To Change a Culture, Start with Changing Behavior
by William C.Finnie Adjunct Professor of Strategy

Success can begin with explicit statements of mission, vision and values unique to each company.
I asserted in my last column that changing the culture is the greatest challenge facing Boeing's new chief executive, James McNerney Jr. Unfortunately, culture change is the toughest challenge facing any management team.

Culture is complex. Trying to change culture head-on just doesn't work. Programs that succeed focus on changing behavior, and they start with explicit statements of mission, vision and values unique to each company. Classic examples include Johnson & Johnson's "to alleviate pain and disease" and 3M's "never kill a new product idea." For General Electric under Jack Welch, it was "how we intend to win in this business."

Their unique missions allow each company to attract and retain people with specific passions and capabilities. J&J executives are dedicated to providing health care solutions, 3M's are innovators and GE's are passionate about achieving industry leadership.

However, for all the uniqueness, there seem to be certain values held in common by all high-performance companies. That's the conclusion of Dr. Robert Lefton, co-founder of Psychological Associates in Clayton.

Since its founding in 1958, Psychological Associates has used behavioral science to provide business solutions. It has worked with most of the Fortune 500 companies as well as many small and midsize organizations. Lefton says the high-performers among these have all shared five values: openness and candor, collaboration, common shared goals, involvement and feedback.

Openness and candor: Nothing truly good happens without candor. Jack Welch ("Winning," chapter 2) points to three ways candor leads to higher performance. First, it involves more people, and more ideas surface. Second, candor results in speedier decisions, a necessity in the global marketplace. Finally, candor cuts costs by replacing meaningless meetings and mind-numbing presentations with "real conversations."

Collaboration: The benefits of collaboration are enormous. Once Detroit automakers got research and development, engineering, operations and marketing working together, the time to launch a new car was cut from 60 months to 30 months.

It's easy to talk about teamwork but difficult to achieve. People are naturally protective and territorial. Protecting your turf is almost evolutionary. You have to rise above it.

Common shared goals: This is another way of saying a good mission and compelling vision. It's what Jim Collins calls a BHAG -- Big, Hairy, Audacious Goal ("Built to Last," 1994). A shared goal that grabs people in the gut is the "hard strategy" element that can motivate people to work together.

Involvement: Getting the different perspectives of everyone on the management team leads to a better mission statement and strategy. Similarly, departmental plans are better when they reflect broad involvement. More important, getting your people involved in developing and discussing common shared goals leads to understanding and commitment, which are essential for effective implementation.

Feedback: Feedback is formalized candor. It compares performance to plan. It identifies root causes for deviations. It eliminates "hockey stick" projections because you have to start this year's plan by comparing last year's actual performance with last year's plan. Feedback is essential for the continuous improvement of both people and businesses.

These five values are directly related to performance. If values are to change behaviors and improve your performance, however, your organization must have a way of measuring the behaviors that result. As with "hard strategy," what gets measured and rewarded gets done.

Within your organization, develop scales so you can rate a person on how often you see specific behaviors. Behavioral variables are highly subjective, but that is part of life. Combine them with business and financial objectives in your performance measurement system. Rating people increases the probability of implementation. You can even incorporate a values-behaviors rating process in 360-degree reviews. Getting feedback from peers and direct reports increases the likelihood of results. It becomes more than just academic puffery.

Your culture -- and the mission, vision, values and behaviors that produce it -- must be unique to your company. But Lefton's five values are common to all highly productive cultures. You have to build them into your company and measure them. Senior leadership has to be creatively repetitious in preaching them. You have to talk them up again and again. You have to get them into your company's bloodstream. But once you do, you have the basis for a high-performance organization.

This column appeared Sunday, September 18, 2005, in the St. Louis Post-Dispatch in the series “These Are the Rules,” written by William C. Finnie, Olin adjunct professor of strategy and former director of market research for Anheuser-Busch.

In this monthly column, Finnie draws lessons from his extensive career as a business strategist: 26 years with Anheuser-Busch marketing; 27 years teaching Washington University MBA students; and 13 years as an independent consultant helping more than 80 companies develop and implement long-term winning strategies.

“These Are the Rules” is designed for business leaders of today and those who aspire to be leaders tomorrow. The columns will be relevant to businesses of all sizes and in all industries. Finnie will examine both business successes and business failures to show how the rules lead to success and how ignorance of the rules leads to failure.

http://www.olin.wustl.edu/discovery/...=557&i=26&pg=1

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