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Booz & Company
A Perspective on Organizational CultureJon Katzenbach
February 1, 2011 Webinar
Booz & Company 1
Culture matters—it can make or break your company
“There are three critical things
core to my role as CEO that
I can’t delegate: cheerleader
telling the story, getting the
culture right, and getting the
people right.”
Steve Ballmer, Microsoft CEO
“If you get the culture right,
most of the other stuff will
just take care of itself.”
Tony Hsieh
Founder and CEO, Zappos.com
“Fixing culture is the most
critical – and most difficult –
part of corporate
transformation.”
Lou Gerstner
Retired CEO, IBM
“No company can sell
employees on a culture if it
isn’t practiced – and believed
in – from the very top down.”
Colleen Barrett
Former President, Southwest Airlines
Booz & Company 2
So what is this fuzzy “culture” thing, really?
We Say an Organization’s Culture Is …
… its self-sustaining patterns of
behaving, feeling, thinking, and believing
Booz & Company Definition of Culture
Booz & Company 3
The existing culture can be a powerful source of energy for performance improvements
Key Considerations
� Always think first of culture as your
source of strength
� Culture is usually a product of good
intentions and is rarely “all bad”
� Understanding “the good” about an
existing culture can accelerate change
Booz & Company 4
If you don’t have to overhaul or replace a culture, don’t
Major culture overhauls are
hard to do and often fail
It’s a long race — culture
evolves slowly
Momentum is
hard to sustain
Only attempt a major overhaul if it is really necessary
Booz & Company 5
Start with changing behaviors, not mindsets
Recommended
Practice
Common
Temptation
Blame the
current
culture
Overlook
key
behaviors
Study the
existing
culture
Develop the
culture
aspiration
Focus on
behaviors
Attack the
culture
problem
directly
Booz & Company 6
Pick your battles
* Carol Bartz in discussion at the University of Washington, July 2010 (vimeo.com/13136019).
“(Culture) is almost like having a
teenager … you have to
pick your battles” 1
Carol Bartz, Yahoo! CEO
Booz & Company 7
Focus on changing only the few critical behaviors at different levels within key populations
Work
Decision
Making
Leadership
Effectiveness
Relationship
Building
Information
Sharing
Critical Behavior Categories
Booz & Company 8
Spread the behavior changes virally
Multiple Mechanisms
Focused Networks
Pride Builder Cells
Communities
4
Booz & Company 9
Case study: Bell Canada—behavior change at the front line
Cultural InterventionSituation
Spread change from 14 top managers
to 1,500+ people in 18 months
� Redesigned supporting tools and
processes
� Reinvigorated frontline pride with Pride
Community of Practice
� Diffused critical behaviors virally
through peer-to-peer story sharing, role
modeling, and informal contacts
� Identified and mobilized “pride builder”
managers
© 2005 Ted Goff
Need to transform
from regulated utility to
customer-centric mind-set
Booz & Company 10
Appeal to rational and emotional forces to reinforce the new behavior patterns and achieve lasting change
Balancing Formal and Informal
Formal
Alignment
Informal
Motivation
Communities
& NetworksVision
& Values
Strategy
Structure
& Process
Purpose
Commitment
& Pride
“Front Line”
Top Leadership
Culture Evolution
Booz & Company 11
Case study: Aetna—using culture to catalyze a turnaround
� Company near
bankruptcy
� Three CEOs tried
and failed
� Programmatic
change resisted by
“nice” culture
� Relentless cost
cutting discouraged
employees
Jack Rowe’s Cultural InterventionSituation
Formal
� Realigned strategy
and organization
� Set clear goals; pushed
accountability down
� Formed new councils
� Made employee
satisfaction a key metric
� Launched awards
program
Informal
� Developed leadership
forums to strengthen
informal networks
� Identified critical
behavior changes
� Launched pride-
building program
� Fostered committed
employees across
levels
Included:
Restored pride; stock price up 7-fold, 2000-2005
Booz & Company 12
Three key takeaways
Work with the
culture you have
Focus on
behaviors
Balance the formal
and informal
1 2 3
Booz & Company 13
For more information
� Visit us at www.KatzenbachCenter.com
� Contact us at [email protected]
– Learn more about our latest thinking on culture
– Discover our perspective on leadership, organization, and human capital issues
– Sign up to receive the publications of the Katzenbach Center
We appreciate your interest in the Katzenbach Center
and warmly welcome your comments and questions
Booz & Company 1414
Booz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations. Our founder, Edwin Booz, defined the profession when he established the first management consulting firm in 1914.
Today, with more than 3,300 people in 61 offices around the world, we bring foresight and knowledge, deep functional expertise, and a practical approach to building capabilities anddelivering real impact. We work closely with our clients to create and deliver essential advantage. The independent White Space report ranked Booz & Company #1 among consulting firms for “the best thought leadership” in 2010.
For our management magazine strategy+business, visit strategy-business.com.
Visit booz.com to learn more about Booz & Company.
©2011 Booz & Company Inc.
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