Monday, January 29, 2007

Is Your Office a Petri Dish?

From last week's Globe and Mail:

Corporate culture comes in many guises. As companies merge or evolve, it can be a challenge getting employees from divergent backgrounds operating on the same page, WALLACE IMMEN writes

Take a look around your workplace. It's likely that, even if there are no written rules, your fellow employees have learned there's a way things are done and they try to fit in.

In some offices, people not only adopt similar ways of working and conducting meetings, they may find themselves sharing opinions and tastes in clothes.

The initial reason is that managers tend -- unconsciously or not -- to hire people who think and act like them, says Glenn Carroll, professor of organizations at Stanford University and author of Culture and Demography in Organizations.

Once on the job, people want to be liked and fit in, he adds. They pick up clues from those around them about what behaviour makes bosses and co-workers most comfortable.

Corporations, like countries, develop ingrained cultures -- ways of doing things that persist even though the members of the group change, Prof. Carroll and co-author University of Dallas professor J. Richard Harrison conclude. That can make it easier for managers, because it means new employees learn how to perform based on observing others around them and there is less need to micromanage.

But it can present a huge challenge when a manager has a mandate to create change, or -- as happened at a record pace last year in Canada -- two organizations with different cultures are combined in a merger or acquisition.

"If people don't understand the need to adapt to a new culture, there's a continual resistance to change. It's like sand continually in the gears," Prof. Carroll says.

That resistance is something Ted Bonertz faced when he became business director of Mississauga-based BASF Agricultural Products Canada last February. He inherited an organization that was the result of a series of mergers that had put employees from four different corporate cultures onto the same team.

"I came in and recognized fairly quickly that we weren't humming as a team," Mr. Bonertz says.
He found people in each of the legacy companies had developed different ways of doing things in their previous companies that they perpetuated in the new organization.

Notably, people who had teamed up in previous organizations tended to continue to try to work together, which limited co-operation across the organization. The teams also didn't share ideas with people who came from other groups, which stifled innovation, Mr. Bonertz says.

"It was clear that I had to get people to agree on shared goals and have actions everyone could follow so people could help each other achieve the goals."

However, saying things have to change is one thing; it takes persistence to get people out of their entrenched habits, Mr. Bonertz says.

But he believes he had an advantage: at least people were willing to try to change. "They all felt frustrated, so it wasn't a very difficult sale to make to the team."

Getting that buy-in is vital to changing a corporate culture, says Eric Jackson president and chief executive officer of Jackson Leadership Systems in Toronto, which coaches on corporate change.

Here are a few steps Mr. Jackson recommends leaders take when they need to steer a cultural change:

Know the players

It's a mistake to just walk into an organization and declare a new way of doing things without first understanding the assumptions and personalities that are behind the existing culture and what people believe are the strengths and drawbacks of the way things are done, Mr. Jackson says. His rule of thumb for a leader coming into an organization for the first time is to take the first 30 days to get to know the existing culture; but then impose the changes quickly as possible.

Set a clear vision

Explain what you are trying to accomplish and what outcome will come from being successful, Mr. Jackson says. This helps people understand the reason for the change and what is in it for them to make it a success.

Work with individuals

Don't just tell the team about the plan and expect them to change. People should be approached individually to discuss their understanding of the changes and the advantages to them of shifting their engrained way of doing things.

Encourage early adapters

The tendency to develop a corporate way of doing things is also a tool smart managers can use to achieve their goals, because once key people that others look to for guidance adopt the change, others will try to adopt it as well, Mr. Jackson says.

These are steps Mr. Bonertz took to get his organization of 100 people at BASF Agricultural Products Canada working together.

"What we decided to do is set goals and get people to take ownership of them and then make sure they follow up on them," he says. "That sounds so simple but trust me, it's not that simple."
One of the legacy companies had a dominant culture and some people from that group were resistant to change. So, he worked with individuals rather than trying to sway the entire group.
He set up a program of quarterly performance reviews of how well they are meeting business goals as well as their individual career goals. These are things that had been treated separately in the past, he says.

Linking personal and job performance goals got people thinking about their importance in the organization and how success can move their careers forward, Mr. Bonertz says.

The result, he says, is a notable improvement in the way the team interacts and pulls together. This has resulted in better customer relations as well, he says. And, fortunately, everyone seems to have accepted the need for the change.

But what should a manager do if there are some who continue to drag their feet?

Prof. Carroll of Stanford University says his research has found that the most effective way to deal with resistance is "to let people who don't fit in know that they don't fit. And tell them either to try to fit in or leave."

That my-way-or-the-highway prescription has landed him in hot water from critics, but it sounds more Draconian than it really is, he explains.

"I'm not saying you just fire the person, but rather the way to do it is explain to them that, if they don't change, they will not fit into the new organization," Prof Carroll says.

The message does have to be direct, he says. "For instance: 'Bob, it keeps happening. We're trying to get you to do it our way and you're not changing. You've got to accept that if you can't do it that way, there isn't going to be a long term future in this organization.'

"If you're direct, people will get the message and try to fit in," he says. If they can't, they will probably always be a negative influence and the corporate culture will be better off without them, he adds.

Clearing resistance doesn't have to lead to firing. Mr. Jackson advises that, if possible, try moving those who resist to other positions in the organization where they feel a better fit.
In either case, the task of leading change may be uncomfortable, but invariably the leader will find that the rest of the team appreciates taking action to remove friction, he says.

"Whenever you make changes, there is a period of disorientation and frustration. You have to get through that period and the sooner you can, the sooner the team will be moving smoothly in the new direction."

The four faces of culture

Culture is the personality of an organization and, just as some people tend to seek out communities of people with interests similar to theirs, so organizations find people who work better together if they "fit" the corporate culture.

Jeffrey Sonnenfeld, associate dean for executive programs at Yale University's School of Management, has identified the four most common types of cultures:

Academy culture. Employees are highly skilled and tend to stay in the organization while working their way up the ranks. Examples are universities, hospitals and large corporations.

Baseball team culture. Employees are "free agents" who have prized skills. They are in high demand and can rather easily get jobs elsewhere. This culture develops in fast-paced organizations, such as investment banking and advertising.

Club culture. The most important requirement for employees here is to be accepted by other group members.

Usually, employees start at the bottom and stay with the organization because it promotes from within and values seniority. Examples are the military and many law firms.

Fortress culture. This is common in organizations that have multiple divisions or face regular reorganization.

Employees stay loyal to their own team and develop protective measures to avoid being on the firing line. But, because change is frequent, these organizations also offer opportunities for fast advancement.

Wallace Immen

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