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Jul 22, 2014

CEO’s continue to publicly proclaim their efforts to manage significant and meaningful culture change.

Some miss the mark and show their lack of understanding this critical topic. Others, like Satya Nadella of Microsoft, share a much clearer vision and appear like they truly “get it.”

What separates the visionary and capable culture champions from the vast majority of leaders that don’t understand the culture fundamentals?

Evolve the culture at your own peril

It can be a bold move to tackle the challenge of evolving your culture.

Some iconic leaders, like Steve Jobs and Howard Schultz, focused on leveraging many aspects of the core of their culture they helped create as part of a new strategy when they returned to the top job. Others like Mary Barra of General Motors and Satya Nadella of Microsoft made it clear that change was needed and crafted a new vision.

There have been some visible failures to drive change, like J.C. Penney and Siemens, where a lack of understanding the culture was highlighted as a major factor. Many acquisitions fail to deliver their intended results and culture clash is often identified as a problem.

Crafting an initial vision

John Kotter said that most leaders under-communicate their change vision by a factor of 10X (or even 100 or 100X). A leader’s vision will give insight into how much they understand the subject of culture and this understanding is critical to their success.

Mary Barra highlighted in her most recent testimony on the GM ignition switch crisis that “the way that you change culture is demonstrating the behavior, making sure people understand what is expected and calling them out when they don’t.”

This dramatically over-simplified and inaccurate summary of what it truly takes to evolve a culture is unfortunately too common. She is obviously doing far more to change the GM culture, but her journey is more difficult that it needs to be due to her lack of understanding culture and how it specifically evolves.

Satya Nadella clearly has a much deeper understanding of culture and has crafted a much greater vision for how culture specifically fits in his overall vision. He shared his vision in a letter to all employees that included many important points related to culture that are important for any vision for change:

Re-discovering our unique core

“At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.” He went on to clarify the “rich heritage and unique capability” of Microsoft.

A leader’s vision should show some respect for history and clarify the strengths that will be further leveraged as part of their vision. This vision should include a clear purpose for “why” the organization exists and what value it provides. The vision can’t be too far of a departure from the current culture unless it zeroes in on a specific initial phase or area of improvement.

A central theme or insight

“Productive people and organizations are the primary drivers of individual fulfillment and economic growth and we need to do everything to make the experiences and platforms that enable this ubiquitous. We will think of every user as a potential “dual user” – people who will use technology for their work or school and also deeply use it in their personal digital life.” “Microsoft will push into all corners of the globe to empower every individual as a dual user.”

Leaders often under-estimate the importance of clarity. The vision will guide behavior and a central theme or common sense insight will often bring clarity to how the purpose, that unique “why,” will be supported

The product or service focus

The letter outlined three major areas of focus – digital work and life experiences, cloud OS, and device OS and hardware. He outlined some of the critical products and services in each category along with some of the future plans.

The clarity drumbeat must continue when it comes to the products and services you provide. Don’t assume everyone truly understands your organization and what you provide.

I also found it interesting that he limited their extremely diverse offerings to three categories. There is an interesting “power of three” aspect of communication.

You’ll have a much better chance of building clarity if you limit the definition of major strategies, priorities, products, or services to three.

The espoused culture

“Our ambitions are bold and so must be our desire to change and evolve our culture. I truly believe that we spend far too much time at work for it not to drive personal meaning and satisfaction. Together we have the opportunity to create technology that impacts the planet. Nothing is off the table in how we think about shifting our culture to deliver on this core strategy.”

He went on to explain three areas (remember the “power of three”) of expected behaviors:

  1. Obsessing over our customers is everybody’s job;
  2. New training, learning and experimentation;
  3. Find ways to simplify and move faster.

He emphasized the importance of “courage in the face of opportunity” and the importance of transforming as individuals and highlighted a series of questions each employee should “ask ourselves.”

He did an outstanding job covering important culture-related fundamentals: emphasizing individual behavior change, clarifying expected behaviors, focusing on individual “impact” and the connection to organizational impact, highlighting learning that will be required, improving how work is done, and seizing the “opportunity.”

One critical insight

New cultural attributes will only evolve and be sustained through results.

A grand vision is dangerous if there isn’t an initial area of focus or some other first phase of improvement from a performance AND behavior standpoint. Progress is critical in order to build momentum.

The “culture link” of a specific performance priority and an expected behavior that needs to be further reinforced or more consistently exhibited would dramatically increase the chance of building some initial momentum. The entire organization learns from an initial area of focus and is then prepared to leverage new behaviors across other priorities and the overall organization.

Satya Nadella’s vision was outstanding but lacked clarifying this initial area of performance focus and he identified many areas of behavior change without clarifying an initial focus.

Mary Barra has been forced to focus on a specific performance area, safety, and even the specific expected behavior of “speaking up” but she lacked the broader vision and understanding about all the areas that need to be addressed for her initial focus to result in meaningful culture change.

Dealing with adversity

I don’t know if Satya Nadella will be successful. He recently communicated their intention to reduce 13,000 positions as part of a note to all employees titled “Starting to Evolve our Organization and Culture.” He appears to possess a caring and transparent leadership style that will serve him well with this transformation and unite their team to overcome many obstacles.

The GM culture crisis has been a great live culture case study, but I believe we’ll learn more about effective change from the Microsoft journey. Satya Nadella recently spoke at their Worldwide Developer Conference and ended his talk with the subject of culture.

If I was an employee at Microsoft it would be hard to disagree with his passion to “enable the employees at Microsoft to be able to bring their “A” game, do their best work, and find deeper meaning in what they do. And that’s the journey ahead of us. And it’s a continual journey.” It sounds like the type of attitude any leader needs to take with their culture journey.

What factors do you think are important aspects of a vision for the future, especially when there is a need to evolve the culture? What do you think about Satya Nadella’s vision?

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