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VIEWPOINT - It takes a courageous leader to shape a corporate culture

Mon, 12 Dec 2011 15:24 GMT

Source: other // Keith Michaelson

A man smiles as he walks past a stock quotation board outside a brokerage in Tokyo 12/12/2011 REUTERS/Toru Hanai

The tenth anniversary of the Enron corporate scandal, particularly in the context of the later events leading up to the financial crisis of 2009, reminds us what can happen when a company loses its moral compass.  This type of behavior always takes place within the context of the existing corporate culture.  Culture – defined as the set of basic assumptions shared by organization members which directly influences behavior -- is the deciding factor in a company’s ability to function both effectively and ethically.

While it is relatively easy to identify the symptoms of a dysfunctional culture, it is not so easy to make the needed course corrections; and the work of driving cultural change ultimately falls on the shoulders of the leader. It takes a transformational leader – a values-driven role model who can inspire people and build trust – to guide culture change. 

I recently completed a one-year study of culture change at a power plant in the electric generation system of a major utility. During that year, under the leadership of a new plant manager, the station began to shift from an environment characterized by fear, mistrust and chronic conflict to a more open, collaborative and high-performance culture. This plant’s story sheds light on the role a transformational leader plays in guiding culture change: inspiring the workforce with a vision and reinforcing the values day-to-day, in small ways.

Inspiring the Workforce 

The starting point for culture change is an inspirational vision, communicated by the leader, which describes what the organization can become. Through the vision, which can describe both commercial success and the organization’s ethical commitments to customers and community, the leader enlists the workforce to go beyond individual concerns in the interest of shared success. For the power plant, the vision was to leave behind its reputation as a franchise risk to the company and become the top performer in the generating system. Achieving the vision would require progress on a number of fronts: safety and environmental management; operating and maintenance processes, full engagement of the workforce and leadership development.

A set of values, which served as the basis for a new kind of dialogue about behavior, was associated with the vision. Managers and workers had been trapped in a “cycle of mistrust,” each group viewing the behavior of the other group with suspicion and misunderstanding. Now, there was an opportunity for more frank conversation: how does our behavior either support or undermine our vision? Is our behavior in line with or in conflict with our espoused values?  While many organizations develop a vision statement and a set of values, most leaders don’t use them day-to-day, in real time, to pose questions about behavior: are we being transparent and learning from mistakes? Are we taking ownership for our performance? Are we building a collaborative community? Are we focused on the customer? If not, what’s in the way of making the shift? Rather than address performance or behavioral issues as one-off, isolated events, the plant manager discussed each event in the context of the culture he was attempting to shape.

Overcoming Personal Limitations

Every leader who undertakes culture change will come up against personal limitations, which stand in the way of transformational leadership. In the face of resistance and the inevitable slow pace of culture change, it’s natural, but unproductive, to fall back on old patterns. A leader then risks reinforcing the very culture he or she is trying to change. For the plant manager, returning to old behaviors of showing frustration and impatience, publicly scolding and criticizing people and making unilateral decisions would only confirm for everyone what they still truly believed; that nothing was going to change. It took a consistent effort to look inward and understand his own motivations for the plant manager to begin to act as a more consistent role model. Leading culture change means committing to a personal change in leadership behavior. It means questioning your own ethics and values, ensuring that you are acting as a role model worthy of being emulated.

The power plant made great strides towards building a more positive and productive culture during the one year period. The plant manager’s focus on communicating a vision and connecting daily behavior to organisational values was shifting employee behavior, strengthening morale and improving performance. With essentially the same workforce, the same external environment and the same leadership team, there were early signs that the long-standing culture of fear and mistrust was being replaced by a culture of collaboration and teamwork.

Many leaders underestimate the personal challenge of sustaining a culture that supports both ethical decision-making and high performance.  Strategy and structure, process and procedures are not enough; it requires joining in a dialogue with your people and showing them how you put your own guiding principles to work.

Keith Michaelson (kmichaelson@schafferresults.com) is a senior partner at Schaffer Consulting, a leader in the practice of organizational change for over 50 years. Keith works with leaders to design and facilitate business transformation and cultural change programs and provides one-on-one executive coaching services to senior organizational leaders.