How to Transform a Business Culture

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Imagination idea and transition concept as a leaf changing to a butterfly shape as a fantasy travel and amazing inspirational spirit symbol in a 3D illustration style.So, you’ve snagged a big client or a senior leadership position. The company that is hiring you has seen the results of your previous projects, and they want you to start a very large global project (enterprise level) at numerous locations. You, of course, say, “We can do anything you want.” This is a typical response from most consulting companies and executives. The instant promise of being able to deliver amazing results without even understanding the business model, or more importantly the current state of the company. You tell senior executives that it is as simple as putting some visuals in place, running some events, tightening up on the management team, and you will have the company trimmed out in no time. The true facts of the matter are that results that are promised can’t be delivered because the time frame is too short for the complexity of the real issues, or the culture isn’t ready for the changes you have in mind. It’s easy to say: “ it’s all about the culture,” but knowing how to transform said business culture is the hard part.

You can look at a company’s Lean journey like a fraction. Twenty percent will be teaching and applying a Lean Six Sigma toolset and theory; the other eighty percent will be the transformation of the existing business culture. Cultural transformation is about changing habits, the ways of working, and the current belief system. To change a belief system, you need to create a new system. This will definitely be the most time consuming and challenging aspect of just about any project. It is difficult enough to get a mature culture to transform let alone a damaged one. What can create a damaged business culture? Some examples are low pay, poor working conditions, no opportunity for advancement or development, no succession planning, poor staff recognition, etc. So, it is imperative that you know the company’s existing culture before attempting any changes.

A good way to evaluate the workforce’s willingness to change, favorability, and engagement is through a survey. The survey should have specific categories built around development, job satisfaction, compensation, the perception of management, etc. This is what you could call pre-work. Now, normally when companies do a survey, they just look at the data and say, “Wow look how poor we did.”  Instead, what they should be doing is creating employee focus groups so that the employees can help solve their own issues. These groups need to work with all levels of management, so input can be collected from all the different staff categories. This does several things: it allows employees at all levels to have open conversations about real issues the workforce is facing. It also provides an opportunity for development in order to assist in solving real management issues. Sometimes hourly employees come up with great projects and fixes for systemic issues, or they realize everything isn’t that easy to fix (walking in someone else’s shoes). Either way, it is a positive experience that can help to increase employee engagement, favorability, and communication.

These surveys should be done every year or eighteen months; for they can show improvements, and create a measurement of employee favorability or engagement. Handle the results like any other metric for revenue, inventory turnover, operating income, etc. Monitor the score and strive to have a workforce where at least 76% of employees would recommend working there (this is considered world class). Allow employees to share the success of their focus group projects with all.

How do we, as leaders, design a system to build the culture and meet business objectives?

The first step, which is the simplest yet usually skipped, is communication. When it comes to consistency, frequency, and depth, have you ever worked for a company where management has three- or four-hour long meetings a day, but only meet with hourly employees on a quarterly basis if that? This type of atmosphere will create a bullwhip effect of rumors, resentment, and misalignment of strategies and objectives. Targets and milestones will be missed for both projects and daily customer requirements. Employees create their own systems to deal with issues, and it becomes almost impossible to identify the source or process that failed. So, what’s the answer from a Lean perspective? The answer is Leadership Standard Work. This subject is sometimes confused with scheduled staff meetings, toolbox meetings, or general management communication.

What is Leadership Standard Work?

Operators have standard work for their value-added activities and so should leadership at all levels. The core of Leadership Standard Work, which everyone knows is the Gemba (which refers to observations made where the process occurs). Some of the other components of Leadership Standard Work are usually overlooked and not managed properly. They are reflection meetings, Andon responses, accountability processes, and mentoring. I will briefly cover them all below.

Gemba

  • Visuals need to be in place to identify normal abnormal (e.g., on-schedule, off-schedule).
  • A Gemba is not just a social visit where we discuss our weekend or football games (not saying you don’t have to be personable and pleasant just goal and data-oriented as well).
  • Establish metrics to be discussed and standard questions to be asked every time you Gemba.
  • Ensure your route covers all areas of the business.
  • Design your Gemba for all levels Executive, Managers, Supervisors, etc. All will require different frequencies, scopes, and questions.

Reflection Meetings

  • These meetings are to solve problems observed and recorded through the Gemba.
  • Meetings should include process owners from each functional area, operations, finance, sales, HR, etc.
  • Discuss issues using tools such as A3, PDCA, Root Cause Analysis, DMAIC (whatever fits your needs, it just has to be hypothesis tested, data-driven problem-solving).
  • Create a different theme (for the problem statement) for each meeting to keep everyone engaged.
  • Gemba is to see, and reflection is to solve.
  • Once again, create standards for all levels.

Andon Responses

  • Andon doesn’t have to be a light or flag; it can be as simple as an email.
  • There just has to be an established system to elevate or escalate a problem when a process stops or breaks down. This is valuable in the business process as well as in operations.
  • Ensure there are checks and balances to adjust the process and document Andon and share lessons learned about why the process broke down.

Accountability Processes

  • Focus on the process, not the people.
  • Create visuals to display process improvements through projects.
  • Create standard work on how to handle missed milestones and action items.

Mentorship

  • This one is an issue at most organizations; this has nothing to do with merit increases or performance reviews. This has to do with career growth and development.
  • There should be regularly scheduled mentorship meetings for different levels, Executive, Supervisor, Manager, etc.
  • Create a standard to track the progress of goals and record communication.

One thing that I have learned while working with new clients is that it is important to be mindful that everyone is an expert in his or her own right. Most employees have held certain jobs because of their ability to execute at least to a certain extent. Even if a business is in a poor state, it doesn’t always speak to the talent within the organization. Usually, it’s an indication of its leadership. Obviously, it may also just be an uncontrollable factor such as market conditions, economic downturns, mother nature, etc. It is our responsibility as change agents to constantly transform the business culture.

So, we know how important the company culture is, and leadership and consultants are trained to say it on a daily basis (whether they believe it or not), “focus on the culture.” I promise you if you approach building the corporate culture in a structured nurturing manner using Leadership Standard Work and believe in it, you will share great success!

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