Do You Really Know What Is Going On In Your Organisation?

We are at an inflection point:
When it comes to workplace culture, there is a large gap between what leaders think is going on and what employees say is happening on the ground.
The Hidden Value Of Culture Makers

According to the latest Accenture report – two thirds of leaders feel they create empowering environments—in which employees can be themselves, raise concerns and innovate without fear of failure— but only one third of employees agree.

This perception gap has consequences for both colleagues and customers. It results in a kind of organisational drift – an ever widening gap between what processes say should happen, and what actually happens. ‘Work as imagined by management’ versus ‘Work as is actually done by colleagues’.

In a steep hierarchy it is a happier and happier story that reaches the top ranks
Robert I. Sutton

If you just hang around organisations and watch and listen you have a much clearer picture of how things really work than you do by reading a board report or press release.

I was recently in hospital for an 11 day period, and after a while you begin to be part of the furniture – and are exposed to all sorts of unguarded conversations from staff. I’d say I had a pretty good insight into how people felt about how the trust was coping with Coronavirus and PPE supplies. A better insight than I’d get from official channels that’s for sure.

The concept of the ‘iceberg of ignorance’ – that most problems in organisations are invisible to leaders, and therefore unsolvable – was popularised by Sidney Yoshida in the late 1980’s. Whether or not the numbers are correct ( I’d suggest that executives see a lot more than 4% of the problems or even see entirely different challenges ) it remains a useful metaphor.

‘Clowns Supervised By Monkeys’ – Lessons From Boeing

On 10 March 2019 Ethiopian Airlines Flight 302 crashed just minutes after takeoff and killed all 157 people on board. The circumstances echoed an accident the previous October in which another 737 operated by Lion Air, an Indonesian carrier, had crashed and killed 189 people.

For Boeing the fatal crashes of two of its new 737 Max jets was about to shine a light on a corporate culture which had prioritised production speed over quality and safety.

The redacted emails (you can read here, here, and here) that come from documents Boeing sent to Congress show a culture in which everyone was talking about problems , but no-one was solving them.

According to Peter DeFazio the Congressman who led the investigation into the development of the 737 Max the messages “paint a deeply disturbing picture of the lengths Boeing was apparently willing to go to in order to evade scrutiny from regulators, flight crews and the flying public even as its own employees were sounding alarms internally.”

It’s too easy to blame this type of scenario on one person. This is a complex problem that involves more than just the CEO. Indeed, organisational systems and cultures often prevent people speaking truth to power, even if the ultimate boss is willing to listen. I once worked with a leader whose entire organisational department were told in explicit terms that ‘dirty linen was not to be washed in public’. Whatever the flaws and screw ups of the business unit – none of it would make it beyond the local management team.

As Amy C. Edmondson has written , the absence of psychological safety — the assurance that someone can speak up, offer ideas, point out problems, or deliver bad news without fear of retribution — can lead to disastrous results.

Most of our organisational disasters don’t kill people – they just waste people’s time. All of us have worked in organisations where large change or transformation projects have either failed completely or failed to deliver the intended results. I’m willing to bet that failure was not a surprise to you or any of your colleagues.

Why is this so common?

In psychology, there is a phenomenon called the Bystander Effect where individuals are less likely to offer help to a victim when other people are present. Indeed, the likelihood of someone taking action in a particular setting is inversely proportional to the number of people present.

The same rule holds true in most companies. Imagine a scenario where most of an organisation has the roughly the same view on the set of things that ought to be done to improve performance. Why are these changes not immediately adopted?

There’s a complex mix of reasons people walk on by – and it’s a never ending leadership task to understand why and reduce barriers to personal empowerment.

Post-COVID – Walking The Virtual Floor

It’s now almost certain that we’ll never return to the same office life that existed before. Of course we will see some go back to their default and be happy to be back in a physical office together again, but we’ll also see the other end of the spectrum where the prospects of huge savings in capital expenditure and zero travel costs lead to a default remote working plan.

This places a challenge and an opportunity:

How do you pick up the weak signals of emerging problems in a majority remote workforce?
How do you have water cooler conversations when the water cooler no longer exists?

There’s no silver bullet here. The best bosses are those who know that they are always prone to discovering blind spots about themselves, their colleagues, and problems in the organisation. They work to minimise these blind spots by remaining curious, visible and actively seeking out feedback.

When management talks about the challenges of remote work it often focuses inside out:

How do you give feedback virtually?
How do you communicate effectively?

The problem we must overcome is exactly the opposite.

How do you sense, listen and respond in a digital world?
How do you create psychologically safe virtual spaces where people can speak truth to power?

Most of us, if we are honest, choose to stay silent on some of the most obvious changes that our organisations should make. We can all be bystanders – but we don’t have to be.

Do we really know what’s happening in our own organisation? Probably not as much as we could or indeed, should.

Image by StockSnap from Pixabay

(Note: there is conjecture that the Yoshida paper, and the conference that he purportedly presented it to, is an urban myth )

The Complex Problem With Big Change Programmes

Change-washing (noun): the process of introducing reforms that purport to bring about change but fail to result in any substantive shifts in systems, services or culture. — Thea Snow and Abe Greenspoon

One of the unfortunate side-effects of writing a post that becomes popular such as People Aren’t Sick Of Change. They’re Just Sick Of Change Programmes is that you simply don’t have the time to respond to all the comments on Linkedin and Twitter.

The overwhelming majority seemed to identify with the main points, particularly the need for more Trojan Mice.

However a few people interpreted it as an attack on change management in general – and an argument in favour of just letting people free to change things as they see fit.

So let me clarify.

My default position is that most top down change programmes will fail. My experience has shown me that small, well focused changes, which are introduced on an ongoing basis in an inconspicuous way trump big change almost every time. These changes still need management though.

Your organisation is more like a living organism than a static structure. Increasingly we need to see our organisations as complex, ever-evolving, adaptive systems. That’s one of the reasons top down change programmes fail – they are too big, unwieldy and structured to cope with a living, breathing, growing, thing.

And yet… there is sometimes a need for big change programmes.

If you have a large infrastructure project , such as a digital transformation, there’s a need for unified vision and a lot of standardisation. A trojan mice approach could be disastrous – as it could reinforce silos.

Large scale transformation is about the transformation of organisations from silos, limited capability and unclear strategic goals, to being an organisation that understands the vision, that knows where it delivers the most value and how to focus on it. Doing this across a whole organisation is complicated, but is often needed if you are attempting to solve multiple problems.

When we began our transformation at Bromford we realised that we had 32 individual service areas – all of which needed better coordination.

We started by defining nine overall design principles, which leaders all signed up to before developing their own principles for each of their service areas. Doing it this way means we can better connect silos and optimise the organisation for the future. It’s a people driven approach – we hope – rather than a process driven one.

The problem for many big transformations occurs when the simple meets the complex.

Universal credit and smart motorways are two examples of big infrastructure programmes that have hit the similar problems.

Universal credit – a benefit for working-age people, replacing six benefits and merging them into one payment – was a simple vision and a correct one. The problems came about when the desired simplicity of the system also led to an oversimplified view of the life circumstances of many recipients. The early warnings from the oddly titled ‘Demonstration Pilots’ (implicit meaning – ‘we are going to do this anyway, whatever the results’ ) that this approach could hit the most vulnerable people very hard were pretty much ignored.

Smart Motorways – where drivers can use the hard shoulder – but the lane is shut down in the event of any accident or breakdown – is another simple idea that runs into trouble when it meets complexity. A physically fit single driver can abandon their vehicle and get to safety pretty quickly but that’s not so easy for the driver with disabled or young passengers. “You spend an average of more than half an hour sitting there in a broken-down vehicle praying,” say the AA. Again, lessons learned from the pilots appear to have been ignored. In the original pilot, the emergency refuge areas were 500-600 metres apart, compared with 2,500 metres on other smart motorways.

Both of these examples have run into trouble when the intended transformation meets people.

Complex, messy people.

This thinking that if we take apart processes and tasks and put them into smaller units—we can improve those parts and thus the overall performance of our business is flawed.

There seems to be a belief that if we can ‘systems think’ or PRINCE2 it to death the people will comply. Sorry – it just isn’t true.

Just like our natural systems, our organisations are not machines. As Thea and Abe write – our organisations are systems — often very large ones — that are being run by humans. “As such, they are complex and they are adaptive. This means that the path for us to change them will be unpredictable and often counter-intuitive”.

The problem with big change programmes is also their opportunity. If we can recognise that organisations are people and people are complex then we can avoid simplistic solutions – and make real sustainable change.

Indeed – redesigning organisations for the future is also about learning to live with complexity.

How Good Company Culture Can Go Bad

Here’s a sentence I never thought I’d write.

One of the best hours I spent this week was with our Governance, Risk and Assurance Team.

There – I said it.

Joking aside, the relationship between governance and innovation is an important one. As I wrote in my last post – for an organisation to support innovation the culture must accommodate the risk and uncertainty that accompanies it.

A culture of risk aversion is a culture that limits innovation. The bedrock of innovation is experimentation, and this requires a relaxed attitude to failure. That failure though has to be well governed, to make sure you don’t flagrantly waste money or harm organisational reputation.

If your innovation efforts are to be taken seriously, and to scale and spread, you need to have a mature approach to risk. At Bromford, a member of the Governance team sits on our weekly Design Group, jointly agreeing every new concept we test.

The session made me reflect on how the organisational cultures I promoted last week , can become so constraining that they start to promote the wrong behaviours.

Can good cultures go bad?

A lot of organisational assessments (Best Companies etc) seem to hold teamwork, cooperation and shared purpose up as a kind of holy grail.

However, innovation often thrives because of diversity and discord. “The idea that will get you fired” is often the best one to explore.

Strong cultures are a positive – but there’s a tipping point. A point where conflicting opinions can get stifled rather than being actively cultivated.

Phrases such as “That’s the way things get done around here” or “That person isn’t really a (insert company name) sort of person” are red flags you’re reaching that point.

In The Three Box Solution by VG Govindarajan he proposes a simple test to assess the size of the challenge in forgetting your organisational past.

Here are some of the questions:

We primarily promote from within
Our culture is homogeneous
We have a strong culture
Employees have a long tenure
We rarely recruit from outside apart from entry level positions
When people are recruited from outside, we have strong socialisation methods
We have a track record of success
We don’t mess with success
The senior management team has a long tenure and has also worked primarily in our sector

VG asks us to answer the questions scoring 1-5, with 1 representing ‘strongly disagree’, and 5 representing ‘strongly agree’. The higher the score the bigger the challenge.

I ran my own organisation through this and found we score pretty highly. As VG teaches us – this is not cause to throw our heads into our hands and despair. Rather it’s about surfacing awareness of the weight of our history – and the chains we may need to break to move forward.

This history can lead to what Donald Sull called active intertia, which is when managers get stuck in a rut so that when an entirely new situation arises they revert to old responses. Active inertia, Sull says, is “management’s tendency to respond to the most disruptive changes by accelerating activities that succeeded in the past”.

These can become cultures built around an excessive drive for performance at all costs, where status is more important than relationships based on equality, challenge and collaboration.

How can we mitigate against this? In the session this week we discussed the following activities:

Keeping teams curious. Encourage them to go out and explore the wider world beyond the office door. Maintain a high degree of customer closeness and never believe your hype.
Maintain relationships with people who actively disagree with you. This means embracing misfits – not rejecting them from “your” culture.
Go beyond your sector and generally avoid the places your peers gather. People are working on the same things as us across the globe and we won’t solve things on our own. We are desperately inward looking as sectors.
Encourage informal teams to work on cross cutting problems. More work in innovative organisations is accomplished through informal teams than formal ones.
Have the right set of organisational design principles that ensures your company is joined up and consistent. However this needs to be capable of challenge , so the way we do things around here is constantly under scrutiny and capable of iteration.

Contained in our own personal and organisational histories are thousands of assumptions. Assumptions that we live by everyday.

Organisational DNA can become so baked in that we don’t even question what we are doing.

A crucial part of keeping a good company culture is about challenging our assumptions about why we do what we do, how we do it, and who does it.

Everyday.

Creating The Right Culture For Innovation and Change

I’m not sure I buy into the concept of organisations having a culture of innovation.

After all, innovation is a process consisting of four things:

Having an idea that solves a problem
Doing something with that idea
Proving that it delivers new value for people
Translating it into reality and making it part of the everyday

The idea then that innovation is everyone’s job is naive at best. Successful organisations need to be boringly reliable and radically disruptive at the same time, living with two competing sets of values.

However I do believe in creating the right culture for innovation.

Indeed, for an organisation to support innovation the culture must accommodate the risk and uncertainty that accompanies it.

What kind of culture are we looking for?

For me there are four elements to this:

Just enough friction: the most effective teams have regular, intense debates. As leaders, we need to help our teams disagree more. Discord has to be allowed to take its proper place if we are to solve the problems that matter.

The practice of high standards: innovation requires a set of crosscutting practices and processes to structure, organise, and encourage it. This requires a steady supply of high performing people who are committed. And if you create an environment of energy and high performance it will attract other high performers.

Permission to be different: a culture where it’s allowable, even encouraged, to push back. Everyone should be OK with questioning assumptions, calling out inconsistent behavior and challenging old business models.

The ability to think and act experimentally: a tolerance for failure through practical experiments that show whether the fundamental assumptions about innovation are correct and what they mean for the business.

These traits only happen through a commitment to creating the right conditions. These are cultures that are reinforced every day, not just by the leadership , but with active collaboration from people at every tier of the organisation.

Let’s face it – most Mission Statements and Company Values are a complete waste of time. They exist as tacked up bits of paper on a wall rather than something that sits in the hearts and minds of people.

Here are three organisations from very different industries whose values are conducive to supporting innovation:

Zappos

Zappos , the online shoe and clothing store, are known for their unique culture and values. Their CEO Tony Hsieh has said his company’s number one priority is the company culture. “Our whole belief is that if we get the culture right, then most of the other stuff, like delivering great customer service or building a long-term enduring brand or business, will just be a natural by-product of that.”

Here are the Zappos core values that are designed to be different:

Deliver WOW Through Service
Embrace and Drive Change
Create Fun and A Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With Communication
Build a Positive Team and Family Spirit
Do More With Less
Be Passionate and Determined
Be Humble

With the call to “create fun and a little weirdness”, Zappos are making it a place that supports innovation.

Buffer

I love the culture of Buffer, a service that helps you share to social networks. You can feel the genuine enthusiasm for the organisation from the people who work there and what they tweet and blog about.

The Buffer team has jointly decided which words define the culture and put together this list of the 10 Buffer Values and how they live them.

What’s impressive here is that they are a continual work in progress, with all members developing them in the open.

Having dealt with Buffer on a number of occasions I can say their values are displayed both in 1:1 dealings and in their online social presence: Listen First , Then Listen More.

Bromford

(Disclosure: I work for Bromford and have a hand in developing the DNA – but I think it’s worth sharing the story)

Imagine screwing up your mission statement , vision and values and handing it over to three colleagues to start all over again and pitch it direct to the CEO. That’s what Bromford did and it’s how they came up with their original Bromford DNA.

The latest version of the DNA though, developed under new CEO Robert Nettleton, had a completely different genesis – focusing on collaboration. Bromford held more than 30 workshops with over 500 colleagues attending and sharing their views. After these sessions a smaller group of colleagues took part in a fusion session with Bromford Lab – and from this the final definitions of our DNA emerged.

The fact so many people have co-developed the DNA gives Bromford a head start in embedding the culture. When you’ve energised the early adopters, you have given the framework for the culture added impetus and traction.

Bromford have even provided colleagues with a personalised notebook for them to record their actions and barriers to consistently living the DNA.

Supporting ideas from fruition, selecting the best ones, experimenting and growing them is a very fragile process.

All we can really do as leaders is to create a climate that supports innovation – a climate that will help to sustain a future ready organisation over the years to come.