Mar 28, 2017 — Catalyze your culture for sustained results. 2. You’ve acknowledged that culture matters. You’ve aligned it to strategy, and you know where you
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2You™ve acknowledged that culture matters. You™ve aligned it to strategy, and you know where you want to take it. Now it™s time to get there. well, can pay impressive dividends. Organizations fiwith a soulfl outperform the S&P 400 in terms of higher employee engagement and more than 8x return vs. S&P 400 10-year returns. 1 It™s also the key ingredient in creating a Simply IrresistibleŽ experience for your workforce, 2 found to be the most highly correlated factor in whether someone recommended an organization as a place to workŠnearly three 3 Figure 1. Correlation of employment factors to Glassdoor recommendations as place to work Source: BersinŽ Deloitte Consulting LLP research with Glassdoor But what is culture? Culture is fithe way we do things around hereflŠsustained patterns of behavior over time that are supported by the shared experiences, values, and beliefs of the organization. Culture is what transforms individual employees into a collective, cohesive whole, and is continually reinforced over time as an organization orients new employees to the way things are done, makes business decisions, confronts challenges or industry disruption, and implements new processes. When aligned with business strategy, organizational culture can drive results without having to rely on command and control; employees feel engaged, believe they™re doing meaningful work, and intuitively know how to act to drive sustainable performance in line with the strategy. 4 When misaligned with strategy, organizational culture can stymie growth and undermine leadership™s attempts to drive Culture & values Senior leadership Career opportunities Work-life balance Year founded (age) 0.30 0.28 0.22 0.13 0.12 0.00
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3to the company™s bottom line. The good news is that companies can prevent this outcome by proactively designing and activating culture change that supports their strategy, environment, and people. With committed leadership, a clear understanding of culture activation techniques, and the right tools, leadership can control the organizational levers that drive action and performance, actively manage behavioral and process changes that have the most sustainable impact on the bottom line, and create connections that continually strengthen the business. What do we mean by culture fiactivationfl? Consider the experience of selling a home: With a limited renovation updates to capture maximum value. The core structural elements: a foundation, frame, electricity, and plumbingŠfoundational elements that enable the basic functionality of a houseŠare table stakes. No a home from languishing on the buyers™ list to making it the subject of a bidding war. By activating targeted elements of home design, a their desired result. In a similar way, organizations at their core are made of up the same structural elementsŠpeople, processes, behaviors results in a fiproduct,fl the organization™s culture, that can enable or derail corporate strategy. By identifying the structural elements that form and inform culture, an organization can isolate and activate those that will best enable strategic objectivesŠwhether that™s acquiring a new organization, implementing a digital platform, or launching a new product lineŠ turning fionfl dormant cultural attributes that have potential within the organization but haven™t yet been optimized to deliver. It™s critical that organizations take on culture proactively in order to maximize this alignment with business strategy; culture will develop and evolve organically over time whether or not leaders cultivate it intentionally. Culture is a long-term game, won over multiple short-term fisprints.fl Our experience has shown that culture change can begin quickly, with small wins to build momentum, but sustained shiftsŠchanges that become part of the fabric of the organizationŠrequire then turning them into habits that embed the desired culture to support the core business strategy. Tools and accelerators, to make the change go viral.
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4Our intent here is not to provide a secret sauce for assessing current one clearly articulated vision. While these are all critical foundations doneŠwe™re here to help address the finow what?fl Five steps to activate culture Before the seller can proceed with their targeted renovations, they need to be sure that they are on the same page about making changes and that they have accurately assessed where the problem areas in their home lie. Budget- and time-constrained renovations don™t leave room for indecision or mistakes and they come with the baggage and history of past fiworkfl doneŠjust as organizations must understand and embrace the culture change they are pursuing, holding themselves and others accountable to positively their current business processes, systems, and organizational levers desired strategic outcomesŠor not, as understanding the baseline is foundational to understanding where the organization can go. Step 1: Narrow your scope Vision, Mission, and Values around which your culture campaign will be centered. Just as a homeowner would never begin demolition without the guidance of a well-articulated blueprint to guide their approach and align the work back to their ultimate vision, leaders must anchor their culture work in strong organizational Vision, Mission, and Values statements, which serve as the bridge between the business strategy and the culture objectives. Gaining leadership alignment on the Vision, Mission, and Values is critical at this stage because they provide the framework to rally your employees around, to create shared commitment, and on which to base behavior change. Then, identify the target community that will best activate the desired culture. For culture change to feel organic and to build sustainable momentum, leaders must develop a thoughtful approach to drive adoption of desired behaviors among high-impact, key stakeholder groups over time. To establish scope, start by prioritizing the levers and stakeholders who will have the greatest impact and matter most to achieving desired cultural objectives. Segment the employee population to zero in on which stakeholder groups to prioritize, asking: ŁWhich stakeholder groups have the greatest need for change? ŁWhich are closest to delivery of the business objective? Ł For example, a consumer products company that hopes to shift from low-cost leader to a customer-centric organization might focus on the sales team because they work directly with customers, the marketing group because of their role in designing the customer experience, or the design team because of their political power position within the organization. While your ultimate objective might be to evolve the culture across the entire organization, better traction can be achieved by identifying and addressing groups to make the desired culture relevant to their day-to-day activities than by relying on actions that target the entire audience as a single group. Next, understand underlying business levers behaviorŠthe fiCulture Web.fl Just as the choices the seller, the architect, and the interior designer make inform the feel of a house and the type of homebuyers it attracts, choices leaders make about how they run their business shape the culture of the organization. that can be adjusted to enhance or minimize cultural attributes. What™s critical is the congruence between the business strategy and the levers that make up the fiCulture Web.fl Vision Looks forward and creates a mental image of the ideal state that the organization wishes to achieve. It is inspirational and should challenge employees. Mission A concise explanation of the organization™s reason for existence . It describes the organization™s purpose and overall intention .Values Lists the core principles that shall guide and direct the organization and its culture. Values create a moral compass for the organization and its employees.
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5Take a careful look at the current state of each of these levers, asking whether they support behaviors that enableŠor work againstŠyour strategic priorities. Identifying which levers are least supportive of the size and color within the Culture Web in this example, can inform your culture change priorities. We™ve seen organizations use workspace design to promote more collaborative behaviors, redesign performance management systems to promote transparency, and design recognition programs to reward inclusive and courageous behaviors. Or, using the consumer products example, processes that might be closest to the customer experience include using new CRM software to track customer interactions and changing the budgeting process to allow Finally, to enable activation. For the selected target populations, prioritize behaviors that lead to desired most prevalent or absent in your target community. These behaviors need to be articulated in ways that are clear and relevant in the context of what people do in their day-to-day roles. They also need to be considered in the context of the organization™s existing cultureŠin most situations, an organization is not starting from scratch and culture change is an evolution. Culture change is most successful when it is sustainable; by making these behaviors real for people, they become ingrained in the way things are done around the organization. There may be interactions, contradictions, these may need to be managed closely. Activating viral change forward. But the way work gets done in a company isn™t always what™s happening at every level in their increasingly complex, global organizations. facilitating exchanges but not necessarily as part of their day-to-day know how to get cross-functional teams talking. They™re who others go to for advice because they know how this place works and they™re willing to help. Targeting only people at the top of the org chart or those with relationships with the most senior leadership teams, means missing out on a key layer of the activation network. Organizational Network getting these individuals on board and leveraging their networks, culture activation can fast-track traditional change timelines. Illustrative Culture Web Key levers to target indicated by color and scale Operation processes & systems ŁBusiness processes ŁPolicies ŁTechnology and systems Organizational design ŁDecision-making (devolved or centralized) Ł ŁTask allocation (who does what? generalist or specialist?) Culture narrative Ł Ł Ł Talent mgmt. ŁTalent acquisition and onboarding ŁLearning & Development ŁRetention and career progression Employee experience ŁEngagement activities ŁKey moments in the employee life cycle Ł Work environment ŁPhysical layout and design Ł ŁCommunication and information sharing infrastructure Measurement ŁBudget allocation ŁIncentives Ł Illustrative example Culture Amount of change required Ad hoc Developing Supporting Competitive advantage
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6Step 2: Tell the culture story In order to get your organization on board with your cultural activation, you need employees to clearly understand what is expected of them and to buy into the change. Storytelling can catalyze a cultural transformation, taking your list of priorities and bringing it to life in a way that is meaningful to employees. It can be an incredibly powerful tool for organizations seeking to drive behavior change and to elicit new cultural outcomes. Good stories lead the audience to draw their own conclusions to illustrate cultural be broadly applicable, showing rather than telling the audience what organizational leadership is aiming for. As leaders begin to drive the cultural transformation, storytelling will be key. Just as important is developing illustrative stories across the into this change. During this step, functional leaders fitell the culture storyfl by bringing behaviors to life in a way that is relevant and accessible to their encouraging them to solicit inputs and feedback and push back. Culture must be brought to life by employees; this step helps them make it real in their context, apply it in their roles, demonstrate the adjust. This also serves as a pressure-test for the culture vision, taking the model out to the people, giving the broader organization the opportunity to look at what™s being done and to own the change by sharing ideas and being accountable for what stays and what goes. The experience of a large technology company provides a good example. After acquiring a close competitor, the company sought to maximize the value of the transaction by activating fibest of bothfl culture behaviors for the go-forward organization. In four Functional Activation workshops, culture activation leads from sales, manufacturing, product development, and shared services were tasked with bringing to life high-level behaviors outlined by leadership™s culture vision for their team, then creating action plans to embed these behaviors in the new, combined organization. Each team reviewed the guidance from leadership™s established culture vision: fitrust each other,fl fiact with courage,fl fimaintain accountability,fl etc., and translated that into meaningful statements with powerful narrative examples related to their day-to-day work. For example, product development could maintain accountability by having general managers meet quarterly to review a culture courage by fispeaking openly to raise issues and have the messy conversationsfl and shared stories of how doing this in the past had resulted in critical changes. TOOLS & ACCELERATORS: Leveraging ONA to identify your company™s How do you determine which stakeholders have the greatest quantitative approach Organizational Network Analysis (ONA) provides a visual representation of networks within your organization with a data-driven picture of how work gets done in your assessment survey) and reviewing the outputs can give you a sense of where culture interventions might have the greatest impact and ability to fi go viral ONA can identify who are not necessarily at the top of the org chart increase returns exponentially TOOLS & ACCELERATORS: Using design thinking to change A Deloitte Culture Lab these labs provide a creative space for rapid vision
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8Step 4: Build and execute your sprint plan fiCulture is like an iceberg. The bulk of it, the submerged part, comprises the shared beliefs and assumptions that are often shaped over generations and can sometimes punch a hole through titanic corporate initiatives.fl 5Ajit Kambil flCatalyzing organizational culture changefl Because culture is the result of the dynamic interaction between processes, behaviors, and beliefsŠmany of which can lie underneath the surfaceŠculture change should be approached with the understanding that initiatives will be iterative and will build upon lessons learned along the way. A detailed 24-month culture activation plan, therefore, would likely be outdated before implementation even begins. Similar to the fiminimum viable productfl approach used in agile start small, learn, improve, and build momentum. Sprints can be scaled up or down, and each should be viewed as a step in the right direction toward your long-term goal. Sprints help you to gather momentum over time, with success stories and advocates from one sprint powering future sprints. This is a great way to initiate viral change alongside a more formal, programmatic approach. Evaluate your comprehensive list of interventions to prioritize the most impactful options: behaviors that are most likely to drive quick wins and that are most critical to enabling sustainable change; behaviors that catalyze viral change by subtly encouraging other positive behavioral changes, eliminating immediate blockers, or sending a strong signal throughout the organization. It also helps to prioritize interventions that will get key groups of people to experience the organizationŠand the outcomes of their own stimulusŠbehaviorŠreward/consequence pattern is key to helping people start to change their beliefs. These foundational changes can build momentum over time, helping you to focus on your finice to haves,fl once the foundation is strong. Initiatives can be analyzed for impact and resource intensity and categorized in a 2×2 matrix to identify priorities. Other factors such as availability, duration, and interconnectivity with other initiatives can be layered onto the results of the matrix so that initiatives can be broken down into sprints. Launching culture activations as a series of iterative, nimble sprints enables the constant evaluation of impact, assessment of lessons learned, and incorporation of Figure 2. Putting it all together: Behaviors and interventions aligned to values The example below is based on a set of values intended to drive a culture of innovation, and associated behaviors and interventions that bring these values to life in the organization™s culture. Sample values Customer obsessed Constantly improving Better together Expand your lens Behaviors ŁAs an employee: Endorse the Voice of the Customer by actively seeking their input. the customer in your role, seek feedback and suggestions from other channels to incorporate into how you work. ŁAs an employee: Prioritize learning, sharing learning opportunities with your team, and foster an environment that celebrates curiosity and consistent growth. By constantly improving your knowledge and skills base, you will be able to continually innovate and drive fresh thinking in your organization. ŁAs leaders, build trust among your team by being open with your employees, and proactively prompt them to share any challenges, concerns, and risks. Be your authentic self as a manager and exemplify an fiopen doorfl policy that encourages your team to not only be communicative with each other, but also with you. ŁAs a leader: Ask provocative challenges to their people to stimulate new ideas, and provide support in response to team asks. Interventions ŁDesign an internal competition to solicit new ways of better serving ideafl awards, or a leaderboard showing areas generating the ŁKPIs and reward mechanisms support and encourage including failure. Ł with cross-silo membership, and showcase this way of working. ŁFacilitate fihackathonsfl focused on key customer or fiwickedfl business problems, with participation across business silos and/or including external groups.
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9Coaching for successful culture change sprint plan. Now you need to actually activate your cultureŠbut as we™ve discussed, culture is complex, unpredictable, and the result of many structural and individual elements interacting. Even if your leadership team is fully aligned, employees may not figetfl the change yet and may not be on board with the idea of a cultural shift. Much as a busy homeowner embarking on a renovation might hire an experienced project manager to keep the contractors and designers on the right track, monitor the budget, and ensure progress happens in a timely manner, organizations taking on Culture Enablement Coaches: Ł ŁUnderstand what barriers each team faces ŁAnalyze all aspects of the Culture WebŠthe organization™s structural elements that form and inform culture, understanding how they impact the team™s shift toward the new cultural norms Ł ŁWork as a team to bring together ideas from across the organization, cross-pollinating solutions, sharing lessons learned, and identifying priorities for the next sprint fiA day in the lifefl exampleŠCulture Enablement Coaches A Culture Enablement Coach working with a marketing team at a mid-sized consumer packaged goods company the beginning of each weekly meeting to brainstorm performance incentivesŠa key lever in the fi Culture Web and 2) the team leader has always emphasized his The Culture Enablement Coach team common issue and works with leadership to add performance metrics that incentivize innovation in peer coaching skills and framing the issue in terms focused on how critical persuades the team leader to reconsider his approach in ensure the changes stick and identifying new ways to reinforce
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10Step 5: Measure, iterate, repeat Throughout execution, progress should be consistently assessed, and the approach adjusted to ensure continuous, self-reinforcing results. The beauty of the culture sprint approach lies in the immediate only be realized by keeping a pulse on engagement and establishing an approach to self-monitoring and course correcting. Critical to the feedback mechanisms to enable teams to fifail fastfl and move forward. Measure: How do you know if it™s gone wrong? ŁUse quick, regular culture pulse checks so you™re constantly aware of whether your sprint is successful or needs to be recalibrated ŁDesign mechanisms for close communications between teams Iterate: How do you course correct? ŁKeep it freshŠregularly evaluate your list of culture-activation interventions and ensure you are keeping it up-to-date based on lessons learned and current priorities ŁLeverage cross-functional teams to bring together fresh perspectives ŁFail fastŠdon™t get attached; get comfortable with change Repeat: How can you build on previous successes? ŁReview your culture change sprint ideas; identify the next round of priorities Ł Ł at periodic intervals ŁContinue to leverage storytelling throughout the change. Build on previous successes by sharing what went well in strategic forums, and encourage employers to continue to share their own stories Your organization™s culture is an asset and an investmentŠthe key ingredient in creating a Simply IrresistibleŽ experience for your workforce and a critical tool for realizing your business strategy. It™s something you can actively shape and manage. With committed happen in your organization, and an agile sprint plan to control the levers that drive action and performance, you can activate culture and deliver dividends for your business.
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11Authors Ami Louise Rich Principal Deloitte Consulting LLP [email protected] Sonia Storr Partner Deloitte MCS Limited [email protected] Aimee Musil Manager Deloitte MCS Limited [email protected] Kate Casolaro Manager Deloitte Consulting LLP [email protected] Manager Deloitte Consulting LLP [email protected] Katherine Peterson Senior Consultant Deloitte Consulting LLP [email protected] Endnotes 1. Josh Bersin, Simply Irresistible: Engaging the 21st Century Workforce , Bersin, Deloitte Consulting LLP, April 2014. 2. Josh Bersin, fiGlassdoor SummitŠBuilding an Irresistible Employment Brand.fl YouTube video, 12:58; https://youtu.be/MVIjp3aW9G0, posted March 28, 2017. 3. Ibid. 4. Organizational Culture Maturity Model, Deloitte Development LLC, 2017. 5. Ajit Kambil, flCatalyzing organizational culture change: Executive transitions,fl Deloitte Insights, June 3, 2016.
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