The Power of Culture — Part 3 of 3, Curating Culture Case Study

In this, the final chapter of the culture series, we will put together the concepts we discussed in the first two articles covering both culture development and infrastructure design, to address the issues exposed in the case study below. If you have not read the previous articles please catch up at:

• The Power of Culture Part 1: The Power of Belief
• The Power of Culture Part 2: The Power of Infrastructure

The Case Study

For this culture series, and frankly the next set of articles I have planned, there is a lot to unpack. We need a way to explore the concepts provided. To that end, the case study below is an amalgam of multiple real experiences built into a single fictional company, using the most famous fictional company moniker — ACME, Inc. Please see the extended case study description here. It provides details for ACME’s situation, business model, culture, ACME’s functions, and their geographic location.

The Case Summary

The Situation: ACME, Inc. is a large enterprise, with an international footprint that provides and installs high end, secure, reliable, datacenter solutions with $35B in annual revenues. Sales engage customers headquartered in all three global regions — the Americas [AMR}, the Asia Pacific [APAC}, and Europe, the Middle East, and Africa [EMEA], many of which have international footprints as well.

Sales growth has slowed during the past two years both because the company has matured and, with shifting demand, a trend of losing startups / small companies to lower cost competitors.

The slowing sales growth has exposed the high cost of inefficient operations that need to be addressed to ensure profit margin. Operating methodology has developed organically, and locally to organizations and teams resulting in the proliferation of many, insulated, parallel practices and workflows. The results are that the company is highly flexible and innovative but incredibly inefficient in executing common activities and responding to sophisticated customer demands and requests.

The Problem: Given the situation described above the company has three issues to address:

• Flagging revenue growth.
• The high costs of operating efficiencies.
• The underlying product costs that are driven by the high end strategy.

The Proposed Solution: To tackle the problem describe above the company is triaging issues and had developed a multipronged strategy that:

• Shifts to a solution selling strategy that shifts, sales to relationship selling, professional services to full integrator status, and supply chain / manufacturing to simultaneous custom product delivery.
• Radically increase operational efficiencies / decrease operational costs via selected common process deployment while leaving local processes in place where they make sense.
• Developing a tiered product offerings that establishes high, medium and low end solution sets.

Creating a Culture that Supports the New Direction

How do we go about making that necessary culture shift? Before we jump into the specifics let’s acknowledge that the culture shift that we address below is one of many things that need to be addressed. What is described in the case study requires a major transformational effort. Beyond culture, we need a fully developed strategy, clear outcome commitments, a program management office that manages the portfolio of activities and tracks the performance of each, a change management plan, and a communications plan. We will address those efforts in future articles. For now, we will focus solely on the culture shift.

What should the New Culture Include?

The Culture Challenges: This case study is riddled with challenges at every level. For this series we will focus on culture issues. In future articles, I will use this same case study to address other topics such as change management and enterprise program management. The cultural challenges include:

Assessing the Culture

As we presented the concepts of culture, we developed a set of questions with which to fully understand cultural needs and set up our approach to resolving mismatches.

Cultural Assessment Questions:

• What are the cultural sacred cows? [We don’t mess with sacred cows.]
• What values and norms support the new direction? [Turn the traffic lights to green.]
• Are changes required to our documented vision, mission and/or values?
• What are the potential negative results or unintended consequences of the change?
• What cultural variations [by function, location, etc.] should be considered?
• What are the necessary governance changes to support the new cultural norms and values?
• What communications [change drivers] are required to drive and support the change?
• What accelerators can we leverage to justify and otherwise give credibility to the shift? [How and when should we use them?]

Making the Culture Shift

Caveat: The assessment below is partial and summarized. For a more detailed analysis please see the case study. Additionally, while this assessment is strictly considering culture shifts, to simplify this treatment, in reality, this sort of analysis would be done as part of the larger gap analysis that needs to be completed for the entire transformational effort. In future articles we will address gap analysis and planning for both the full change management effort and program portfolio.

Now let’s take a crack at answering those cultural assessment questions for ACME’s shift.

ACME Mission & Values

ACME already has a mission statement and values in place. They have served the enterprise reasonably well over the past several years. It has been three years since they were refreshed.

Note: Red items are items for replacement or additions.

Now that we have had a chance to mark up the mission / values statement we can address the work required to address cultural shifts.

Summary — Required Gap Spanning Efforts to Create the Required Culture

Now that we have defined the desired new features for our culture we need to bridge the gap from where we are to where we want to be. To complete the gap plan we will use the framework we developed in the first two articles in this culture series addressing both the ‘soft’ and ‘hard’ sides of the shift assessing:

• The behaviors we want our teammates to exhibit and the values we want them to prioritize from their point of view.
• The activities and infrastructure we need to address to encourage and embed those values.

Using the ‘Required Culture’ section from the assessment table above we can plan to fill the gap. The breakdown of that assessment can be found in the Case Study. The below table is the consolidation of those changes by infrastructure area, starting with where we want our teammates to be.

Use Case: Consolidated Gap Closure Efforts

Viewing Change through a Cultural Lens

We have now analyzed the features of our needed culture and established a consolidated plan to bridge the gap. While we have presented all of these changes through a cultural lens, we are not changing culture just to change the culture. Rather cultural changes are part of a larger plan to move in a new direction. The changes described above also impact the business model and our general way of doing business. We are focused on the cultural aspects of the change in this series. The change management and program management aspects of the change will be addressed in future series. That said, the above consolidation of required culture related changes yields critical insights.

Teammate PoV: Team PoV describes culture in action on the ground. It is the proxy for public opinion in the LGBT and UC Berkeley’s Theoretical Physics Program examples in the ‘Power of Infrastructure’ article The consolidation summarizes the values that we want our teammates to integrate, the priorities on which we want them focused, and the behaviors that will be rewarded. To support the new business model we want our teammates to:

• Understand the end-to-end business demand of the solution sales model.
• Default to collaboration and trusting their teammates regardless of whether or not they have met in person.
• Instill cost consciousness in a way that they both:
• Passively conduct their work and travel practices within the current expense guidance.
• Actively identify cost reduction opportunities and address them, including reducing, where it makes sense, the number of duplicative process instances via a common process.

Governance: Governance is the container in which culture resides. It provides the north stars for our efforts through the established OKRs, hard boundaries, through policy, and well worn paths of proven success, through guidance and practice, and clear leadership modeling for expected behaviors. In this case study:

• North Stars tell us where we need to go. OKRs give us the goals we need to achieve, the duration we have to get there, and the KPI/metrics that measure their performance.
• Policies address what behaviors are in bounds and what behaviors are patently unacceptable. Policy changes, because of their finality, must be carefully constructed to avoid unintended consequences.
• Guidance and practices provide clarity for what works best. Deviation from these best practices should be done for a clear purpose and outcome and understanding what might break when not operating to standards.
• Modeling allows leadership to provide our teammates a clear example of the expected behavior.

Communications: Communications is the active aspect of the change effort. It is the planned messaging that,in bite sized, digestible chunks, reminds teammates of the changes we are going through, our progress to date, and the new behaviors that we treasure. This effort serves to reinforce the shift and provide mile markers that pull us from our day-to-day to let people know “You are here.”

Accelerators: The accelerator improvements cover far more than culture shifts, will be phased, and likely take years to deploy. They are highlighted here because the end result is that those accelerator changes have the collateral effect of institutionalizing the culture into everyday work practices. Accelerators are where we spend the bulk of our time in planning, building, and running these efforts. Changing them takes time and effort. Once they are structured they take more time and effort to rebuild. So we want to get these structures right.

The Take Aways: Curating Culture through Changes

Cultural values and norms drive both intended and unintended perspectives and behaviors. Organizational culture, with its associated values and norms, must be curated in order to ensure that your team behaves in a healthy, productive way and maintains cultural perspective in choosing offerings, navigating engagements, and interacting with each other day-to-day. While culture is a powerful force that should not be underestimated, it is fragile and can be destroyed in a moment if not carefully curated. Culture dictates how we humans interact with each other, our partners, our competitors, and our organization’s infrastructure and resources. While scientific principles inform what we CAN do while our cultural norms inform what we WILL and WON’T do.

Cultural norms give you a traffic light for what is and is not okay in what you make, how you behave, and how you get work done. Engaging with and addressing opportunities and threats require considering the impacts to your culture. Is the light green for your redress plan? If not, do you have to change your plan or the organization’s culture? You are either going to operate within your norms, or if that is insufficient, thoughtfully make changes to your culture to support this new direction, without breaking your culture.

Organizations are ever evolving whether by incremental evolution or in giant leaps of transformation. As the organization shifts culture curators must ask:

• Does this direction shift fit within our current cultural values and norms? If NO, then,
• How must our culture change and what does it imply for our offerings, engagements and ways of working together?

Cultural Assessment Questions:

• What are the cultural sacred cows? [We don’t mess with sacred cows.]
• What values and norms support the new direction? [Turn the traffic lights to green.]
• Are changes required to our documented vision, mission and/or values?
• What are the potential negative results or unintended consequences of the change?
• What cultural variations [by function, location, etc.] should be considered?
• What are the necessary governance changes to support the new cultural norms and values?
• What communications [change drivers] are required to drive and support the change?
• What accelerators can we leverage to justify and otherwise give credibility to the shift? [How and when should we use them?]

The coexistence between the mission, public opinion, institutions, and situational dynamics are inextricable. They make up an ecosystem. If something changes within the ecosystem it will affect everything within the ecosystem. Conversely, if you need to change something within that ecosystem you need to understand the effects to the entire ecosystem.

Intentional or not, changes to your governance, communications, and other key infrastructures can and will impact your culture. While culture stems from beliefs and infrastructure is developed based on the scientific method, culture and infrastructure interact to either reinforce each other or in dissonance with each other. Changes to culture are either supported by infrastructure, or require changes to infrastructure. In like kind, changes to infrastructure must consider whether or not they impact culture. Otherwise, you will experience the unintended consequences of the change.

There are lots of good reasons to not build norms into infrastructure. However, if you need to, the fastest way to harden culture is to build it into policy. Then you can make it more durable by injecting it into the rest of your infrastructure. Governance infrastructure establishes the house in which culture lives. Like water adjusting its shape to the container, culture adjusts to the governance framework. Communications infrastructure is the active element driving culture shift. The key quality of an accelerator is that the intelligence it provides is factual whether or not it is applied to cultural change.

Cultural Assessment Questions:

Once you are clear on the necessary culture shift and associated implications you can determine the:

• What are the necessary governance changes to support the new cultural norms and values?
• What communications are required to drive and support the change?
• What accelerators can we leverage to justify and otherwise give credibility to the shift?

Culture curation never ends. We live in a constantly changing world in an ecosystem of ever shifting opportunities and threats. As we face our evolving reality, we change to deal with the circumstances with which we find ourselves experiencing. Curating your culture, as we address these changes, is one of the most critical aspects to ensuring the continued success of your journey.

Curating Your Culture

Cultural changes are part of a larger plan to move in a new direction. We are adjusting the culture to support the new business model. In doing that we consider:

• Governance: Governance is the container in which culture resides. It provides the northstars for our efforts through the established OKRs, hard boundaries, through policy, and well worn paths of proven success, through guidance and practice, and clear leadership modeling for expected behaviors.
• Teammate PoV: Team PoV describes culture in action on the ground. We need to summarize the values that we want our teammates to integrate, the priorities on which we want them focused, and the behaviors that will be rewarded.
• Communications: Communications is the active aspect of the change effort. It is the planned messaging that, in bite sized, digestible chunks, reminds teammates of the changes we are going through, our progress to date, and the new behaviors that we treasure.
• Accelerators: The accelerator improvements cover far more than culture shifts, will be phased, and likely take years to deploy. Accelerators are where we spend the bulk of our time in planning, building, and running these efforts.

When going through organizational changes, culture should be your first stop. Curating your culture is critical to maintaining organizational unity. Ignore culture at your parallel. If your change deviates from your culture, culture will win and your change will stumble if not fail.

Find more articles from Sarah at: www.operations-architect.com.