Five Essential Steps to Building a Disruptive Culture
Three-quarters of CEOs say their organizations seek to be the disruptor in their respective sector, according to the 2017 KPMG Global CEO Outlook survey. This is a necessary strategy given that the pace of change seems to be doubling in speed every year, resulting in a sense that all of our accepted truths about how society, politics, and business work are no longer relevant or useful—they have become obsolete.
However, i4cp’s recently released study on agile organizations found that only 9% of the more than 1,800 respondents believe that their organization’s approach to change is to be the disruptor.
So why is there such a huge disconnect between strategic intent and ability to execute? To put it bluntly, if you don’t get culture right, nothing else matters.
There is a lot of evidence that suggests that no matter what the strategy is, if it is not aligned with the culture, it will be very difficult to execute. To paraphrase the late management guru Peter Drucker, if the strategy is not aligned to the culture, the culture will eat strategy for breakfast, lunch, and dinner.
What does a disruptive culture look like?
i4cp’s research shows that employees in disruptive cultures are passionate about being customer-centric and those closest to the customer are empowered to make decisions that delight the customer. Disruptive cultures encourage creativity and innovation and reward intelligent risk taking. They develop agile leadership behaviors at all levels, and those leaders build purposeful collaborative teams that cut across organizational boundaries to address new opportunities.
The cultures of most organizations do not have these attributes. Traditional organizations naturally encourage consistency and predictability. They create layers of bureaucracy to approve decisions to avoid risk taking. They are internally focused to improve efficiency and build a hyper competitive environment to increase productivity.
Cultures can change from traditional to disruptive, but it is not easy.
1. Understand what culture truly is
The more academic definition of culture used by the American Management Association (AMA) and i4cp is:
“Culture is the shared values and beliefs that help individuals understand organizational functioning and that provide them with guides for their behavior within the organization.”
Herb Kelleher, former Chairman of Southwest Airlines, is more succinct and quickly gets to the essence of culture: “Culture is what people do when no one is looking.”
Essentially, culture is what is “felt” by people and drives what is done, condoned, rewarded, encouraged, penalized. Just remember that within an organization there may be many sub-cultures within functions, regional location, etc.
2. Promote the upside and carefully manage the downside of a culture that values disruption
On the upside it will create a more flexible, decisive culture where change is initiated and embraced rather than approached with fear and skepticism. But a more agile culture usually means pushing decision making down the organization and closer to the customer. How can you insure that decentralizing decision making still supports the organizations overall goals and mission? And, what does intelligent risk-taking look like?
3. Purposefully develop and implement a marketing strategy that infuses the values of a more disruptive culture
Values are not a plaque hung on a wall. The goal is to bring values to life, to ensure that everyone understands the values and buys into them.
Some key steps to consider:
- Establish the linkage between the cultural values, the customer, and the business strategy.
- Conduct linkage meetings with middle managers and first line supervisors.
- Talk about the values and the linkages at every employee event. Be prepared to hold town hall meetings (virtual or actual) when the need arises.
- Take advantage of social media to maintain a steady flow of informal communications.
- Agree on accountability, dependencies and expectations.
- Train and guide managers on internal communication strategies.
- A managed approach that brings the values to life is stories. The best stories describe how individuals executed the values in a meaningful way.
4. Make sure that the behaviors of managers are consistent with the values of a disruptive culture
While the behavior of executives is important, there is another level of leadership that is even more critical to building new cultural values—the behavior of managers. Managers translate the values into specific actions, link values to strategy, leverage values in response to on-the-ground realities, use informal networks and knowledge about how to get things done, and engage and align employees with the values. The key ingredient is accountability.
5. Ensure managers recognize employees who live the values and provide an excellent customer experience
High-performance organizations however, go a step further by making values, customer service, and strategy a large part of the performance management process. Over time, it is easy for performance management (PM) to become an exercise unto itself; performance management only exists to support the need for performance management.
A truly effective PM strategy is fluid in that it reflects the values and the changing needs of the customer. Goals, behaviors, and objectives should all be in direct relation to the values of a disruptive culture. High-performance organizations are more likely to focus their PM efforts on customers and the market, and low-performing organizations are much more likely to be internally focused.
This is a clear sign that PM is being misapplied in lower-performing organizations, but it would only require minor adjustments to correct in most companies (in contrast to changing the entire system).
By identifying and clearly articulating the values and needs of the customer, organizations can set performance goals that reflect milestones in how those needs are being met, and this in turn will help employees better understand the need for PM.
Changing your culture from a traditional fixed culture to a more disruptive, agile culture is not easy. It is hard work, but with a strategy and persistence it can be done. These five steps, combined with constant measurement and accountability, can help make a culture shift to the disruptive just a little easier.
i4cp members: download i4cp’s report The Three A’s of Organizational Agility: Reinvention Through Disruption.