How Companies in Crisis, Like Uber and United Airlines, Can Change Culture
A Note From The Editor
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Companies in crisis often need a rapid culture change. Recent headlines about Uber, United Airlines, GE and General Motors put culture at the root of multiple issues. Yet, culture isn't something you can turn on a dime and change via a memo. It takes time and sustained, focused executive effort. To be successful, there are several frameworks companies should follow to shift culture more quickly.
First, you need to understand the current culture, which is challenging because culture is hard to describe and see. At MIT, culture is defined as the beliefs, habits and assumptions that drive most organizational decisions and behavior. MIT Sloan Prof. Emeritus Edgar Schein describes culture as an iceberg, with most of culture hidden "below the waterline." I think of culture as a collective set of cognitive and emotional algorithms or "routines" that our brains access automatically. Only by surfacing, naming and examining these "codes" can companies make a cultural shift.
Sparking a shift
Once you understand the problems with the current culture and know what needs to be changed, it is time to enroll a "critical mass" of leaders in your efforts. This means getting 15-25 percent of the leaders who are most visibly running the organization every day to start modeling a new way of operating. These aren't necessarily the people near the very top of the pyramid (although that helps). The majority of the critical mass should be from "centers of credibility" within the firm. They may run particularly profitable regions, manage important customers, or drive critical technologies, capabilities or expertise.
If a firm can get this population of leaders to start building a steady wave of local changes in processes, products, services and employee engagement within six to 12 months, the odds of future success go up substantially. This often takes some sort of live meeting in which leaders can talk with other leaders about the direction and strategy of the organization and revise their mental models of how they'll need to show up every day and model the culture of the future.
Steady waves of localized change
It's also important to have a lot of dialogue with employees about how they can challenge the old ways that are no longer part of success. We're now seeing Uber using a combination of classroom and online, virtual learning (with local office facilitators) to engage 6,000 leaders of an 18,000-employee firm to accelerate a cultural shift. They seem to be trying to spark a large wave of conversations about how the old "always be hustlin'" and "toe-stepping" culture -- which served them well in the early days of a "winner-take-most" market -- needs to be adapted to fit with where they're going and who they want to be.
Pacing and metrics
Then it is time to start measuring results. The key is to take an experimental, agile approach that allows for more rapid learning about where and how much to change. It's critical to find early measures of change in an organization's conversations and confidence via social media, quick online surveys and other virtual channels. These could include the self-perceived ability to serve key customers, improve a process or implement a new technology.
At the end of the day
Sparking a rapid shift requires what is basically a very old technology: sitting around a campfire. You need people swapping stories, challenging both old and new beliefs if you're going to ask them to operate in a new way. Rich campfire experiences, followed by lots of localized experiments can create enough visible evidence that change is happening that others jump aboard. In the very first months, the only evidence might be the kinds of meetings held, shifts in focus and changes in who is getting resources and recognition, but business impact can show up within 12-18 months. As for what the company is known for culturally, that'll probably take a little longer.
Related Video: Why Culture Should Be a Pillar of Your Business Strategy