illuminate s the c ultural dynamic s firms ne e d to manage in o - - PowerPoint PPT Presentation

Building an Effective Organizational Culture

Daniel Denison

I nternational I nstitute for Managem ent Developm ent

Lausanne, Sw itzerland

Denison Consulting, LLC

Ann Arbor, Michigan USA

Denison & Hooijber g’s newest book

illuminate s the c ultural dynamic s firms ne e d to manage in o rde r to re main c o mpe titive , inc luding:

• Suppo rting the fro nt line
• Cre ating strate gic alignme nt
• Cre ating o ne c ulture o ut o f many
• E

xpo rting c ulture c hange

• Building a glo bal busine ss in an

e me rging marke t

• Building a glo bal busine ss fro m an

e me rging marke t “A milestone in the c ultur e studies ar ena.”

• E

dgar

• H. Sc hein

Image by R.A. Clevenger

Norms, Behaviors and artifacts. Visible, tangible. Personal Values and Attitudes. Less visible, but can be talked about. Cultural Values and Assumptions. Usually not visible at all, often held subconsciously, rarely (if ever) questioned in everyday life.

Mindset is the Foundation

Lessons Survival Culture

Underlying Principles Visible Symbols

http://www.youtube.com/watch?v=6_WAmt3cMdk

Culture Reflects the Lessons Learned Over Tim e

Rituals, Habits, & Routines

We ¡must ¡ ¡make ¡ ¡automa+c ¡ ¡ and ¡ ¡habitual ¡ ¡... ¡as ¡many ¡ useful ¡ac+ons ¡as ¡we ¡can. ¡ ¡ ¡ The ¡more ¡of ¡the ¡details ¡of ¡

• ur ¡daily ¡life ¡we ¡can ¡hand ¡
• ver ¡to ¡the ¡effortless ¡

custody ¡of ¡automa+on, ¡the ¡ more ¡our ¡higher ¡powers ¡of ¡ mind ¡will ¡be ¡set ¡free ¡for ¡ their ¡proper ¡work. ¡ ¡ William ¡James ¡

Morrison’s essay opens with a story of a young time & motion expert trying to find a way to speed up artillery crews during WWI, just after the fall of France. He watched one of the five- man gun crews practicing in the field with their guns mounted on trailers, towed behind their trucks. Puzzled by certain aspects of their procedures, he took some slow-motion pictures of the soldiers performing the loading, aiming, and firing routines. When he ran these pictures over once or twice, he noticed something that appeared odd to him. A moment before the firing, two members of the gun crew ceased all activity and came to attention for a three-second interval extending throughout the discharge of the gun. Since this seemed like quite a waste of time, and the young time & motion expert really couldn’t make any sense of it, he asked an old artillery colonel to look at the films to see if he could explain this strange behavior. The colonel, too, was puzzled. He asked to see the pictures again. "Ah," he said when the performance was

• ver, "I have it. They are holding the horses."

Elting Morrison, Gunfire at Sea

Hold Your Horses!

Preserve & Strengthen I nvent & Perfect Unlearn & Leave Behind Rethink & Try Again Good Bad Old New Changing Culture

By Changing Rituals, Habits & Routines

I dentifying Keystone Habits

http: / / abclocal.go.com/ wabc/ story?section= resources/ traffic&id= 8495657

Carm en Bianco at MTA: FastTrack!

§ The New York City Subway System carries an average of 5.4 million passengers each day, 1.6 billion travelers each year! They journey 341 million miles each year over the 660 miles

• f track in the system.

§ How do you do maintenance on this system without pissing off a lot of people? In New York??? § In the past, they did the repair work on weekends, without interrupting service, because there was much less traffic. It was expensive, dangerous, slow, and incomplete. § Until FastTrack!

Building a High Perform ance Business Culture

Adaptability

Pattern..Trends..Market

Translating the demands of the business environment into action “Are we listening to the marketplace?”

Mission

Direction..Purpose..Blueprint

Defining a meaningful long-term direction for the organization “Do we know where we are going?”

I nvolvem ent

Com m itm ent..Ow nership Responsibility

Building human capability,

• wnership, and responsibility

“Are our people aligned and engaged?“

Consistency

System s…Structures… Processes

Defining the values and systems that are the basis of a strong culture “Does our system create leverage?”

W hat Counts…

12 8 66 29 18 82 9 11 12 68 55 63

One Hundred Year Old Manufacturing Com pany

12 8 66 29 18 82 9 11 12 68 55 63

• First in industry,

but declining

• Trying to hold on to the past
• 1st time in 20 years

failed to meet targets

• Targeted by competitors
• President operationally focused
• “We’re a team going down together

One Hundred Year Old Manufacturing Com pany

Creating Strategic Alignm ent

Global Purchasing: Executive Team

Global Purchasing: Middle Managers

Global Purchasing: Buyers

Linking Culture and Perform ance

· Innovation · Customer Satisfaction Growth

Cultur e Pr edic ts Business Per for manc e

· Stable Performance Over Time · Profitability

· Operating Performance

· Quality · Employee Satisfaction

103

separate line-of-business P&Ls that represent

45 Private Equity

Portfolio Companies a) Completed a Denison Culture Survey prior to January 2014 b) Financial data was available for same time period as DOCS

Study sample includes...

Linking Culture and Performance

Inclusion criteria…

2.5x greater EBITDA Growth and +5x greater Sales Growth for the Top half!

Linking Culture and Business Performance

• Avg. EBITDA Growth
• Avg. Sales Growth

7%

• 3%

17% 5% 2.5X +5X

• Avg. culture scores for

the Top Half

• Avg. culture scores for the

Bottom Half

NGO Case Study

I s our culture serving as a catalyst for achieving our Mission? Or is it acting as a barrier to our success?

NGO Case Study

Our m ission is to conserve the lands and w aters

• n w hich all life depends.

How do we achieve this mission? Through the dedicated efforts of our diverse staff, including m ore then 5 5 0 scientists, located in all 50 U.S. states and 33 countries. With the help of our many partners, from individuals and governments to local nonprofits and corporations. By using a non-confrontational, collaborative approach and staying true to our five unique core value

Integrity Beyond Reproach Respect for People Communities, and Cultures Commitment to Diversity One Conservancy Tangible, Lasting Results

That’s how we have done more than anyone else to advance conservation around the world since our founding in 1951.

Our Mission

NGO Case Study

√ √

√

+ Right hand/ Left hand; failure as opportunity;

Team w ork; Cooperation; I nform ation sharing

• Stakeholder feedback and contact; resistance to

change; skills needed

Path to High Perform ance

Wh Why ¡is ¡cu y ¡is ¡cultu lture ¡imp e ¡import

• rtan

ant ¡t t ¡to ¡th

• ¡the ¡

e ¡ perf erforman

• rmance ¡of ¡y

ce ¡of ¡you

• ur ¡or

r ¡organ aniz iza5 a5on

• n?

? Ho How ¡c w ¡can an ¡w ¡we ¡en e ¡ensu sure ¡effec5 e ¡effec5ve ¡an e ¡and ¡ ¡ sus sustainable ¡c ainable ¡cultur ulture ¡ e ¡ develop elopmen ment? t? Wha What ¡is ¡y t ¡is ¡your ¡curr ur ¡curren ent ¡s t ¡state? e? Wh What ¡is ¡th t ¡is ¡the ¡imp e ¡impact? act? Ho How ¡d w ¡do ¡w

• ¡we ¡t

e ¡tran ansla slate ¡r e ¡resu esult lts ¡ ¡ s ¡ ¡ in into ¡tho ¡though>ul ¡ac ugh>ul ¡ac5o 5ons? ns? Wha What ¡is ¡da t ¡is ¡data ¡t a ¡telling ¡us? elling ¡us? Ho How ¡d w ¡do ¡w

• ¡we ¡cr

e ¡crea eate ¡ ¡ e ¡ ¡ common

• mmon ¡u

¡under erstan andin ing? g?

Thank You!!