Organizational culture isn’t just a hot topic–it’s an untapped asset and potential liability for all businesses. And yet, for all its potential to make or break, few know how to manage cultures with proficiency. In her newly released book, Culture Your Culture: Innovating Experiences @Work, Karen Jaw-Madson provides the much needed, step-by-step, “how-to” for designing, implementing and sustaining culture. Karen is principal of Co.-Design of Work Experience where she focuses on culture and organizational change.
We recently had the opportunity to ask Karen some of our own questions.
A 2015 survey from Columbia Business School and Duke University found that out of almost 2,000 CEOs and CFOs, 90% said corporate culture was important, but only 15% felt that their culture was where it needed to be.
Would you give a quick synopsis of DOWE? What is it and how does it work?
Design of Work Experience (DOWE) is a concept and methodology that partners employees and their employer to co-create, implement, and sustain culture. DOWE is comprised of four main components: the combination of DESIGN and CHANGE processes enabled by leveraging and building CAPABILITY and ENGAGEMENT throughout. When you dig deeper, the process is further segmented into 5 phases: UNDERSTAND, CREATE & LEARN, DECIDE, PLAN, and IMPLEMENT. All the phases are organized as a series of iterative learning loops, each with its own specific set of activities.
4 Components of DOWE
Is there one of the four components of DOWE that is more difficult than the others?
The difficulty (or ease) with any aspect of the DOWE process would depend on the individual organization–their current strengths and capabilities, as well as their current context. For example, a company used to constant change may find the change process more familiar than one that has not experienced a lot of change. Another may be dealing with apathy, so engagement may be a challenge, and so on and so forth.
What do leaders need to know about identifying the barriers to change?
In our experience, executives face a fundamental conflict: Change requires a sense of urgency while highly-efficient organizations tend to have high levels of inertia. When business is going well, managers and employees generally only pay lip service to change requirements. Knowing that, there are three barriers we’ve identified:
The good is the enemy of the better: Efficient, currently successful organizations often slow down the necessary change: Why cannibalize what is successful today? Why destroy efficiency gains of a ‘well-oiled machine’?
Watch out for your top team: Ironically, today’s most successful managers might be the ones slowing down your transformation efforts since they have the most to lose. Transformation needs to start with the person at the top, and it’s often those who have grown accustomed to success that find it most difficult to change course.
Your DNA takes time to change: Don’t underestimate the time and effort required to change deep-rooted mindsets and ways of working. Your legacy business exerts a natural gravitational pull that will stop all meaningful change unless you’re persistent and change at enough scale to break through
“Transformation is often more about unlearning than learning.” -Richard Rohr
What is the role of the CEO when it comes to digital transformation?
The successful digital transformations we see out there have one common denominator: the CEO spearheading and promoting the digital transformation. They are making it front and center of their personal agenda. Only if change is demonstrated and exemplified by the top management will the necessary changes to structures, processes, management instruments, as well as the establishment of new skills and new IT systems, be successful. That can mean using new technologies, challenging existing ways of doing business, and making the bold decisions necessary to change the trajectory of the business.
Assess Your Readiness
How can management assess the current strategy of the company and its readiness for digital transformation?
That’s two questions. The first is understanding your strategy, and that requires looking at sources of value – where they’re created in your business and in your sector. Most important, you need to look at where sources of value are being created outside of your sector – that’s where some of the biggest changes (and challenges) might be happening.
Then you need to look at where you are today and what needs to change. There are lots of assessments and diagnostics out there, but you need to take a cold-eyed view of where you are as a digital business and what needs to be in place to drive value at scale. As an example, we have developed a comprehensive benchmark to derive a company’s Digital Quotient (DQTM), road-tested with several hundred organizations across the globe. It helps leadership to take stock compared to best practices across sectors and within its own industry.
In addition to the benchmark, some questions that management should start with to determine the urgency and their organization’s readiness for change include:
Are we assessing whether we can use our strengths to penetrate completely new industries within the current rules?
Are we actively creating an ecosystem of partners, customers and suppliers that will last into the digital world?
Have we defined a feasible timescale and meaningful KPIs to reliably measure success or failure?
“Transformation literally means going beyond your form.” -Wayne Dyer
One of the most important skills of a leader is managing and accelerating change. What makes change stick or fail is a fascinating topic, one that most new leaders struggle to understand. Mastering the art of change is a challenge and yet one that is well worth the investment. Because all great leaders are change agents.
Kendall Lyman and Tony C. Daloisio studied change for the last decade and have packed their key takeaways and learnings into their new book, Change the Way You Change! They outline the five roles of great change leaders. If you want to accelerate your leadership and improve your results, this book is a blueprint on how to orchestrate your change efforts.
In your book, you talk about five roles for change leaders. Is one more commonly a problem for a leader than others?
This is a question leaders ask us a lot, probably because they are so busy running the business that it’s hard to think about improving their leadership. We have found that each role of leadership has its unique challenge. For example, the FOCUS role requires a leader to get everyone on the same page and pull in the same direction. And the ALIGN role requires leaders to ensure that all of the processes, structure, and systems are aligned to the direction of the organization—a daunting task to say the least. But the role of leadership which is probably the hardest, takes the most time, opens up the organization for pushback, and has the most potential if done effectively is the ENGAGE role. Most leaders who put a lot of energy and money into the diagnosis and design of a new organizational solution are so excited to implement the new idea that they take very little time to syndicate that direction with key stakeholders either during design or before execution. True engagement done well holds the key to open the minds, hearts, and hands of employees required to implement by helping them change and adapt to make the new solution a reality.
“The world fears a new experience more than it fears anything.” –D.H. Lawrence
How is your approach to change different from others?
In all the books we read, the authors (and many change practitioners) argue that change starts one way or another. Some say that change starts with individuals. Others claim that individuals can’t really change until the organization does. But after helping lead transformations for years, we asked ourselves, “How does change really happen? Does change happen from the inside-out or from the outside-in?” In other words, is the most effective way to change an organization accomplished by helping individuals change so they, in turn, can change their teams and the organization (inside out)? Or is the best approach to improve the organizational elements of strategy, processes, and structure, and then expect teams and individual behavior to align with the changes to deliver better results (outside-in)? And we asked, “Does it have to be either/or?” After many years of considering this question and approaching change using one approach or the other, we have found that the answer is “no.” Instead, for change to be sustainable, it requires both an inside-out and an outside-in approach. To change a team or business, a leader must change both the thoughts and beliefs and the structure and systems. And to get it to stick, all levels of the organization (individual, team, and organization) must be focused, aligned, and engaged on the same thing—and that takes leadership!
“Nothing is so dear as what you’re about to leave.” –Jessamyn West
At the beginning it was called administration. That is why MBA stands for Master of Business Administration.
Over time “administration” was found to be too limiting as a concept. It was delegated to low level supervisory and bureaucratic positions, and the concept of management was born. Business Schools across the country changed their name from Graduate School of Business Administration to Graduate Schools of Management.
The concept of management was not yielding the right understanding of the process of transforming organizations, and the concept of Executive Action was born. Titles such as CEO, CIO, CMO etc. appeared like mushrooms after the rain, and executive programs emerged in the market place.
Still not good enough to explain how organizations should be transformed, the concept of leadership started dominating the literature.
What is going on here?
Administration, Management, and Leadership have a common purpose. They are theories that prescribe how organizations should be transformed and how to manage change. They are all based on the same paradigm of individualism, that a single individual is the driving force of this transformation, whether it is called Chief Administrator or Manager or CEO or Leader.
“The achievements of an organization are the results of the combined effort of each individual.” –Vince Lombardi
As long as we remain with the same paradigm, no concept will be satisfactory. We will continue to change titles, embellish concepts and continue to chase our own tails, reinventing the same wheel from administration to leadership. Leadership will be assigned its place in the annals of social sciences next to management and administration.
Individuals cannot transform organizations. It is a team process.
No individual possesses all the ingredients in his or her personality that are necessary for successful management of change.
“Individuals cannot transform organizations. It is a team process.” -Dr. Adizes
What makes businesses vulnerable to disruptive change?
There are 2 main messages in my book.
First, that while we think the world is changing rapidly, in fact, we continue to rely on a platform that arose from the invention of 3 general purpose technologies in the 1870’s: the internal combustion engine, the light bulb, and the telephone. Even with the computer and the Internet, we have spent decades boxing in this amazing new technology to fit our paradigm need for a faster, smaller, cheaper phone. So, while we think we are in the midst of rapid change, the western world is in fact obsessed with ensuring we stick with the old world and reward refinements of tired mature ways of doing things. When real change comes, will business leaders be prepared? I don’t think so.
One of the reasons why we won’t respond well when real change comes is that while ideas are abundant, small start-up ventures lack the resources – people, money, physical assets — to launch these ideas. They also lack the credibility, networks, access to customers, suppliers, government officials, etc. This limits their ability to move these ideas forward, no matter how great they may be. At the same time, existing companies are flush with people, money, networks, customers, and, most important, credibility and brand value. But what they lack is an entrepreneurial mindset. To move forward, companies need to resist the rhetoric of finding and sticking to a narrow form of sustainable competitive advantage, and instead adopt a model of strategic entrepreneurship that promotes transformational growth and longevity.
The fundamental impact of disruptive change is that our organizations are not built to manage change very well. Through principles such as sustainable competitive advantage, we tend to use fixed mindsets that build a sort of impenetrable armor around the firm’s processes and procedures, instead of being flexible and adaptable. When disruptive technologies or business models present an alternative, firms resist. Indeed, even customers often resist, as we remain stuck in our paradigms formed as noted above. However, in time, customers adapt because they do not have the level of sunk investment in the old ways that companies often do. Time and again, rigid non-entrepreneurial firms fall by the wayside.
There are many very extreme examples of this phenomenon. Think of Kodak, which is a firm that actually pioneered digital photography, but in the end was unable to adapt to this powerful disruptive technology.
“Progress is a nice word we like to use. But change is its motivator. And change has its enemies.” –Robert Kennedy
How can large organizations embrace a spirit of entrepreneurship?
I emphasize the importance of adopting three points:
Recognize that opportunities are developed at all levels of the organization.
Build a culture that embraces and supports entrepreneurship.
Consciously develop support for entrepreneurial initiatives through effectual processes or bricolage.
The key is leadership, not only in words, but in action. It is imperative that the CEO endorse an entrepreneurial culture by example – championing new ideas. In fact, a failure or two is good because it demonstrates that even the CEO recognizes that not every entrepreneurial idea is destined for success, and it is important to manage your investment and ensure that no one new venture will take down the ship.
“Culture eats strategy for breakfast.” –Peter Drucker
What are the elements of a good corporate culture?
There are many theories on this question, and I included quite a few in my book. In the end, the key elements are:
Provide open opportunities for opportunity development – these include group time (because we know that mixing people with diverse expertise and background can lead to innovative solutions), plus unstructured open thinking time (such as 3M’s famous “tinkering” time).
Adopt a learning culture – growth mindsets are essential, pursuing what could be as opposed to why this won’t work.
Accept failure, and the importance of learning from failure.
Adopt bricolage (known outcomes, with unknown ways of getting there), or effectuation (building on invention, experiment, and science) as frameworks for pursuing each entrepreneurial initiative (purposefully).
“The only sustainable competitive advantage is an organization’s ability to learn faster than the competition.” –Peter Senge
How do leaders encourage creativity at all levels of the organization?
The first thing I would say is that leaders must recognize that organizations need time to change. This is not an overnight process and will require considerable and repetitive actions and wins to change. And failure is a key component – an organization can move far closer to being creative and adopting entrepreneurial thinking by showing that a person with a great idea that failed in implementation is celebrated as thinking outside the box, rather than penalized for failing.
Researchers have studied the importance of story-telling in organizations, and how a lasting culture can be built around well-known, maybe even legendary, stories that come from the history of the organization. The dimensions of story-telling I describe in my book include equality (versus inequality), security (versus insecurity), and control (versus lack of control). Through story-telling of actual events that happened in the organization’s history, employees are able to gauge whether the organization will endorse or shun creativity at all levels.
“Successful innovators are..not risk-focused; they are opportunity focused.” –Peter Drucker