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Culture Change is More Than Skin Deep

The new Pope appears to have made culture change top on hislist of priorities. He has shown surprising humility in his words and actions, riding the bus with his Cardinals, rejecting wearing some of the elaborate vestments worn by past popes, and stepping out of his car and engaging with the crowds.  These are signs that Pope Francis is taking steps to change a historically secretive institution; one that has recently suffered from leaked internal documents that imply palace intrigue.

Marissa Mayer, new CEO of Yahoo, received notoriety recently when she instituted a new policy that ended employees working from home.  The media were abuzz with debate about her actions which, on the surface, appeared to be swimming against the tide of flexible work hours and locations. However, the action may have been part of Mayer’s plan to change the culture of a company that was losing market share and stock value.

Bob Flexon, Dynergy CEO since July 2011, has instituted many new policies to change the culture of this $1.3 billion electric power producer that has only recently emerged from bankruptcy. He has eliminated some of the expensive trappings of executives, moved managers out of private offices and into an open work space, and re-instituted annual performance reviews. Using Dynergy as an example, Joann S. Lublin writes in WJS:

Increasingly, leaders of troubled businesses try to fix the company's culture along with its bottom line. Since the financial crisis struck in 2008, CEOs have sought to improve collaboration and decision making, recognizing that a strong culture is "a critical component of their long-term success," says Nick Neuhausel, a partner at consulting firm Senn Delaney, which advised Dynegy.

While each of these leaders, from the Vatican to Yahoo to Dynergy, recognizes that culture change is MP900049416
essential to the future success of their organizations, they would be well served to recognize also the complexity of organizational culture and the necessity of going beyond symbols and artifacts. For lasting  organizational change they must confront underlying beliefs, assumptions, and values of employees .

Dan Denison, CEO of Denison Consulting and co-author of the new book, Leading Culture Change in Global Organizations, writes that culture should be examined at the three levels identified by Edgar Schein:

(1)    the deep underlying beliefs and assumptions that are often difficult for insiders to articulate

(2)    the values and principles that structure action

(3)    the symbols and artifacts that are visible on the surface for all to see

People act on the basis of tacit knowledge but they are often not aware of how daily behavior is shaped by this knowledge. It’s simply “how we do things here.” Underlying beliefs, assumptions, and values become routines that, over time, go unchallenged. Those routines may or may not serve the best interests of the organization and its customers. Culture change must confront the link between the thinking that drives behavior and the effects of that behavior on organizational success.

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Learning Organization is Culture, Processes, and Leadership
Harry Levinson 1922-2012