How to change corporate culture to be more open to change

Technology adoption strategiesChange management is hard. As a general rule, change adoption rarely, if ever, happens overnight by simply adding a new process or technology and holding a few training sessions.

In a recent blog post (in Finnish only, sorry), Marko Suomi argued that people in organizations in general act according to the technology adoption lifecycle: some are very enthusiastic about new changes whereas others are much slower to adopt them. It is important to note that the enthusiasm of individuals varies between changes too: even a person who is generally an innovator usually does not adopt all changes first.

In this post, I wish to delve a bit deeper into how changes are adopted in organizations and what the management can do about it.

Geoffrey Moore’s five responses to new technologies

In Geoffrey Moore’s version of the technology adoption lifecycle, the five groups are named in a somewhat more down-to-earth manner:

  • Techies – Just try it!
  • Visionaries – Get ahead of the herd!
  • Pragmatists – Stick with the herd!
  • Conservatives – Stick with what’s proven!
  • Skeptics – Just say no!

I’m sure these attitudes to change resonate with everyone: we might even display all of these attitudes ourselves, depending on the change.

According to the technology adoption lifecycle, the distribution of these responses in a population follow the normal distribution. However, for any individual company, this might not hold true!

What is your company like?

The most obvious deviations from the norm appear in small companies. Think of a visionary startup where the people involved have come together precisely because they want to venture into the unknown and try out new things. Contrast this with a (stereotypical) government agency, where all change is considered bad by default.

Most companies probably fall somewhere in between (and the normal distribution applies), but is this a necessity? Is it inevitable that as a company grows, it will exhibit a clear spectrum of all approaches to change?

My claim is that while it is reasonable to work with an assumption that the normal distribution holds true if you do not know the company, it is not inevitable that approaches to change are normally distributed nor should the management of the company remain satisfied if they are.

Recruitment and culture

Perhaps the most obvious way to change the distribution is to do so through recruitment: if you recruit innovative people, surely the company will become more innovative as a result?

However, even this road is not an easy one to travel. If the company lacks a culture of improvement, the innovative people will become frustrated and either stop trying or leave. Furthermore, it is unlikely that you will be in a position where you can recruit so many people at once that the culture change can take place through recruitment, and even if you do, you might not be able to control it and the new culture may end up being undesirable as well.

Thus, the only viable path that is available is to work through changing your corporate culture. A good starting point for most organizations is John Kotter’s 8-step process for leading change.

If your organization is extremely reluctant to change (the number of conservatives and skeptics considerably higher than usually), you might even need to start from more basic things: getting the management to go where the work is done, discover minor annoyances that hinder people in their daily work, and remove those obstacles at an increasing pace to convince people that changes are possible before venturing on a major change program.

Kotter’s 8-step process for leading change

Kotter’s 8-step process has been around for a while, and it provides a good starting point for culture change, but companies still often struggle with it.

In brief, the 8-step process is as follows:

  1. Create a sense of urgency. Unless people are concerned that a change is needed, they are often unwilling to embark on the journey to major changes. Unfortunately, companies routinely fail even on this stage. Successful companies tend to fall victims to hubris and recognize the need for change only years after their downward path has started. Examples abound: Harley-Davidson in the 1980s, Motorola in the 1990s, Nokia in the 2000s. Luckily, it is usually not too late to achieve a turnaround even if the problem is recognized quite late (Harley-Davidson is a textbook example of a successful turnaround).
  2. Build a guiding coalition. A uniform guiding coalition with sufficient power and energy to lead the change effort is essential. This is a fine line to walk: involving people is good, and can sometimes turn them into supporters of the change agenda, but at some point it is vital to recognize whether real commitment is there or if some members only give lip service to the agenda. A divided guiding coalition sends ripples throughout the organization, hindering the change effort.
  3. Form a strategic vision and initiatives. Lack of focus is one of the main issues with many companies nowadays. In forming a strategic vision, the company has to take a stand on what is important for them and why the company exists. It is a cornerstone of any successful strategy, but one that is still often missing. Failure to build the vision at this point fractures the change program as the various initiatives do not support each other well enough.
  4. Enlist a volunteer army. Onboarding people to the change program becomes possible once the basic premises have been defined. Onboard many people and as early as you can.
  5. Enable action by removing barriers. Removing obstacles and changing structures at this point creates the basis for change.
  6. Generate short-term wins. In order to uphold morale, it is important to consistently produce results.
  7. Sustain acceleration. As the credibility increases, so do the opportunities to tackle even bigger changes.
  8. Institute change. Ensure continuous improvement.

The 8-step process is a good starting point for a company that is struggling or attempting a major change of direction. However, while it is a good tool to have in your change leadership toolkit for certain situations, it is not a pleasant loop to be caught in applying and reapplying the process, creating a new sense of urgency all over, and going through a major change ever so often. Would it be possible to create a company culture where it is not needed all that often?

Improvement kata, coaching kata, and Lean startup as tools to build a change-oriented corporate culture

Once the company is becoming more ready to change, the approach can be institutionalized and built into the core DNA of the company through the application of the improvement kata and coaching kata.

Mike Rother has written rather extensively about these tools (a brief introduction is available here), the goal of which is to make improvement a daily habit.

In brief, improvement kata is a pattern that constantly improves work through iteration:

  1. In consideration of the overarching direction or challenge…
  2. Grasp the current condition.
  3. Define the target condition.
  4. Move toward that target condition iteratively via experiments, which oncovers the obstacles that need to be worked on.

Coaching kata, on the other hand, is systematic coaching and reflection on the improvements, generally practiced by team managers throughout the organization. This is a key aspect: coaching needs to take place all over the organization in order to create the new corporate culture, it cannot be injected into the company only from a small team of experts.

Another approach that is compatible with improvement kata is the Lean startup. Basically, Lean startup and improvement kata both use repeated PDSA cycles as the actual tool for improvement – Lean startup is more focused on product innovation and improvement kata on process innovation, but both can be applied in the same company, and the scientific improvement method of the PDSA cycle creates a common understanding between the two.

This continuous improvement is the key to a change-oriented corporate culture: when changes are constant, people become more used to them, and less resistant to adopt change.

For example, Toyota considered their culture such an important aspect of their operations that they sent a large number of Japanese sensei to coach the employees of their fledgling US subsidiary upon founding. Only when they were fully satisfied that the Toyota way had been ingrained in the minds of their US employees did they consider their US subsidiary ready to stand on its own.

Conclusions

There are tools you can use to lead change even in the most stubborn organizations, but it will take a lot of time to turn a ship around. Luckily, most failing organizations are not on the verge of collapse and can indeed be turned around successfully.

From that point on, it will still not be smooth sailing until the end of time, but rather the next challenge is to create a culture of improvement within the company to make future changes easier. If something should be apparent by now, it is that change is inevitable, and companies should prepare accordingly.

Author: Ville Kilkku

I run my own consultancy business, so if you find the ideas on this blog intriguing, contact me at consulting@kilkku.com or call me at +358 50 588 5043 and we can discuss how I can help you solve your business problems. I am currently based in Tornio, Finland, but work globally. Google+