The emergence of a VUCA (volatile, uncertain, complex, ambiguous) world, coupled with disturbingly high levels of employee disengagement, has directed the attention of many CEO’s to the concept of organizational culture. They are quickly discovering that traditional ‘command and control’ cultural hierarchies inhibit speed and capacity to change, fail to glean innovative ideas from all employees, and stifle engagement and accountability. Hierarchic cultures have proven to be too rigid, myopic, and entropic for strategic success in this new business world.

Winning organizations have realized that new structures and behaviors are now required to adequately absorb, roll with, and take advantage of the forces driving the world.

These are ‘white-knuckle’ times. Some decisions require crossing the cultural Rubicon.

The Illusion of Control

For many reasons, ‘command-and-control’ was never truly control—only a temporary illusion. As Barry Posner and James Kouzes argue in The Leadership Challenge, “Highly controlling behaviors—inspecting, correcting, checking up—signal a lack of trust. How do you respond to people who don’t trust you? You don’t trust them.” Without trust, there is no true control.

Many forward-thinking leaders today, while understanding that improving culture is the solution, still think in terms of ‘letting go’ of control.

This can be (understandably) unnerving for them because they remain ultimately responsible for end results. Yet research shows that fluid, positive cultures actually create higher performance through deeper and stronger relationships built on trust—which yield greater employee engagement, tighter strategic alignment, stronger agility, and resilience. This is a different yet far more powerful form of control.

What is required of leaders today is the ability to shift their mindset—to redefine their notion of what constitutes control. In an effort to ‘control’ earnings and share price, Wells Fargo Bank imposed oppressive, unrealistic sales targets on their employees. The result was thousands of false accounts set up for unsuspecting customers, widespread media coverage of the scandal, televised Congressional hearings, dismissal of the CEO, and serious damage to their 165-year-old brand. Control?

Conversely, early in the company’s history, Four Seasons Hotels founder Isadore Sharp decided consistent, excellent customer experiences were far more likely if the company was run according to the Golden Rule: “do unto others as you would have them do unto you.” Make no mistake: they had stringent, detailed operating standards for every job description as well, but gave employees confidence through intense training, and the Golden Rule approach resulted in everyone embracing and strengthening the culture. Over time, Four Seasons became the premier luxury hotel company in the world.

Use of a strong, positive culture to ‘control’ behavioral transformation does not risk the chaos many managers likely fear.

Consultant Margaret Wheatley suggests that organizational vision and values (foundations of culture) act like energy fields, unseen but real forces that influence people’s behavior. Following an assignment for a major retail firm, she concluded “the field (culture) was strong in its congruence; it influenced behavior only in one direction… the outcome was assured: outstanding customer service.”

Positive culture weaves control right into the fabric of the organization. ‘Control’ springs from deeply shared values, from peer engagement and accountability, from continual strategic conversations that keep all minds constantly focused on the strategy and vision. In effect, strong culture nurtures and reinforces self-controlled, aligned behavior at scale. The result is high-level strategic implementation and outcomes.

Leaders Must Go First

Confidently handing off control to the employee population through culture requires many preliminary steps to shift behavior (a discussion for another day), but there is one imperative: leaders must go first, starting with their own transformation.  

Many consultants have encountered intelligent, well-intentioned C-Level leaders who believe the challenge is to ‘fix my people,’ while remaining completely unaware of their own blind spots. This mindset—that others need to change but not me/us—dooms most culture transformation initiatives from the start. The simple reason is credibility. Intelligent employees are influenced by actions far more than platitudes.

What a leader says and does matters greatly: there is a 70% variance in culture that accrues to the team leader.

A colleague recently shared this story. Sadly, it represents the norm, not the exception, in large organizations:

“A manager I worked for a few years back sent an email stating that there was a new “open door” policy in place… but he had a long history of shooting down ideas. The kicker was that he sent the email from behind the closed door of his office. So clearly he read something about open cultures being more productive, sent an email, and patted himself on the back.”

Clearly, his actions had the exact opposite effect of his intentions on at least one employee (who interestingly, is no longer there), and he is no doubt still completely unaware.

Conversely, there are myriad stories of Southwest Airlines former CEO Herb Kelleher jumping behind ticket counters to tag and hoist baggage, when he encountered long customer lineups while passing through airports. The impact on employees was priceless.

Wheatley again on the retail project: “I am positive that in each (store) where customers felt welcome, there was a leader who, in word and deed, filled space with clear and consistent messages about how customers were to be served.”  

One of the most rigorous, prestigious C-level transformational leadership development programs is offered by INSEAD Business School. While they include an overview of traditional leadership teaching (definitions, models, theories), the majority of time is spent on “more serious psychological work. The aim is to increase self-awareness, overcome personal blockages, and acquire a more sophisticated repertoire of behaviors.” Their experience shows that to maximize probability of success in change initiatives, personal transformation efforts of top leaders must come first.

There’s no way around it: for genuine credibility and trust, leaders must first and consistently model the way.

Crossing the Cultural Rubicon

Once leaders begin to experience their own personal transformation, their faith in the ability of employees to do the same increases.

Chris Taylor (the Founder of Actionable.co), recently used the powerful phrase “crossing the training Rubicon.” Organizations typically invest a great deal in training for leaders and high-potentials, while failing to provide training to front-line workers, or those who sit below a certain level of the org chart.

We need to shift toward investing in, then trusting our employees—and use culture instead of top-down control methods to influence behavior. Courage and faith are required of the leader, because once you fully commit to developing a winning culture, there is no turning back.

Pushing authority, ‘ownership,’ and decision-making to line level is difficult, relentless work. Once employees are engaged, energized, competent, confident, and collaborative, hierarchical ‘controls’ can never be re-imposed. But you won’t want to go back: the upside will be an agile, resilient and innovative capacity, impossible to achieve under the old organizational culture.

Whatever hesitancy and resistance to radical change might be experienced by the leader will likely be magnified in the employees. They too will require courage and confidence to move in the new direction, to ‘cross the cultural Rubicon’—and will look to the leadership for clarity, training, support, communication, encouragement, and most importantly, inspiration.

When considering your organization’s need for cultural transformation, here are some suggested actions for reflection and discussion:

  1. Ensure your own self-awareness activities and clarity of values send the leadership message you intend. walk your talk. Test for credibility. Start with you.
  2. Transfer your own inspiration and energy to your people (town halls, videos, walking around, time with employees/customers), sharing your vision of “where we’re heading, and why.”
  3. Foster and reward regular vertical and horizontal communication at all levels, especially across silos.
  4. Conduct a ‘gap’ analysis to identify learning, training, and skills needed for the desired culture.
  5. Clarify and constantly reinforce your values and vision: translate them from general concepts into specific actions with individual accountability.
  6. Measure those actions regularly.
  7. Schedule continual discussion of best practices within the context of your business challenges and opportunities. Ask “How can we apply this new information to fix OUR problem?”
  8. Use inevitable errors and stumbles as ‘learning lessons’; get comfortable with heuristic learning.
  9. Remember that organizations, as collections of humans, are living organisms. Change never stops. The leader’s task is to energize and guide towards the vision.

The Moment of Truth

Should you doubt the power of culture to deliver results, this story (only one of many) may help: a Four Seasons hotel in a major US city was asked to cater a high-end charity dinner in a luxury shopping center. Many of the high-profile attendees were regular Four Seasons customers, and servicing such an event outside of the hotel proved a risky challenge. Two days prior to the event, they learned that the make-shift kitchen would have to be moved three floors down, meaning long treks and service elevators would be required: timing became a serious quality issue.

The hotel put out a request to employees for volunteers to help run the food to the service staff three floors up. Bellmen, concierges, engineers, and valets volunteered to work after their regular shifts. A housekeeping room attendant showed up with her two teenaged sons. Staff literally ran with food trolleys to freight elevators, in perfect relay teamwork, to get cold food out cold, and hot food out hot. Guests never knew anything had gone amiss—the event was an outstanding success, and quickly became one of the legendary stories of employees. Powerful culture at work. How could such committed behavior ever have been mandated from above?

Peter Drucker wrote “culture eats strategy for breakfast.” He was right. How can a company with disengaged employees compete with this?

There are few if any organizations today that can afford to retain slow, dysfunctional structures and management systems. Maintaining the status quo likely means stagnation and death. As the leader, you must take your organization across the cultural Rubicon. Will you?

 

Cultural Rubicon