This may
involve blowing up their business model and
fundamentally rethinking the organisation’s
value proposition.
It is difficult to tackle culture change head on.
Culture change is a journey which takes time,
and involves being deliberate about where your
organisation is heading. It is about identifying the
different levers – the practices, norms, symbols,
processes and behaviours – influencing culture, and
by changing these levers culture change occurs and
is sustained over time.
Simply sticking to what you are good at and hoping
for the best is not good enough anymore – leaders
need to act to develop and evolve their organisation
culture to ensure that it supports and enables
their staff to change the way they do business and
continue to meet the needs of their customers. That
is the recipe to long-term sustainable performance.
Key steps to achieving culture change
■
■
■
■
Understand the strategic requirements of
your organisation: what type of culture is
needed to deliver the short and long-term
results you desire?
Define the types of behaviours that will
be required to help the organisation
be successful.
Prioritise the change levers that will produce
the most impactful culture change.
Focus on systematically implementing
those catalysts for change over time.
Culture change is a journey
which takes time, and involves
being deliberate about where
your organisation is heading.
Watch Nicholas summarise the key points of his article
CASE STUDY:
IBM’s culture change journey
The success and longevity of IBM can be attributed
to the organisation’s ability to change. IBM has
learned over a century that culture isn’t just one
of the tools of management; it is the purpose of
management. The company also understands that
words in corporate value statements, as powerfully
as they may be expressed, are empty platitudes
unless they are acted on rigorously and consistently
in day-to-day business activities.
Tom Watson Jr., the former Chairman and son
of IBM’s founder, once said, “I believe that if an
organisation is to meet the challenges of a changing
world, it must be prepared to change everything
about itself… except those (core) beliefs… as it
moves through corporate life.” At IBM, those
words are taken to heart, and are embodied
in the organisational culture.
In an age of unprecedented change and complexity,
this sentiment remains both true and relevant
to today’s IBM. One of the key competencies
that IBM looks for in its leaders is the ability to
‘continuously transform’ what they do and how
they do it. Another key leadership competency
is strategic risk taking. “You can’t transform a
business without taking risk”, says Andrew Stevens,
Managing Director of IBM Australia and
New Zealand.
At the heart of change and risk taking is innovation.
IBM encourages innovation that matters for the
company and for the world, developing intellectual
property that has future application and innovation
that solves problems in the community. This
innovative application of technology means that
work has shifted from creating innovative products,
to the services business of helping clients realise
their full potential, in business or the community.
While these competencies are expected at the
leadership level, IBM recognises the need to build
future leaders by empowering front line staff with
the ability to make decisions and resolve problems.
Decision-making is therefore pushed right down
to front-line staff. “All large organisations have a
level of contention in them. That contention is best
resolved as close to the client as possible”, says Stevens.
In Australia and New Zealand, the organisation model
is designed on this theory, with the matrix structure
enabling front-line employees to resolve problems
and to develop and implement solutions locally.
Scan the QR code or go to:
http://www.haygroup.com/au/focus13video6
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