Culture Eats Strategy for Breakfast
CONTENTS
A. Corporate Culture and The Role of Tribes
B. Resitance to Change
C. Re-organization
D. Communicating the Strategy
1. Pike's Adult Laws of Learning
E. Overcomming Resistance - Haier's Sledgehammer
A. Corporate Culture and The Role of Teamwork ("Tribes")
Culture may be referred to as “how we do things around here.” That can apply to a department, division, whole company, region, nation -- or to a global religion. The extensive research on the subject tends to focus on macro-cultures, national characteristics, or, for instance, “the role of Islam in doing business in the Middle East.”
A good overview of this approach is in a thorough presentation of ca. 60 slides “Hofstede - Cultural Differences in International Managment.” An excellent book on the subject, which also pays due attention to micro-cultures, is by Charles Hampden-Turner and Fons Trompenaars: Building Cross-Cultural-Competence, How to Create Wealth from Conflicting Values, 2000. Fons Trompenaars is Dutch and earned his PhD from Wharton at the University of Pennsylvania. After graduating from Cambridge, Charles Hampden-Turner earned an MBA and a DBA from Harvard Business School. The two have an intercultural mangement consulting firm, cf. www.7d-culture.nl (The website is referring to a 7-Dimension model.)
Macro-cultures are, of course, relevant, but at least equally so are the micro-cultures being dealt with. Taking the U.S. as an example: by and large most U.S. citizens celebrate Thanksgiving and Halloween, watch the Super Bowl, love - or at least tolerate - unrestricted gun ownership and exhibit, from a European perspective, a bizarre contradictory prurient-prudish attitude towards sex and alcohol. These common denominators notwithstanding, dealing with a large unionized automotive aftermarket company struggling in chilly, raining every third day, rust-belt Detroit is going to be radically different from dealing with a tiny Internet start-up thriving in warm, constantly sunny Silicon Valley.
One way of understanding the micro-culture of a company is to consider it in terms of tribes. A popular book with this approach is Tribal Leadership, Leveraging Natural Groups to Build a Thriving Organization by Dave Logan, John King, and Halee Fischer-Wright, 2008. John King co-founded Culture Sync with Dave Logan, a professor at USC's Marschall School of Business, from where Halee Rischer-Wright has her MBA. She is a partner at Culture Sync, a practicing physician, a faculty member at the University of Colorado's School of Medicine, and also President of a 400 physician group. The book is based on an eight year study of two dozen corporations entailing 24,000 persons.
At the risk of over-simplification, the authors have taken the concept of teamwork and modified it with recent work on tribes. They apply the resulting combination to groups throughout the company, i.e. its tribes. These "tribes" form a matrix organization with individuals belonging to several different ones at the same time. For instance one person at a company is a member of (1) new employees, (2) minorities, (3) HR staff and (4) Mandarin speakers, being bilingual. Another is a member of (1) veteran employees, (2) engineers (3) line management and (4) Mandarin speakers, knowing it surprisingly well, having spent years in China.
How important is the tribal connection (4) Mandarin speakers to these two persons indivdually, and to the company? Should your pet project involve China, the brand new, low level HR staff person (typically ignored by senior line managers) may have more influence on the decison maker, the grizzled veteran, than a job title indicates.
The authors divide U.S. tribes into five stages. (Their research was in the U.S. American corporate cultures will hardly correspond one to one with, for instance, the many faceted Asian, Arab or African corporate cultures.) The percentages after each stage, which one should take with a grain of salt, refer to how many of the persons/tribes they studied fell into this category.
Stage 1 (2%) - Despairing hostility, "Life sucks", characteristic of street gangs -- and the worker who "goes postal."
Stage 2 (25%) - Apathetic viction, "My life sucks", disgruntled employees (or the long term unemployed), people do not hold one another accountable, all too many government bureaucracies.
Stage 3 (49%) - Lone warrior, "I'm great, you're not", office politics, knowledge is power so information is hoarded, bad management, individual success dominates, professors, doctors, lawyers, accountants, brokers, salesmen, clergy, many high potentials and board members too.
Stage 4 (22%) - Tribal pride, "We're great, they're not", team success has precedence, the company as a learning organization, knowledge shared, will out-perform Stage 3.
Stage 5 (2%) - Innocent wonderment, "Life is great", occurs from spectacular success facing a major challenge, creates innovations, often regreses afterwards to Stage 4.
The authors emphasize coaching persons and groups to progress from one stage to the next. They are adamant that one cannot skip stages. For a company to reach stage 4, the majority of persons there must themselves be at this stage. In other words they subscribe to the concept of getting things done together, of teamwork. They share core values and have a common goal, one they perceive as a "Nobel Cause."
B. Resistance to Change
"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain of success than to take a lead in the introduction of a new order of things, because the innovation has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new." Niccolo Machiavelli (1469 - 1527) The Prince (written 1513, published post-mortem 1532).
And he was writing about change where those effected all came from the same culture. Add cultural differences to the mix, and the difficulties increase exponentially. One needs to overcome the implacable power of organizational misocainea* and its equally evil brother misoneism.* Often one seeks to introduce change with a re-organization and a major effort to communicate the strategy, which are considered in turn below. Sometimes, for instance in turnarounds, the resistance to change requires a more dramatic approach, an example of which is give at E. with Haier's Sledgehammer.
* Misocainea is the hatred of new ideas. Misoneism is the hatred of change.
C. Re-organization
Implementing a strategic shift often involves re-organizing the company, and departments within it.
"We tried hard to meet our challenges, but it seemed as if every time we were beginning to form into teams we would be re-organized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, ineffectiveness and demoralization."
This quote is frequently attributed to Gaius Petronius Arbiter (27-66 AD).1 He was a Roman courtier during the reign of Nero who is believed to have written the ironic novel Satyricon. Actually the quote is from an article in Harper´s Magazine in 1957 by Charlton Ogburn Jr. (1911 - 1988). He was commenting on his chaotic early training in Merrill´s Marauders, a special force for long-range penetration.2 It is renowned for its actions in the Burma campaign of World War II. However it achieved its victories at tremendous cost. Regardless, serving in it certainly taught Charlton Ogburn Jr. a great deal about translating tactics into execution in small teams in a challenging environment with tight deadlines.
As an aside, there are both Oriental and Occidental businesses with world-class products from world-class factories, deservedly commanding global respect. Beware of a "Marauder Strategy" leading to Pyrrhic3 victories against such powerful competitors!
D. Communicating the Strategy
Conspicuous by its absence in much of the literature about strategy is communicating it within the company, to the customers and to the world at large. How do people learn about your strategy? The following is worth bearing in mind:
1) Pike´s Laws of Adult Learning
Robert W. Pike, an American trainer, wrote the excellent: Creative Training Techniques Handbook: Tips, Tactics, and How-To's for Delivering Effective Training, 1989, revised 2003. He specialilzes in training trainers, and has authored or co-authored 29 books. His most recent is The Fun Minute Manager (May 2009), which he co-authored with Robert C. Ford and John Newstrom. In Creative Training he presents five "laws of adult learning" that any coach -- or manager -- who is serious about conveying a strategy, or other signficant message, should reflect upon.
PIKE'S FIRST LAW: Adults are babies with big bodies. (Maybe, at any rate sometimes, if one considers the darker moments of office politics such as mobbing.)
PIKE´S SECOND LAW: People don´t argue with their own data. (True.)
PIKE´S THIRD LAW: Learning is directly proportional to the amount of fun you have. (Or to the carrot/stick ratio.)
PIKE´S FOURTH LAW: Learning has not taken place until behavior has changed. (Too true.)
PIKE´S FIFTH LAW:
What I hear, I forget;
What I see, I remember;
What I do, I understand.
Confucius 451 B.C.
Which one may adapt for managers (as well as consultants and executive coaches) as:
What I hear, I tend to ignore;
What I see, I tend to forget;
What I do, I remember;
What I get others to do the way I want, I understand.
E. Overcomming Resistance - Haier's Sledgehammer
A key is to gain the support of the "corporate tribes" and understand the influences upon them, including the messages from the marketplace. Above all, one needs to realize how one´s actions will be perceived. The leader's actions speak, resound and echo decibels louder and considerably longer than noiseless memos!
A competent senior manager (or mentor, consultant, executive coach) helps his group make the corporate culture work for them, to lever its strengths. That is the first step, and a prerequisite too often overlooked, in the rush to take the second, viz. to transform the existing organization to align it better with a new strategy. This kind of reasonable persuasion is all well and good. Sometimes one needs to overcome resistance with Sledgehammer Power.
"You talk the talk. You walk the walk. Now let´s see if you´re real."
They heard. They saw. They were made to do. And they did indeed come to understand.
Haier is a Chinese firm with 70,000 employees and with a world-leading 6% share of the total market for white goods (2011). The firm's origins are from a Joint Venture between the German Liebherr, the worldwide leader in premium refrigeration, and the Quindao Refrigerator Company in China. The moribund Chinese state firm, $10 million in debt, was taken over by a young tiger, Zhang Ruimin, in 1984.
A disgruntled customer appeared at the factory with a defective refrigerator. With him Zhang looked for a replacement, examining all the refrigerators in stock. Zhang discovered another 76 defective ones.
Zhang had the 76 lined up on the factory floor and had sledgehammers brought. He told the factory workers to destroy the bad product. The workers hesitated. A refrigerator at that time cost the equivalent of two years of a worker's wages.
"When Zhang saw the distress his workers exhibited, some even to the point of tears, he exclaimed: "If we don't destroy these refrigerators today, what is to be shattered by the market in the future will be this enterprise!" The refrigerators were smashed to pieces. Zhang himself took part in the attack on poor product quality. One of the hammers remains on display at company headquarters as a reminder to posterity." (Wikipedia, 2011)
The swinging sledgehammers led to standards being enforced. They heard. They saw. They were made to do. And they did indeed come to understand. Quality across the board improved. Lost customers came back and profits started a long-term climb. Of course the new emphasis on quality was conveyed in many different ways, and almost constantly. But both the footnote and the sledgehammer became company legends to convey an unforgettable quality message.
In 1991 the company was renamed Haier (the choice of name influenced by the German "Liebherr"). That same year Zhang enrolled, at the age of 42, for a Masters from the prestigious University of Science and Technology. He continues as CEO of Haier to this day (2011) and is one of the most respected and influential business leaders in China.
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1 An example of the mistaken citation is in the excellent book about management theory by John Mickletthwait and Adrain Wooldridge: Witch Doctors, Making Sense of the Management Gurus, Times Books, 1996. The quote appears on page 340 and the erroneous citation in a footnote, page 356, to "Overview of Re-engineering" Financial Times Handbook of Management, London, 1995, p. 231.
2 Merrill´s Marauders started with 2,750 men on a 1,000 mile march to disrupt Japanese operations in Feb. 1944. The unit achieved one significant victory after another without air or artillery support, not, however, without cost. When the unit was disbanded six months later in August, 1944 there were 130 combat effective soldiers left. Of these only two had not been hospitalized in the course of the campaign. The surviving Marauders received the rare distinction of all being awarded a Bronze Star for valor.
3 Pyrrhus (319 - 272 BC) was a Greek general who became King of Epirus and Macedon. He won repeated battles against Rome, often with horrendous losses.