Leading Organizational Change with Culture

Shifting the central lever of management from the hardware of the organization to the software of its culture

A company’s culture is often overlooked as a primary driver of organizational performance. Many managers, for better or for worse, let it emerge without much involvement. For one reason or another they think it’s too ambiguous to put a finger on its value. In contrast, I believe that culture drives everything, which has led to me to think about the cultural behaviors that are desirable and undesirable in a workplace that’s trying to become more responsive. Tolstoy famously said “All happy families resemble one another, but each unhappy family is unhappy in its own way.” In that same vein, there are a handful of cultural traits that crop up with regularity when looking at successful, responsive organizations.

Ingredients of a Responsive Culture

  1. Visionary over growth agenda. A profit-driven organization is going to struggle to retain top talent and motivate its employees in the long term. When people believe in the dent you’re trying to make in the universe they’re going to be inspired and motivated to go the extra mile for the organization. In many cases they’ll put the business’s interest ahead of their own. Look to the likes of Google, Tesla, Zappos, Uber, AirBnb, MakerBot, Valve, and Quirky for companies who care more about their vision than their profit margins.
  2. Open over closed systems. Being open about your firm’s sales performance, talent pipeline, resourcing conundrums, incentive levers, and the like creates a shared sense of ownership and responsibility among employees. At Undercurrent, we’ve gone so far as to design our entire business to act like an open API that lets its employees play with the data. As a pet project I’ve been using Pipedrive’s API (what we use to manage leads) and 10,000ft’s API (what we use for resource planning) to build a chat bot inside of HipChat (what we use to communicate with each other) so anyone in the company can ask it a question about our business’s performance and get an immediate answer (like Siri for small business). This act of openness has made many other ideas like this emerge faster from our employees and makes our ability to share and be transparent even greater.
  3. Nonhierarchical over hierarchical communication. Junior people should be expected to challenge senior people. This is the same idea as McKinsey’s “obligation to dissent.” I’ve seen managers toil over PowerPoints for senior managers who toil over PowerPoints for VPs who toil over PowerPoint for SVPs who t… you get the picture. Drawn from best practices at Google and Zappos, Undercurrent has an open forum every Friday afternoon where we share our output for the week and have a Q&A session between the team and our CEO. Anything goes, from salary discussions to growing pains to our office culture. We’ve also invested in a host of other open technologies, like HipChat, that we’re using to create public chat rooms for every part of our business where anyone in the office can jump in and offer their POV.
  4. Individual over team performance. If individual performance norms and incentives are successfully embedded in an organization, then hierarchy and processes don’t have to be quite so restrictive to achieve good performance. When done correctly, employees start to think and act like owners. This naturally leads to a more competitive environment, but if you’re a purpose-driven organization (versus a growth-driven one) it can be a healthy balance and method of progression for individuals and the firm as a whole.
  5. Small bets over loss aversion. Having a bias toward loss aversion naturally makes companies more cautious and more focused on exploiting their existing offering. That’s all well and good, but when companies deny themselves a portfolio of small bets (and when a startup can raise ~1MM on Kickstarter in less than 24 hours), they actually corner themselves into placing their chips on big-bet investments that typically underperform. Meanwhile, the market has moved on.
  6. Adaptive workplace over adaptive employees. Steven Johnson uses the concept of flow to describe the mind when it is most productive and goes on to describe that good ideas don’t usually emerge from a single moment of focus, but are more the product of fluidity. The familiar example of a workplace that encourages this mental state of flow and continuous innovation is MIT’s Building 20. Is was originally built as a temporary research space that never had a defined purpose, which lead researchers to modify the space as needed (i.e. by running cable through holes they’d punch in the wall). Johnson would say that your space needs to encourage this liquid flow of information throughout the workplace. Of course, most buildings don’t allow you to tear down walls at will, but things like reconfigurable rooms, desks with wheels, and ping pong tables are all in a similar spirit.

While these ingredients all have an apple-pie-like quality to them, each play a critical role in reducing the dependency on an organization’s structure to achieve a more responsive culture: one that’s quick on its feet and pushing innovation to the edge of its workplace. It’s worth pointing out the obvious that moving toward this idea of a responsive culture falls flat without management committing to a local combination of the ingredients I’ve shared above, while working in close collaboration with employees on the front lines to best understand their implications. Without that commitment, any attempt to trial it on a local level will eventually be met by organizational inertia that will swiftly kick you back toward ‘best practice.’

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