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Can You Fix a Broken Business Culture?

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By: Victor Assad, CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne
Or is it nearly impossible? Instead,
should you just focus on fixing your business, and the rest will follow? 
These are the questions raised by
a recent Harvard Business Review article
by Harvard Professor Louis E. Kirstein and research associate Emily McTague.[i]
After conducting interviews with excellent CEO's, including Doug Baker, CEO of
Ecolab, Richard Anderson, CEO of Delta, Alan Mulally, former CEO of Ford, and
Dan Vasella, Former CEO of Novartis, the authors believe that 'Culture isn't
something you 'fix'. Rather'culture change is what you get after you've put new
processes or structures in place to tackle tough business challenges, like
reworking an outdated strategy or business model. The culture evolves after you
do the work.'
Culture can't fix a faulty business model and successfully implementing
a new business model can't happen without the tough work of managing change.

I believe the authors are partly
right. Fixing culture, which includes strong change management, won't fix a
broken business model or poorly timed or simply wrong business strategy. In my
experience, many executives believe they are fixing their business by
announcing a new business model, strategy or structure only to walk away from
the tough work of implementation.  Unfortunately,
they don't have the patience or stomach for it. That is why they fail. The
tough work includes change management and yes---changing the organization's culture.
The CEO's listed above had great business strategies. They also did the
tough work of managing change and changing
the culture of their workforce.

When implementing change, whether
it is for a new business model or to ignite innovation, you cannot ignore the
culture of your employees. Their culture is different from the reality and
culture of the executive team and even the culture of middle management.
Despite your level of affability, delegation and involvement, you are an
outsider of your employees' culture, due to your executive position. Don't be
delusional about this. Once you accept this, you will be better prepared mentally
and emotionally to listen to their fears and concerns.
When implementing a major
organizational change, and after you explain your strategy, invite your
employees to ask questions. Then, articulate what will change in the new
business model, what will not change, and how employees can now succeed.[ii]
Here is how two of the CEOs in
the HBR article succeeded'using change management principles!
The HBR article describes how the success of Eco Lab CEO, Doug Baker.
Eco Lab completed 50 acquisitions over 10 years to offer customers more
products and services. The unintended result of the acquisitions was
organizational complexity, multi-layered management structures, increased
bureaucracy and siloed management. This distracted management from its customer
centric-culture.  To counter the
distraction, Mr. Baker pushed decision making to the front line employees who
worked directly with the customers. He did this by using common tools for
change management, including management and employee training, and constant
customer and employee feedback. The feedback helped Eco Lab tweak their
implementation. He also used recognition, bonuses, and promotions to reward those
managers and employees who accelerated these changes.
At Ford, CEO Alan Mullally, took
over a company on the brink of bankruptcy. Ford had a cutthroat and aggressive management
culture, which protected its own turf to the detriment of the company. His
strategy to fix the situation was to make management work more collaboratively.
The authors describe how Mr. Mullally implemented regular meetings of
management from different Ford units to share updates, assess their performance,
and identify and resolve issues collectively before they became intractable. He
built a culture of personal accountability, where managers had to explain their
problems, solutions to fix them, and their progress.  He succeeded in creating a more collaborative,
results driven, aligned culture, which is required to successfully implement
business strategy, make change, and accelerate innovation.
Business Change Doesn't Happen on Its Own.

I agree with the HBR authors that executives need to
articulate a clear business model, strategies, and structure before they can
fix an organization. But organizational change doesn't happen on its own. Executives
need to stay involved in order to ensure that middle managers and employees
have clarity on roles, responsibilities, and decision rights. Both middle
management and employees must have the permission to share information and
alternative solutions, and the guidance on how to succeed in the new business
model and culture.  This requires a dedication to managing the change as well as changing
the employee culture.

What has been your experience? Join the conversation?

Victor Assad is the CEO of Victor
Assad Strategic Human Resources Consulting and is a Managing Partner of
InnovationOne. He consults on talent management, leadership development and
coaching, innovation, and other strategic initiatives. Please e-mail
Victor at victorassad6@gmail.com or visit
For innovation visit 

Jay W. Lorsch and Emily McTague (April 2016) 'Culture is Not the Culprit,' Harvard Business Review.
Changing employee culture is described well in Stan Slap's book, Under the Hood.

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