- Sep 15, 2022
Cultural Transformation: 4 Levers for an Industry of One
- Randall Rogers
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Transforming a company’s culture is no easy task. Not only does the task often take years to complete, but it also requires sustained, long-term commitment from the executive team which is challenging in the fast-paced, shiny-object- syndrome world in which we live. But it is precisely such commitment and the follow-on cultural shift(s) that enable a company to establish a distinct competitive advantage in the marketplace.
Toyota is a great case study in long-term executive commitment leading to dramatic changes in its culture leading to a distinct competitive advantage in its marketplace. How few companies do this well, but for those who do, you operate in rarefied air; operate in an industry of one where the only competitor to out-perform, to out-do will be you. The question that now rises is how can a company create a cultural-based competitive advantage? What specific shifts or levers are necessary to do so?
As it turns out, and with credit to Dr. Otto Scharmer (MIT and The Presencing Institute) and Adam Kahane (Reos Partners), there are four (4) needed shifts or levers to bring about an enterprise-wide cultural transformation. They are: 1) transform understandings 2) transform intentions, 3) transform actions, 4) transform relationships.
The first shift or lever is to transform people’s understanding of a context, issue, problem, or process. Often, staff possess different understandings of an issue or problem or opportunity that leads to internal conflict and dysfunctional behavior. Letting these types of situations to propagate, perpetuate, and fester will never lead to needed cultural transformation.
Hence, step #1 is to ensure there is coherence in people’s understanding of the context in question. This creates a shared meaning which is a necessary prerequisite to initiate the next shift which is to transform people’s intentions.
Having first created a shared meaning, a coherence amongst staff of what is the problem, issue, opportunity, or context a new door of opportunity is opened to us to transform our culture. The task now is to transform people’s intentions to adopt more of a “we not me” attitude and way of seeing the world. Transforming people’s intentions, creating shared intentions amongst staff is the only way a company’s culture moves forward as a unified cohort all aligned around achieving common goals.
Intentions, in a corporate environment, do translate into goals and objectives. Trouble is, our default mode of operating is to walk into a meeting or workshop with our agenda, with our specific set of priorities, and with our need to convince others’ our way is right and their way is wrong. Clearly, when all or most people are operating in this manner it is not possible to transform a culture.
To transform a culture we need all (or nearly all) people rowing in the same direction. To transform people’s intentions is the deliberate step we take to do this. And in transforming intentions, yet another door of opportunity opens up to us to bring about enterprise cultural transformation – transforming actions.
At this point, the hard work of transformation is done as you have been focused on winning over mindsets and behaviors which are the most difficult of all internal structures to transform. So, with having established coherent understandings, coherent intentions the seeds of aligned action can now grow. Thus, the third major shift is to transform a company’s actions (aka ‘its change agenda’).
Typically, what we see on our consulting engagements is companies pursuing several non-integrated change agendas creating internal confusion, chaos, and change fatigue. And these operational and cultural conditions result in massive corporate redundancies, wasted resources, and epic devaluations of strategic ROI. We can and must do better than this.
When the parts of a company are not advancing lockstep with its actions, with its strategic ambitions it sub-optimizes the value delivery of the entire corporate organism. And when this occurs, you can forget about realizing corporate mission, achieving corporate vision – such aspirations are not possible with that degree of fragmentation and misalignment. So, the play here is to corral, align all company actions to create needed flow and symmetry.
Flow and symmetry of operations are necessary pre-conditions to transform your culture. Last, and perhaps most importantly, to transform your culture, it requires transforming the relationships that exist between and amongst your people. Now, if you attempt the first three transformations in the correct manner this fourth transformation occurs naturally.
Hence, there is nothing for you to necessarily do. In today’s world of layoffs, restructurings, and forced retirements (not to mention the massive disruption of upskilling or reskilling your workforce), the informal networks of relations that have existed in most companies are gone. In Quantum Theory, it states that relationships are the unifying feature of the universe; the ‘glue’ that keeps all from falling apart.
What I would suggest to you is that the same is true when thinking about your company. That is, it is the relationships amongst and between your internal staff that matter most and that shadow and underpin your culture. Without established, strong internal relations, without people “knowing one another”, the necessary foundation to support all the other shifts described above is never established; over time, and we are seeing this more and more, corporate entropy sets in and the company falls apart.
Therefore, choose instead to transform your company in the ways described above and not only will you avoid entropic destruction you will more importantly establish a serious competitive advantage in the marketplace. I know this to be true, not only because of some real exemplars like Toyota, but also because the commitment required to realize the transformation is too intense for the weak- minded, too intense for the half-hearted; those lacking gumption, vision, and managerial courage. This fact should embolden and inspire you, as there will be few followers walking same path.
And once you reach the promised land, revel in your journey, celebrate your success, but then quickly get back on the path to ever-widen your hard-earned competitive advantage. Congratulations, you now operate as an industry of One.
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