When my copy of the April 2016 issue of Harvard Business Review arrived in the mail, the headline across the front cover, in bright orange type, resonated with me: “You Can’t Fix Culture”. This is a message I have been preaching for years. Focus on your business, not its culture, and the rest will follow. Culture isn’t something to be “fixed”. Rather, if you focus on business fundamentals , the cultural change necessary for success will follow. In short, culture is the effect, not the cause, of business performance.
This is a hard-learned lesson. I am both amused and bewildered by the number of business leaders who, emboldened by a plethora of books and articles focusing on changing organizational culture, cling to the notion of “culture as the cause and the cure”, as the authors of the HBR article so eloquently state.
Several years ago a large, multinational firm was in the process of acquiring a closely-held, South American business with a strong “command and control” culture. The acquiring company had hired my firm to help them determine how best to assimilate this closely-held business into the parent organization, with its meritocratic, empowering culture.
If we had focused first on trying to change the culture of the acquired business we probably still would be trying to accomplish the impossible, just as calls by pundits to “fix” the culture of organizations as far-reaching as General Motors and the Department of Veterans Affairs have fallen flat. That approach just doesn’t work. It never has.
Rather, we focused on business fundamentals, following a process that is best described as shown here:Culture is the embodiment of the collective mindsets and behaviors of the organization’s members, driven by its leaders through the setting of goals and expectations, the establishment of metrics and decision rights, and the way in which the organization’s members are held accountable and rewarded, or not, for their actions. It is only through focusing on the fundamental drivers of culture, not on culture itself, that organizational change occurs.
By focusing on these fundamentals, instead of trying to fix the company’s culture, we were able to help our client achieve their objective of successfully assimilating the acquired business, with a long history of top-down control, into their transparent, empowering and meritocratic organization.
And we did it, by the way, one business unit, one group, one person at a time, helping each individual understand, through front-line empowerment and the establishment of clear-cut goals, metrics, accountability and reward structures, why it was in their best interest to change.
This is the way to effect culture change in an organization, not the other way around.
Reference: Jay W. Lorsch and Emily McTague, “Culture Is Not The Culprit”, Harvard Business Review, April 2016
For over thirty years, Mike has been actively involved, as a coach, entrepreneur, scientist, business executive and management consultant, in the areas of executive leadership, organizational development and change management, strategic planning and execution, and financial analysis. He has provided strategic, operational and financial leadership to small and medium-sized firms, as well as Fortune 500 companies and large government organizations, in a broad range of industries. Mike holds BS and PhD degrees from the Georgia Institute of Technology and has had additional training in finance and accounting, strategic planning and management, leadership development, and succession planning, from various top-tier institutions.