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TCPI News Vol. 3, No. 8

August 3, 2004

In this issue:

  1. When Does a Corporate Culture Need To Change? 
  2. How Can You Change Corporate Culture?
  3. Seven Steps To Keep In Mind When Deciding To Change Corporate Culture.

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1. When Does a Corporate Culture Need To Change?

Most organizations have a mission, vision statement or strategic plan that they place prominently on their website or other marketing materials. For example, Hewlett Packard has “the HP way” and Southwest Airlines spends a lot of time on creating a workplace culture that is visible through their commercials and on their planes. However, does the way the employees operate match the leaders ideas, values and statements?  When the employees are going about their work in their own way are they actually undermining the organization’s performance? When does an organization need to change the culture? Here are some signs of an unhealthy corporate culture:

If an organization displays any of these characteristics then it is probably time for a change. The Strategic Change Group in Malaysia studied nearly 300 Asian companies. They concluded that change was warranted if one or more the following factors are present:

The negative effects of not taking action quickly range from low morale, high turnover and customer complaints to lost business and unhealthy business practices. Organizations are constantly in a state of flux. Each new employee or new customer adds a different dimension to the current structure. New technologies can add new ways of doing things that might not be in the current culture. The most effective companies initiate a change in the organization’s culture before unfavorable conditions are out of control.

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2. How Can You Change Corporate Culture?

When an organization makes changes, there needs to be attention to the underlying culture that created the way that things are currently done. An organization’s culture is defined as the collective and unconscious attitudes, beliefs, values and behaviors that define how the business operates and why certain things are done. Edgar Schein says that “each organization has its own way of doing things and outsiders bring their own baggage with them.” The ways that various organization define how they “do things” can give us insight into how they control behavior within the organization to fit with their culture. Here are several ways to look at how behaviors within an organization are controlled.

Answer the following questions  “yes” or “no”.

1. Organizational members are encouraged to be innovative, creative and take  risks. ______ 

2. Members of the management team focus on long term big picture. ______

3. Management focuses on outcomes, goals and results rather than the processes  techniques or methods used to achieve these results. ______

4. Decisions on organizational members and relationships are emphasized over task accomplishment at all costs.   ______  

5. Activities are organized around teams rather than individuals. ______ 

6. Managers and employees are concerned about customer satisfaction and service  rather than individuals.  ______

7. The organization focuses on and is adaptive to changes in its environment.   ______

8. Individuality in the organization is encouraged and tolerated.  ______

9. Lower level employees are encouraged to make and implement decisions without approval from top management.  ______

10. Cooperativeness and team spirit is encouraged versus individual competition and political posturing.  ______

The more marks in the “Yes” column show a more progressive and open environment for change. More marks in the “No” column would indicate that your organization is set in their ways and might be resistant to changes. Look at the following behavioral controls and see where your organization fits.

These are not all the ways that behaviors are controlled, but these can be applied to almost any industry. By looking at how the behaviors are controlled, you can see why and how your company responds to a variety of issues.

With the changing economy, many leaders say that they need to change the culture to get ahead in the market place or become more globalized. But before that can happen, the underlying mechanisms that drive the behavioral patterns, norms and social values, need to change. This is difficult.  For example, if a manager determines that the sales force needs to be more customer-focused, this can only be accomplished by changing the way that the organization currently looks at the customer relationship. Simply Creating a plan and implementing new rules won’t get it done. There needs to be a symbolic action that sends a message to the members.

More information on TCPI’s custom programs.

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3. Seven Steps To Keep In Mind When Deciding To Change Corporate Culture.

In the previous article, the concepts of the behaviors and social values that define the culture were discussed. In order to initiate a change there needs to be a plan of action so that its not just ideas that never get implemented. Following are the seven steps that one needs to take when deciding to create a change in the corporate culture.

  1. Set a clear vision and strategic direction
    1. Helps organization decide where to focus its resources
    2. Role of leaders needs to go beyond setting the vision; it must communicate and change the mindsets of the people towards winning their commitment towards the new direction of the company.
  2. Develop clear performance measurements.
    1. Translates the vision into measurable results for various divisions, departments or strategic business units.
    2. Leaders of various divisions will openly discuss the results they desire.
    3. Results need to be specific and until performance indicators are set for every level of the action plan that are agreed upon by leaders and the people, the vision is not implementable.
  3. Develop clear performance measurements.
    1. Translates the vision into measurable results for various divisions, departments or strategic business units.
    2. Leaders of various divisions will openly discuss the results they desire.
    3. Results need to be specific and until performance indicators are set for every level of the action plan that are agreed upon by leaders and the people, the vision is not implementable.
  4. Follow up on achievement of goals.
    1. a)If goals are not met, the leaders need to find out why and drive the members to reach the goals.
  5. Reward performance on a fair basis.
    1. Rewards include financial, personal acknowledgement, praise and feedback.
    2. If the results are clearly defined then rewarding people for their efforts is not difficult.
  6. Create a more open and transparent work environment.
    1. An open environment where employees can share ideas and exchange freely will facilitate the achievement of organizational goals.
    2. In meetings or discussions, leaders who do not encourage openness will not get feedback that could be helpful in achieving goals.
    3. If there is not openness then new ideas are not generated.
  7. Control company politics.
    1. Company politics hinder the development of a trusting relationship between people.
    2. Organizations need to develop an internal environment that promotes openness, honesty, discussion and team harmony.
    3. Feedback should be used as a way of improving performance and not in a negative manner.
    4. Leaders need to take an attitude of no tolerance towards activities that encourage disharmony.
  8. Develop a strong team spirit through a set of core values.
    1. In producing a conducive and productive work environment, people need to commit to a set of shared values for the organization.
    2. These values must allow people to experience a sense of achievement but also correctness that are contributing to the overall good of the organization.
    3. Some of the core values that can be encouraged are: innovation, fairness, respect, customer-focused, change, responsiveness and accountability.

No guarantee, but these seven steps can be applied to almost any industry and organization. By taking the necessary steps and planning carefully you have a better chance of succeeding.

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Upcoming newsletters

We will be focusing on an area of business culture and how it differs across the globe. Inter-cultural communication is a topic that has a lot of relevance with so many companies creating offices in foreign countries, having foreign sales force or even relocating their customer service to a call center in another country. America has many competitors in the business world and how successfully one handles inter-cultural issues can make or break a deal. Next month, the topic will be the differences in behaviors and attitudes during meetings across several cultures.

Win a book!!!!!!!!

Answer the following true and false questions correctly and win a copy of Dr. Marvin Gottlieb’s book, Making Deals that deals with inter-cultural negotiating.

  1. Australians don’t like business cards presented at the introduction. (True/False)
  2. The work environment in Australia tends to be collaborative. (True/False)
  3. If your company is very old or prestigious, have this on your business card when giving it to a Chinese person. (True/False)
  4. You will need a senior member of your organization in a meeting that takes place in China. (True/False)
  5. Detailed planning is a principal characteristic of German business culture. (True/False)
GOOD LUCK! The first person to email back to wins a copy of the book!!!!!!

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