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

“A milestone in the c ultur e studies ar ena.” - E dgar H. Sc hein 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

Mindset is the Foundation 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. Image by R.A. Clevenger

Culture Reflects the Lessons Learned Over Tim e Visible Symbols Culture Lessons Survival Underlying Principles http://www.youtube.com/watch?v=6_WAmt3cMdk

Rituals, Habits, & Routines We ¡must ¡ ¡make ¡ ¡automa+c ¡ ¡ and ¡ ¡habitual ¡ ¡... ¡as ¡many ¡ useful ¡ac+ons ¡as ¡we ¡can. ¡ ¡ ¡ The ¡more ¡of ¡the ¡details ¡of ¡ our ¡daily ¡life ¡we ¡can ¡hand ¡ over ¡to ¡the ¡effortless ¡ custody ¡of ¡automa+on, ¡the ¡ more ¡our ¡higher ¡powers ¡of ¡ mind ¡will ¡be ¡set ¡free ¡for ¡ their ¡proper ¡work. ¡ ¡ William ¡James ¡

Hold Your Horses! 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 over, "I have it. They are holding the horses." Elting Morrison, Gunfire at Sea

Changing Culture By Changing Rituals, Habits & Routines Preserve I nvent Good & & Strengthen Perfect Unlearn Rethink Bad & & Leave Behind Try Again Old New

I dentifying Keystone Habits

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

Building a High Perform ance Business Culture

W hat Counts… Mission Adaptability Direction..Purpose..Blueprint Pattern..Trends..Market Defining a meaningful Translating the long-term direction demands of the for the organization business environment into action “ Do we know where we are going? ” “ Are we listening to the marketplace? ” Consistency I nvolvem ent System s…Structures… Processes Com m itm ent..Ow nership Responsibility Defining the values Building human capability, and systems that are the ownership, and responsibility basis of a strong culture “ Are our people aligned “ Does our system and engaged? “ create leverage? ”

One Hundred Year Old Manufacturing Com pany 68 29 12 11 9 18 12 55 8 66 63 82

One Hundred Year Old Manufacturing Com pany 68 • First in industry, 29 12 11 but declining • Trying to hold on to the past • 1 st time in 20 years 9 18 failed to meet targets • Targeted by competitors 12 • President operationally focused 55 • “ We ’ re a team going down together 8 66 63 82

Creating Strategic Alignm ent

Global Purchasing: Executive Team

Global Purchasing: Middle Managers

Global Purchasing: Buyers

Linking Culture and Perform ance

Cultur e Pr edic ts Business Per for manc e Growth · Stable Performance · Innovation Over Time · Customer Satisfaction · Profitability · Operating Performance · Quality · Employee Satisfaction

Linking Culture and Performance 103 Study sample includes... Inclusion criteria… a) Completed a Denison Culture Survey prior to January 2014 separate b) Financial data was line-of-business available for same time P&Ls that represent period as DOCS 45 Private Equity Portfolio Companies

Linking Culture and Business Performance Avg. culture scores for the Avg. culture scores for 2.5x Bottom Half the Top Half greater EBITDA Growth and + 5x greater Sales Growth for the Top half! Avg. EBITDA Growth 17% 2.5X 7% Avg. Sales Growth -3% 5% +5X

NGO Case Study

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?

Our Mission Our m ission is to conserve the lands and w aters on 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.

NGO Case Study

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+ 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 ortan ant ¡t t ¡to ¡th o ¡the ¡ e ¡ perf erforman ormance ¡of ¡y ce ¡of ¡you our ¡or r ¡organ aniz iza5 a5on on? ? Ho How ¡c w ¡can an ¡w ¡we ¡en e ¡ensu sure ¡effec5 e ¡effec5ve ¡an e ¡and ¡ ¡ What ¡is ¡th Wh t ¡is ¡the ¡imp e ¡impact? act? sustainable ¡c sus ainable ¡cultur ulture ¡ e ¡ develop elopmen ment? t? How ¡d Ho w ¡do ¡w o ¡we ¡t e ¡tran ansla slate ¡r e ¡resu esult lts ¡ ¡ s ¡ ¡ What ¡is ¡y Wha t ¡is ¡your ¡curr ur ¡curren ent ¡s t ¡state? e? in into ¡tho ¡though>ul ¡ac ugh>ul ¡ac5o 5ons? ns? How ¡d Ho w ¡do ¡w o ¡we ¡cr e ¡crea eate ¡ ¡ e ¡ ¡ What ¡is ¡da Wha t ¡is ¡data ¡t a ¡telling ¡us? elling ¡us? common ommon ¡u ¡under erstan andin ing? g?

Thank You!!