CULTURE CHANGE from the outside In

Article excerpt

TO IMPLEMENT A NEW BRAND, LEADERS NEED TO START WITH DETERMINING HOW THEY WANT THEIR BEST CUSTOMERS TO SEE THEIR ORGANIZATION.

A senior executive called recently and said he wanted to change his organization's culture. When I asked what he had in mind, he talked about feeling that the underlying norms, values and ways of working were not effective and that he wanted to bring his top team together to discuss how to build a new workplace culture. With a new statement of his organization's desired culture, he could then help employees behave consistent with the new thinking.

He is partially right.

Culture changes patterns, not just events. Many executives are seduced by events such as off-site meetings, communications forums, tweaks in compensation systems and public announcements. Often events like these for fostering fundamental change are as effective as fad diets.

Culture change focuses on new patterns of activities and what employees do without thinking. The senior executive's desire to redefine and reshape patterns of activity is a wise decision.

But too often, executives define culture from the inside out: our behavior, our values, our norms, our ways of working. In these cases, cultural discussions occur when execulives gather, diagnose faulty patterns and discuss new ways of working together. These internally focused culture-change efforts generally fall short.

It's better to redefine culture from the outside in. Think of culture as the identity of the firm in the minds of the best customers (or investors). Think of culture as your firm's brand. Instead of executives diagnosing what they perceive as the desired culture, start the culture discussion by figuring out what key customers want your organization to be known for. By focusing on customers, culture change is not just a nice thing to do, but a source for establishing sustained customer commitment.

Strong brands foster both increased customer loyalty and revenue for the same product. When airports began adding branded restaurants, revenue per square foot reportedly jumped 30 percent to 40 percent. By aligning corporate culture inside with firm brand outside, you find not only a new way of working but also the right way of working.

When the executive mentioned above realized that his desire to change his organizalion's culture should begin with gaining clarily about his firm's brand and customer expectations, he began to broaden his view of culture. Culture change became more than an off-site team rally. It was a fundamental repositioning of his organization so that it was even more focused on meeting the needs of targeted customers. He committed to four steps to build a culture from the outside in.

STEP 1:

GAIN CLARITY OF WHAT WE WANT TO BE KNOWN FOR BY OUR BEST CUSTOMERS (OR OTHER EXTERNAL STAKEHOLDERS).

When the executive first brought his 12-member management team together to talk about culture, each person was asked to respond to the question "What are the top three things we (our organization) want to be known for by our best customers in the future?" When the answers were grouped by similarity, the top three clusters contained 20 of the 36 answers, or about a 55 percent unity. The other 16 answers detailed positive images of what the organization could be known for. The team then discussed what they wanted the firm's brand to be. The team members looked at customer surveys, focus groups and the organizalion's history to determine how they wanted to distinguish the company.

After a few hours, they named the top three things they wanted their best customers to associate with their organization.

In the past 15 years, I have facilitated hundreds of these exercises for large and small companies and for divisions of companies-for their HR departments, for example. My rule of thumb is that the senior team should have about an 80 percent consensus of what they want their organization to be known for by their best customers. …