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Louis Gerstner the executive who rescued IBM from near oblivion admitted that previously he saw culture as one among several important elements producing success. But while at IBM he came to see “culture isn’t just one aspect of the game—it IS the game.” So what is this game and how might you play it?
Some of the key variables that produce sustained culture change appear in our Way Ahead paper: Sustaining Culture Change. We identify two basic kinds governing the construction of a culture change programme: individual factors and organisational factors.
Often there is adequate attention to one of them and not the other. The two kinds of variables consist of specific areas of activity with practical implications for action:
Individual Change variables:
Right now we can observe the challenge of culture change most vividly in the financial services area, particularly in relation to banks.
“An absolute disgrace” fumed Christine Lagarde, France’s outspoken finance minister recently, complaining that banks were returning to paying staff guaranteed bonuses.
She publicly railed against the return to the “old ways” revealing yet again the practical difficulties of sustaining culture change and the inertia that seems to curse so many large institutions.
Back in the 1940’s a black and white film called “I know Where I’m Going” showed the heroine taking her father out to lunch at an expensive restaurant. In the scene, he looks around and mutters: “I’m a bank manager, what will my customers think of me eating in a place like this?”
Today you would find it hard to meet a banker able to resist eating in an expensive restaurant, let alone feel guilty about it. Not long ago for instance, the FT reported that a group of Barclays’ bankers celebrated a successful deal by visiting a posh London eatery and managed to get through £40,000.
When Fred Goodwin, one-time and now disgraced RBS chief executive led the bank into its financial Armageddon, it was the culture that he helped create that attracted some of the most damming criticism.
A former ex executive of the bank revealed for example, “it wasn’t a positive or healthy atmosphere” and went on “You have to wonder about the decisions people make in that environment.”
With their arms being twisted by governments and regulators, many banks are now attempting to alter their culture, though probably not back to the black and white days of “I know Where I’m Going”.
Often when organisations say they want to alter certain practices, attitudes or behaviours they are really saying “we need to affect the culture.” But too often there is either resistance to accepting this, or lack of awareness about the implications.
For example a major jewellery and luxury good outlet, recently approached Maynard Leigh Associates asking for help with training its sales people. But as we explored the issue with them, we showed that previous training along these lines had already occurred and at the time was regarded as highly successful.
Many people we spoke still recalled that earlier learning experience with pleasure. Yet apparently here was the client asking for yet more of the same. What had gone wrong?
What our enquiries revealed was that while people were enthusiastic to implement their new learning skills about selling there had been virtually no change within the culture of the organisation to support the new approach. Inevitably people returned to the old ways since none of those with responsibility for steering the culture were doing anything different.
The core message about sustaining culture change is that it will only work if you focus on both individual change and the wider corporate environment.
SUSTAINING CULTURE CHANGE Awarded “Outstanding Paper of the Year”
by The Editorial Board of Training and Management Development Journal
Published in volume 21 No and January 2007
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