Cultural Change? – No way!

That the frustrated conclusion from a HR manager. He is right. He makes a common experience with a lot of project teams trying to change cultural basics. There is always the hope that people will change behavior for better communication, less conflicts, higher motivation, less games between departments and managers and so on.
The methodology of change is always similar: Development of beliefs, competencies and leadership principles according a brand or new strategy. Then top-down information and start of implementation with a kick-off with the group-wide top-management. The implementation process contains seminars and workshops with a lot of exercises and discussions, the Top shows up for evening roundtables.
Participants and Management are happy – but nothing will change in the daily work.
There is no culture of continuous process improvement, no measurable impact in sales as a consequence of the training; the innovation rate does not increase and employees don’t work with higher motivation.
As result the company has nice booklets with beliefs, competencies and leadership principles – well written by PR-Agencies. It’s a shame but true: in very different companies the booklets have the same content and nearly the same layout, be it in banks, pharmaceutical, in big or middle sized companies.

And: After a few months the Management is persuaded to have fully implemented the new culture and new problems will define new priorities. After that HR is responsible without any sponsor.

What’s going wrong? The basic assumption is wrong. We cannot change behavior through information, outdoor training and workshops.

People are working in a company to make their daily living, to get rich or to have the opportunity to self-actualize personal needs like power, reputation or professional success. Over time a system finds ways to fulfill such needs for the members, it is a sort of equilibrium – with all the daily problems and conflicts. Some people leave the company, others will play more tennis ore work for payments and not more, but there are always very engaged employees.
If someone tries to change – it will be to fulfill better the personal needs and that is often not congruent with the cultural change idea. And if a company is successful, change will be perceived as a threat.

But – someone will argue – there were a lot of behavioral changes the last twenty years, as well in companies as in society: Consumer behavior, cooperation within companies, team oriented work, etc.
That is correct, but it was no intentional influence through some leaders, it was and is a system which is evolving under the lead of technical inventions and developments (often pushed by wars or national competition like between US-UDSSR).

Only one example: Internet - comparable with the consequences of the invention of the steam engine.
www was invented 1989 in Geneva (as the end of a long development process starting mid fiftieth). In 1996 were about 70 Billion users worldwide – today about 1.5 Trillion. The change wasn’t fast in the first ten years but in the last ten years dramatically fast (from 2000 to 2008 342%) and radical.
For the older generation it may be a sort of monster behind the world, for the young generation it is only one world – sometimes with a confused understanding of “reality”.
What will it be for the next generation with immense new possibilities in virtual worlds (think about neuro-chips, genetics, …).

What is interesting for the topic of cultural change? There is no managed change process; it is more a continuous iterative system development.
In inner circles the discussion about ethics and cultural values for future status starts very early, long time before a crisis, but if no bigger problems occur, it will be a more academic discussion without political influence.
In the 60-th we discussed about Mickey Mouse. We analyzed the patterns of conflict solutions, the image of women and the influence of children’s attitudes. But it was a discussion in small groups of educational scientists. Today we have a big discussions about war games, physical conflicts in school yards – new media, but same patterns.
In the 70-th we discussed new social instruments to reduce poverty like a basic lifelong personal rent and started the discussion about environmental threats and responsibilities. But only crises, the fear of consequences or new grounds for profit have given the discussion the actual importance. Now everybody discuss it and a lot of professors have “said it” years ago!!

There are similar patterns in the field of management. Let’s focus e.g. on delegation and teamwork. Thirty years ago managers told me it would be an ideological idea and very theoretical! But with new technologies and all other complexity drivers it is not possible no more to manage a system with one brain.
That means cultural change is driven by complexity and not by leadership principles. The change process happens somehow.

Cultural change is a reaction to adapt to new environmental (business, society, nature) conditions and cannot be driven by intellectual proposals, booklets and workshops.
There are only a few really creative people changing patterns through curiosity and/or anticipation.

If the named HR manager is frustrated it is his own fault. He didn’t truly analyze what his superior perceives as a threat or profitable opportunity – just now or in anticipation.
If a CEO doesn’t see an existential threat or a reliable opportunity for himself or his company, he will agree with new cultural measures, but in principal he isn’t interested at all and he will not change his behavior and also the next levels will agree and discuss but again, without any change in their behavioral attitudes.

And there is another manager (perhaps human) habit:
The first reaction in a threatening situation is to utilize all learned patterns to overcome it: Harder work, hierarchical decisions, cost saving, cash management, part time work, layoffs.

Conclusion
In normal managerial situations there will be no managed cultural change. Change will happen over time ore in crisis - perhaps.

Willi

A Vision For a Civil Society Without Work For All

Hello

The ongoing downturn shows problems we didn’t anticipate in better times. Now we discuss the role of the state in the crisis or are condemning the scrupulous behavior of companies against employees.
But, isn’t it the wrong perspective? We know in a capitalistic system a company has to find ways to survive in a constant battle of competition. Companies have to automate production lines, to organize in a lean manner to reduce costs – all the normal measures to survive in the competitive system.
For sure, I don’t agree with the reaction of many companies. I liked they would have more creative ideas to improve now processes and implement new structural ideas (as I have written in former posts), but labor unions, politics and civil society should also take responsibility for the socio-economic system.
Unions and politics are fighting for better earnings, minimal salaries, mandatory pension, work hours, etc. That’s fine, but doesn’t prevent the society from the problems we face now.

In the crisis we realize, that important mechanism are lacking: We (all over Europe I think) have no basic state pension; we have no tax for work place reduction (e.g. a tax per workplace financing two years of unemployment insurance).
In spite of different crises during the last decades, we still think in categories of work and leisure; and work is still defined in relation to GNP. That means, it ist "work" if the ambulance brings back a dead person from an accident on the highway, but it is no work to plant your own salad or to look after your mother.
Without work, you are less worth and meaningless. We didn’t develop a culture with the value to be active, involved in different activities.
As Ralf Dahrendorf postulated perhaps 30 years ago, humans don’t need work (defined by GNP), a human being wants to be active, so let’s develop an activity-oriented society (not a consumer- or leisure-oriented society).
I think our educational system is wrong too. We develop more and more diploma like Bachelors, Masters,… but what for? These diploma are work oriented, generating the hope for jobs and higher income – nobody will look for education only to develop his personality or just for fun. In contrary edu is a business itself. In principle education should be free for everybody without the possibility to make profit on the institutional side.

For all this ideas we can find examples or theories: In Denmark, I’ve seen Grundtvig-Schools where directors and young people - employed or unemployed – were involved together in different activities. There was no diploma at the end.
In the 70th economists (not left-wing people) have developed new tax and pension models .– but nothing was implemented. There was also the idea to give everybody bonuses for education at birth. But nothing was implemented

Now, in the crisis, we lack such developments and people blame managers and principles of the capitalistic system.
Again, companies should react differently as I explained in former posts, but also the civl society should act more pro-active and develop a vision for a society without work for all but meaningful activities, education and money for all. Such a vision would change also the behavior of companies.

What do you think about?

Best regards,
Willi Fehlmann

Measures for higher adaptability

Dear readers

What bothers me most in the last months is how uninspired managers deal with the crisis. Every day we read about more layoffs and other cost cutting measures. But no idea how to reorganize companies to restart very fast and to avoid the same situation in the future. It it is the same helplessness in management like in politics – as Davos has shown us.
I am no financial or economical expert, but for companies I have some ideas how to overcome the next crisis.

Improvement of Adaptability
We cannot escape and not control the complex reality of business. What’s to do? The answer is: Improve adaptability!
Adaptability has two directions. First, something is changing in the market, technology or whatever, and the company has to adapt as fast as possible to the new situation (assimilation). Second, there is an opportunity – merger, new market, research outcomes … - and the company has to take it faster than the competitors (accommodation).

There are three main factors hindering or fostering improvement of adaptability
1. Mindsets
2. Company structure
3. Organization

Mindsets
To foster adaptability you need an open minded management. Curious what could be different and open to discuss the assumptions behind decisions. A management able to use the power of the whole intelligence within the system.

What is needed is a learning culture, rewarding learning and openness. Such a culture will be also more innovative and creates faster problem-solutions.

For higher adaptability you need a Fleet Structure
Today, the question is no more about centralization or decentralization, big or small. Important is to develop the right goal setting process and the coordination of information. The network technology allows to delegate most functions to the operations. That is my picture with ships and a central “Tower”.
Ships around the world, acting as competent management systems and a central tower, to allocate information.

There are some principles to follow
• Each ship has its own market and future perspectives
• The management on a ship knows the business the best
• Ships may cooperate locally (same customers) and/or topically (logistics, aw materials) on
their own decisions
• Each ship can see and approach all others virtually

The functions of the Tower
• Set the genetic code
- What are our general business values
- What we not accept as company or individual behavior
• „Start-up“ function
- Financing a good idea with limited risks
• Goal accepting, financing and tracking
• Global information hub and Innovation Source
- Gather, analyze, interprete information from all units
- Give advice, support about opportunities and threats
• Defines the management systems
– IT/IS, Strategy Development, Goal Setting and Tracking

Using new organizational principles for higher adaptability
In my opinion the most important question will be, how to combine standardized processes with principles of self organization.
We learn from neurology that our brain manages complexity in such a way. There are standardized modules we cannot change. After a craniocerebral injury someone can’t perhaps indentify pots and other items any more, but he can recognize faces – there is a face recognition-module.
There are also visual modules. You see the world always foreshortened, but correct it through experience and knowledge.

Other processes are open organized. We learn and adapt. Imagine to be the first time in a self service restaurant. You will come in, sit down and wait. After a while you will realize: nobody want to serve you, there are no waiters. Now you start to learn: checking the situation, reorganizing your knowledge and behave in a proper way to get your food.

With such principles I am organizing complex processes. E.g. an analytical department in pharmaceuticals. There we can standardize some elements like chromatographs very easily, but let the whole group process with self-organization. We have given very few rules: Quantitative goals and GMP quality. And it works.

It is like the move from traffic lights to roundabouts. Roundabouts have in principle only one rule, but absorb more traffic with fewer accidents.

What do you think about these aspects? What is your experience in projects? What is your methodology to organize complex systems?

Thanks for your contribution.

Willi

First Post

It’s my first blog and post – I’m excited. Who will read it, who will answer it and give me continuative ideas. Swiss-German is my native language, but I hope everybody will understand and forgive me some mistakes.



Managers are Dreamers
Today I would like to tell – and hopefully to discuss afterwards – some experiences with managers the last few weeks.
There is a big lamentation about the crisis, but the reaction is mostly old fashioned cash-management. Is it about missing creativity, blindness or missing knowledge how systems work? I’m not sure about.
In a way managers are dreamers. They dream of a manageable world and manageability means “predictable and controllable”. Success depends in their opinion on good managerial systems and instruments. That explains the boom of planning and controlling tools for strategy development and implementation.
The crisis is discussed like an accident, caused by some stakeholders. My discussion partners were sure, they couldn’t make such mistakes – they are the victims now.


I don’t know what’s needed those managers accept, that the future is not predictable and we can’t manage no more in the old understanding of control. Perhaps they fear the insight: If the future is not predictable, success will be accidental. They resist reflecting the underlining assumptions to find new solutions. In the past we called it “double loop learning”. Today managers try only to improve, but always within the same assumptions.
In a biotope a lake may be a buffering element. That means we can use the environment of the lake in an extensive way, nothing will happen. But one day the lake will be slurry and the whole biotope will be dead.
In the complex field of management we don’t know the buffering elements, we don’t know which elements will form feedback loops through interactions, producing new facts we didn’t expect.
That’s the reality of complexity. Complexity is not manageable in the traditional way, it is not controllable. We have do find ways to deal with complexity to improve the probability of success – without any guarantee.
Cash Management is fine, but

“Complexity causes businesses to change in fundamental ways. Entrepreneurs who aren't prepared won't know what hit them.” Jonathan Byrnes.
And that’s what happens in the crisis.


I would appreciate, if you gave me your opinion about the blog-topics and started to discuss such aspects. The next days I will concretize the matter.


Bye for now,
Willi