Advice on changing organisational culture

I’ve written a lot in the past about how smart entrepreneurs harness company culture as a tool to drive success. Most of that work has centred around being clear on vision, mission and values and it’s never too early for founders start thinking about these things. Sometimes things go awry though and the culture needs to be changed. That’s a difficult thing to do and I’ve just come across a brilliant 2011 post by Steven Denning which sets out the problem and provides a framework for finding solutions.

If you’ve got time, go read the whole thing. For the attention starved amongst you, what follows is a summary.

Culture change is hard and often fails because culture resists change. Here’s why:

an organization’s culture comprises an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions.

The elements fit together as an mutually reinforcing system and combine to prevent any attempt to change it. That’s why single-fix changes, such as the introduction of teams, or Lean, or Agile, or Scrum, or knowledge management, or some new process, may appear to make progress for a while, but eventually the interlocking elements of the organizational culture take over and the change is inexorably drawn back into the existing organizational culture.

But if the culture isn’t working then the company won’t work until it’s fixed, and this framework lays out the tools at a manager’s disposal to create a solution.

Tools-for-changing-minds

The best approach is to start at the top and systematically work down, only using the pure ‘Power Tools’ of coercion, threats, fiat and punishments as a last resort. Common mistakes are to use the ‘Power Tools’ too early and to articulate a new vision without putting in place the management tools to get buy-in and re-enforce the message.

Those mistakes are common, but so easy to make, particularly as an investor. Just writing these sentences is bringing back painful memories of working with CEOs to articulate a new vision, strategy, or direction and then watching as months rolled by and little changed. With the benefit of this diagram it’s clear to me that when things didn’t work it was because I didn’t do enough to make sure the management tools were in place, particularly those designed to ensure top-to-bottom buy-in. That contrasts with companies where we successfully used OKR type structures to get full alignment.