Building an Effective Organizational Culture Daniel Denison International Institute for Management Development Lausanne, Switzerland Denison Consulting, LLC Ann Arbor, Michigan USA
A milestone in the culture studies arena. -Edgar H. Schein Denison & Hooijberg s newest book illuminates the cultural dynamics firms need to manage in order to remain competitive, including: Supporting the front line Creating strategic alignment Creating one culture out of many Exporting culture change Building a global business in an emerging market Building a global business from an emerging market
Mindset is the Foundation Norms, Behaviors and artifacts. Visible, tangible. Personal Values and Attitudes. Less visible, but can be talked about. Cultural Values and Assumptions. Usually not visible at all, often held subconsciously, rarely (if ever) questioned in everyday life. Image by R.A. Clevenger
Culture Reflects the Lessons Learned Over Time Visible Symbols Lessons Culture Survival Underlying Principles http://www.youtube.com/watch?v=6_wamt3cmdk
Rituals, Habits, & Routines We must make automa+c and habitual... as many useful ac+ons as we can. The more of the details of our daily life we can hand over to the effortless custody of automa+on, the more our higher powers of mind will be set free for their proper work. William James
Hold Your Horses! Morrison s essay opens with a story of a young time & motion expert trying to find a way to speed up artillery crews during WWI, just after the fall of France. He watched one of the five- man gun crews practicing in the field with their guns mounted on trailers, towed behind their trucks. Puzzled by certain aspects of their procedures, he took some slow-motion pictures of the soldiers performing the loading, aiming, and firing routines. When he ran these pictures over once or twice, he noticed something that appeared odd to him. A moment before the firing, two members of the gun crew ceased all activity and came to attention for a three-second interval extending throughout the discharge of the gun. Since this seemed like quite a waste of time, and the young time & motion expert really couldn t make any sense of it, he asked an old artillery colonel to look at the films to see if he could explain this strange behavior. The colonel, too, was puzzled. He asked to see the pictures again. "Ah," he said when the performance was over, "I have it. They are holding the horses." Elting Morrison, Gunfire at Sea
Changing Culture By Changing Rituals, Habits & Routines Good Preserve & Strengthen Invent & Perfect Bad Unlearn & Leave Behind Rethink & Try Again Old New
Identifying Keystone Habits
Carmen Bianco at MTA: FastTrack! The New York City Subway System carries an average of 5.4 million passengers each day, 1.6 billion travelers each year! They journey 341 million miles each year over the 660 miles of track in the system. How do you do maintenance on this system without pissing off a lot of people? In New York??? In the past, they did the repair work on weekends, without interrupting service, because there was much less traffic. It was expensive, dangerous, slow, and incomplete. Until FastTrack! http://abclocal.go.com/wabc/story?section=resources/traffic&id=8495657
Building a High Performance Business Culture
What Counts Adaptability Pattern..Trends..Market Translating the demands of the business environment into action Are we listening to the marketplace? Mission Direction..Purpose..Blueprint Defining a meaningful long-term direction for the organization Do we know where we are going? Involvement Commitment..Ownership Responsibility Building human capability, ownership, and responsibility Are our people aligned and engaged? Consistency Systems Structures Processes Defining the values and systems that are the basis of a strong culture Does our system create leverage?
One Hundred Year Old Manufacturing Company 68 29 12 11 18 9 66 12 8 63 55 82
One Hundred Year Old Manufacturing Company First in industry, but declining Trying to hold on to the past 1 st time in 20 years failed to meet targets Targeted by competitors President operationally focused We re a team going down together 29 18 12 12 8 11 9 68 55 66 63 82
Creating Strategic Alignment
Global Purchasing: Executive Team
Global Purchasing: Middle Managers
Global Purchasing: Buyers
Linking Culture and Performance
Culture Predicts Business Performance Growth Innovation Customer Satisfaction Stable Performance Over Time Profitability Operating Performance Quality Employee Satisfaction
Linking Culture and Performance Study sample includes... Inclusion criteria 103 separate line-of-business P&Ls that represent a) Completed a Denison Culture Survey prior to January 2014 b) Financial data was available for same time period as DOCS 45 Private Equity Portfolio Companies
Linking Culture and Business Performance Avg. culture scores for the Bottom Half Avg. culture scores for the Top Half 2.5x greater EBITDA Growth and +5x greater Sales Growth for the Top half! Avg. EBITDA Growth 7% 17% 2.5X Avg. Sales Growth -3% 5% +5X
NGO Case Study
NGO Case Study Is our culture serving as a catalyst for achieving our Mission? Or is it acting as a barrier to our success?
Our Mission Our mission is to conserve the lands and waters on which all life depends. How do we achieve this mission? Through the dedicated efforts of our diverse staff, including more then 550 scientists, located in all 50 U.S. states and 33 countries. With the help of our many partners, from individuals and governments to local nonprofits and corporations. By using a non-confrontational, collaborative approach and staying true to our five unique core value Integrity Beyond Reproach Respect for People Communities, and Cultures Commitment to Diversity One Conservancy Tangible, Lasting Results That s how we have done more than anyone else to advance conservation around the world since our founding in 1951.
NGO Case Study
+ Right hand/left hand; failure as opportunity; Teamwork; Cooperation; Information sharing - Stakeholder feedback and contact; resistance to change; skills needed
Path to High Performance Why is culture important to the performance of your organiza5on? What is the impact? How can we ensure effec5ve and sustainable culture development? How do we translate results into though>ul ac5ons? What is your current state? How do we create common understanding? What is data telling us?
Thank You!!