Disrupt the Organizational Culture as Culture
Eats Strategy for Breakfast
Being on the right side of disruption (a radical change to the exciting industry or market due to technological innovation) requires having not just the right strategy but also the culture and leadership to execute it. Culture determines how much disruption and transformation an organization can create. Culture is either the limiting factor or the growth engine.
All-too-many organizations shy away from breakthrough strategies because they do not believe they can change their organizational culture. As the organization’s strategy shifts to address new growth opportunities, the way it functions will most likely have to change as well, along with its culture. So, the right question to ask is how – not if – an organization must change its culture to create, drive, and sustain its transformation strategy.
The goal is not to transform the culture to some ideal, “perfect” one that drives breakthrough growth. There is no such thing. The goal to develop a culture that thrives on the three beliefs necessary to chase after fastest – moving customers are openness, agency, and agility. Organizations need to constantly disrupt and transform their culture as their strategy changes. Culture transformation is not for the faint of heart and requires discipline, process, and united leadership!
Disruptive organizations should systematically and intentionally disrupt their culture to transform their organizations and drive growth. But what exactly is culture and how does it become the engine that can fast – track an organization transformation? Culture is the shared understanding of “how we do things around here.” Everyone in an organization knows and feels its culture every day. Culture, for example, lives in the minds and hearts of every person in the organization. It is emotionally felt rather than logically and rationally managed. There are no “good” or “bad” cultures. One organization can be extremely competitive, with dueling teams battling to get their approach adopted. Another makes decisions based on consensus. So, what works in one organization is anathema in another. In simple terms, culture is a set of beliefs and behaviors that define how work gets done, and what is appropriate and what not. Beliefs are the shared assumptions that people bring to work every day and that manifest throughout the organization as “things that we hold true.” Behaviors are the things that people do every day to get work done: the words that we say and the actions we take. They come from one’s beliefs about how work should be done, and in turn, reinforce such beliefs. Cultural elements – organizational structures, processes, policies, rituals, symbols, and stories – are manifestations and expressions of a culture’s underlying beliefs. That is why just putting in place new cultural elements, like a new department structure, or mandating new behaviors, like taking more risks, make little impact unless they reflect a fundamental change in the underlying beliefs. Eventually, beliefs and behaviors evolve over time, and not always for the better.
As organizations have discovered, a transformation strategy is the path the organization must navigate, while culture is the engine that determines how fast the organization will travel along the road. Every element of the organization’s culture will either pin the organization to the status quo or push it forward to a growth future.
The nickname given to cultures that seem to live and thrive a state of perpetual change are called Flux cultures. Transformation demands new beliefs and behaviors that fly in the face of those typically promoted in most corporate cultures, which traditionally focus on operational excellence and efficiency. Flux cultures instead build a foundation of trust and safety, empowering people emotional strength to confidently venture the unknown and take bold risks. People will disrupt and radically change how they work and do things only if the feel safe, because emotions, but not logic, drive change. They must believe that if they reach out and take risks, their manager, colleagues, and organization in general will be there to catch and support them. A flux culture provides safety net.
The opposite is a “Stuck Culture,” one that is stuck in the status quo and fails to nurture its employees’ ability to handle the kind of massive change that is needed to support a transformation strategy. The beliefs of stuck - and flux cultures are completely opposites.
Studies have proven that there are different types of flux cultures as there are transformation strategies, and that there is no perfect culture to drive breakthrough growth. In fact, three beliefs that have been identified that exist in flux cultures and organizations, regardless of their size or industry are: openness, agency, and action. These three beliefs are the secret sauce that enables disruptive organizations to live in a perpetual state of flux and see challenges as opportunities rather than obstacles.
The openness belief. This belief creates a foundation of trust.
Two types of openness that exist within organization. The first type regards the availability of information – how freely the organization shares things. Organization that are open, information does not flow faster from the bottom up; it also flows more frequently from top down. These organizations also share more openly not just their successes but also their problems and setbacks. They believe that more people know about them, the better able they will be to overcome obstacles. The second type regards the decision-making process. Clarifying how decisions are made increases the likelihood that people affected by a decision will support it.
In organizations that are open, decisions from the top down are more visible, and the decision-making process is also participatory. Continuous openness creates a sense of trust that there are no hidden agendas and that colleagues trust each other to be honest about any concerns or setbacks. No news is bad news. Bad news is good news, and good news is no news.
The agency belief. This belief regards giving permission to act like owners.
Organizations that believe in giving all their employees agency – that is, the capacity and permission to act independently and make their own choices – help them see themselves as owners and leaders of the transformation strategy. When they identify a need for change, they make it happen – and do so regardless of their actual title or role. Agency is more than empowerment, which is the power that comes from leaders at the top to employees at the bottom. Agency is a two-way street: power comes with responsibility and accountability. If you get to make a decision, you will also be accountable for it. Agency also smooths the power dynamics of hierarchies. When agency exists throughout the organization, the “boss” is not the manager or the executive up the chain; the employees are, driven by customer demands, needs and requirements, and not from manager or the executive up the chain. In fact, when you give people in the organization agency, managers and executives also need to be prepared to fully support their ideas, even if you disagree with them.
The action belief. This belief regards work at the speed of opportunities.
Stuck cultures see change on the horizon and slow down or even actively try to avoid it. Flux cultures do just the opposite: they speed up toward change because of the opportunities for growth it represents. The action belief is the sustained ability of an organization to recognize change opportunities and move quickly while executing at the highest level. Flux cultures prefer action over inaction, taking risks rather than seeking certainty. They look at changes and upheaval as normal and manageable and expect it to be part of their daily routine. People in organizations that believe in action do just the opposite: they develop a skeleton of a plan and put a premium on action quickly. Eventually, people in organization who believe in action do not feel the need to do something right: they feel the need to do something. And they know that the cost of not acting is far greater than the cost of making mistake.
The organization’s transformation strategy can be executed only as fast and as far as its culture allows it. To change the organization’s culture, organizations must shift the underlying beliefs and behaviors that define how work gets done. Organizations capable of driving transformation have three beliefs – openness, agency, and action – that enable them to thrive with disruption and change. And organizations can start changing their culture by identifying the beliefs that hold them back and agreeing to not act on those beliefs anymore. To replace them, identify new beliefs and behaviors that the organization must adopt. The only way to change culture is to start working differently. Begin with a quick audit by asking people across the organization what is working well and what need to improve.
Source: The Disruption Mindset. Why Some Organizations Transform While Others Fail. C. Li (2019).
Blog written by: Sherwin M. Latina May 24, 2022