“The trouble with organizing a thing is that pretty soon folks get to paying more attention to the organization than to what they’re organized for.” ~ Laura Ingalls Wilder
Course Curator: Dr. G. Danford (London Business School MBA, Helsinki School of Economics PhD)
Eight MBA-level sessions covering: Models of change, structural barriers, cultural challenges, and the implementation of change. Speakers include: business school professors (Harvard, Stanford…), corporations (McKinsey, Bain & Co…) and more.
BEFORE YOU BEGIN: We recommend that you test your understanding of this sessions content.
WHY? Because the MOST VALID method for measuring learning is to compare results from a pre/post test of content.
Please make a note of your score for comparison purposes, at the end of this session.
Time Required: 35 min.
1.0 Cultural Structure
- What is sense-making leadership activity?
- How to combine social network analysis and interpretation of meaning.
- Learning Organizations A NEW CHANGE MANAGEMENT TOOL
LEARNING MOMENTS from this session:
- Organizational culture affects the way people and groups interact with each other, and how much employees identify with an organization.
- Culture controls organizational expression. However, change involves new learning at the level of the individual, the group and the inter-group.
- There is no single “type” of organizational culture, however commonalities do exist.
- Entrepreneurial Organizational Culture (EOC) is a system of shared values, beliefs and norms between members of an organization.
- If people can’t remember what you said, they can’t take action… so you must create a story!
- People are better persuaded for change, by the reasons which they have themselves discovered.
- There’s a belief that we are all living in some post-modernist, egalitarian, merit-based paradise, and that everything is different in organizations now. In reality, it’s not! Power does matters.
- ‘Cognitive dissonance’ is the mental stress or discomfort experienced by an individual who is holding two or more contradictory beliefs, ideas, or values at the same time.
- During change, many people – particularly at senior levels – have to unlearn behaviors.
- Organizations do not organically develop into learning organizations; there are factors necessary for prompting this change.
- Successful organisations have to be able to adjust quickly to change. ‘Learning organizations’ is one way to achieve that.
1.1 Organizational Culture
Organizational culture encompasses values and behaviors that contribute to the unique social and psychological environment of an organization. Culture includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.
Organizational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations. It is also the pattern of collective behaviors and assumptions that are taught to new organizational members as a way of perceiving and, even, thinking and feeling.
Thus, organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. In addition, organizational culture may affect how much employees identify with an organization. Whatever else organizations may be (problem-solving instruments, socio-technical systems, reward systems, and so on), they are political structures.
Case: HR @Google
‘Many people—particularly at senior levels—have to unlearn behaviors when they join Google. As an example, credibility and influence at Google does not come from ones title, and it doesn’t come from authority. It comes from your ability to articulate a position, and then argue it successfully. Politics is crushed in the company.’
- Google think it’s important to have informal places for people to interact and come together.
- Google don’t believe that you can force or manufacture innovation, but we do believe you can create a higher likelihood of serendipity by causing people to interact more and creating an environment where people are freer to come up with ideas.
- Google want Googlers personal lives, and Google lives to run efficiently.
- The mission of the Google, more than anything else, keeps Googlers engaged and motivated.
- Within Google, there is a bundled notion of: freedom, transparency and access to information. Googlers get lots of information about what’s going on. Googlers have resources. Googlers can try things. Googlers can experiment, and Googlers can fail, learn from from those failures, move on, and do great things.
Laszlo Bock, Vice President, People Operations Google
Case: Google ‘People Advantage’ (2:30)
Laszlo Bock, Senior Vice President of People Operations, Google
NOTE: this video will start and stop at the pre-assigned times 0:24-3:01
1. 2 Classifying Cultures
Several methods have been used to classify organizational culture. While there is no single “type” of organizational culture and organizational cultures vary widely from one organization to the next, commonalities do exist and some researchers have developed models to describe different indicators of organizational cultures.
Hofstede (1980) looked for differences between over 160 000 IBM employees in 50 different countries and three regions of the world, in an attempt to find aspects of culture that might influence business behavior. Cultural differences reflect differences in thinking and social action, and even in “mental programs”. Hofstede defined five dimensions of culture (source: wikipedia.org):
- Power Distance: A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.
- Uncertainty Avoidance: The coping with uncertainty about the future. organizations deal with it with technology, law andrituals or in two ways – rational and non-rational, with rituals being the non-rational.
- Individualism vs. Collectivism: Collectivist societies have more emotional dependence on members in their organizations
- Masculinity vs. Femininity: Reflects whether a certain society is predominantly male or female in terms of cultural values, gender rolesand power relations.
- Long- vs. Short-Term Orientation: Long-term orientation dimension can be interpreted as dealing with society’s search for virtue. People believe that truth depends very much on situation, context and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest, thriftiness, and perseverance in achieving results.Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth. They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results.
In the current entrepreneurial environment, models of organizational culture that predict revenues from new sources of business are developing (Stephen McGuire 2003). Entrepreneurial Organizational Culture (EOC) is a system of shared values, beliefs and norms of members of an organization which include:
- Valuing creativity.
- Tolerance of failure.
- Innovation and seizing market opportunities.
- Accepting environmental uncertainty, and competitors’ threats.
- Expecting organizational members to behave accordingly.
The Meaning Frame (5:30)
NOTE: this video will start and stop at the pre-assigned times 0:18-5:38
1.3 The 4 C’s of Persuasion
The 4 C’s of persuasion allow us to create meaning for others. The 4 C’s include:
- Credibility: Achieved by making expertise vivid and by using informal networks.
- Common Ground: Making issues apparent and meaningful for others.
- Compelling Evidence: Stories often decide for others, not data.
- Connect: Emotional tuning with others which resonates with them and their perception of the situation.
“People are generally better persuaded by the reasons which they have themselves discovered than by those which have come into the mind of others.” ~ Blaise Pascal 1623
Case: Storytelling @Nike
According to Robert Dickman (co-author ‘Elements of Persuasion’), “story is a fact wrapped around an emotion, and that fact and emotion together, cause that we take action.” If people can’t remember what you said, they can’t take action, so you must create a story! A great story has five basic elements:
- The Passion with which it is told.
- A Hero that leads us through the story and allows us to see it through his eyes.
- An Antagonist or obstacle that needs to be overcome.
- A moment of Awareness that allows the hero, and us, to prevail.
- The Transformation that naturally results.
Nike is a company that has embraced the power of the story ever sine their foundation. Already in the 1970’s, Nike executives were given the role of “Corporate Storytellers”, as part of the corporate culture. The Nike stories which emerged over the years since, range from stories about the company history “the Nike story”, to the many stories of athletes accomplishing unimaginable goals. Nike understood that helping employees understand the company’s past, helped shape the company’s future.
‘Bill Bowerman (co-founder Nike) went to his workshop one day and poured shoe rubber into the family waffle iron. That was the birth of the famous Nike waffle sole.’
Telling stories at Nike supports “the spirit of innovation” at the shoe company. The stories also help connect new employees to the Nike roots, heritage and culture. At Nike, storytelling is still used to share the Nike mission, inspire commitment, enhance performance, and sell shoes. Storytelling at Nike’s a powerful medium, and tool that makes the difference between an extraordinary brand, or just another brand.
Robert Dickman, co-author ‘Elements of Persuasion’
NOTE: this video will start and stop at the pre-assigned times 3:01-5:40
Take A Pomodoro Break Now (5 min. to relax & reflect)
Learning always benefits from short breaks.
1.4 Persuasion Power
“The trust of the people in the leaders reflects the confidence of the leaders in the people.” ~ Paulo Freire
Persuasion is an umbrella term of influence. Persuasion can attempt to influence a person’s beliefs, attitudes, intentions, motivations, or behaviors. In business, persuasion is a process aimed at changing a person’s (or a group’s) attitude or behavior toward some event, idea, object, or other person(s), by using written or spoken words to convey information, feelings, or reasoning, or a combination thereof. One of the challenges in persuading others is the presence of cognitive dissonance (Leon Festinger).
The theory of cognitive dissonance focuses on how humans strive for internal consistency. An individual who experiences inconsistency (dissonance) tends to become psychologically uncomfortable, and is motivated to try to reduce this dissonance—as well as actively avoid situations and information likely to increase it. Persuasion, therefore, is acting on the mental stress or discomfort experienced during any change process (source: wikipedia).
Cognitive dissonance is the mental stress or discomfort experienced by an individual who is holding two or more contradictory beliefs, ideas, or values at the same time, performs an action that is contradictory to one or more of those beliefs, ideas or values, or is confronted by new information that conflicts with existing beliefs, ideas, or values.
‘Companies that invest time and energy to understand their networks and collaborative relationships greatly improve their chances of making successful organizational changes. Sophisticated approaches can map networks and identify the key points of connectivity where value is created or destroyed.A network approach can help companies to make change stick by working through influential employees, to focus on points in the network where relationships should be expanded or reduced, and to measure the effectiveness of major initiatives’. (McKinsey)
Formal organizational charts hide the complex relationships in organizational networks that crisscross the borders of functions, hierarchies, and business units. These networks define the way work actually gets done in today’s increasingly collaborative, knowledge-intensive companies. It’s no surprise that new projects, re-engineering of business processes (both of which are organizational-change efforts), largely ignore invisible networks. The ultimate outcome is that these efforts fail at least two-thirds of the time.
Cultural Network Analysis (5:00)
NOTE: this video will start and stop at the pre-assigned times 5:39-10:49
1.5 Change Multipliers
There’s this belief that we are all living in some post-modernist, egalitarian, merit-based paradise, and that everything is different in companies now. In reality, it’s not! In fact, in his recent research, Prof. J. Pfeffer (Stanford), explored the notion that power structures haven’t changed much over time. Pfiffer found that the way organizations operate today actually reflects hundreds of years of hierarchical power structures, and remains unchanged because these structures ‘can be linked to survival advantages’ in the workplace. The beliefs and behaviors that go along with them, says Pfeffer, are ingrained in our collective, corporate DNA. (Source: gsb.stanford.edu)
“Most individuals, and much of the media, think the traditional power structure in business is changing and that companies are becoming more dynamic and less hierarchical. They’re wrong! ~ Prof. Jeffrey Pfeffer (Stanford).
Confidence Matters (4:00)
Prof. Jeffrey Pfeffer, Stanford Graduate School of Business
NOTE: this video will start and stop at the pre-assigned times 0:12-4:42
1.6 Learning Organizations
A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations, and this enables them to remain competitive in the business environment. Organizations do not organically develop into learning organizations; there are factors prompting their change.
A learning organization has five features (P. Senge);
- Systems Thinking (study businesses as bounded objects).
- Personal Mastery (develop a culture where personal mastery is practiced in daily life).
- Mental Models (replace confrontational attitudes with an open culture that promotes inquiry and trust).
- Shared Vision (built on the individual visions of employees at all levels of the organization).
- Team Learning (structures that facilitate team learning with features such as boundary crossing and openness).
At this stage in the course, we all understand that successful organisations have to be able to adjust quickly to change, but for all of this understanding, why do so many organisations still fail to do so? According to Michael Fullan (Professor, Ontario Institute for Studies in Education, University of Toronto) the whole systems must be involved with passion and energy, in order to get results. Based on his systems approach to change, Prof. Fullan has devised ‘6 Secrets of Change’:
- Love Your Employees. All people involved in any organisation have to be equally treated with respect. It is the total culture that counts – everybody needs to feel proud of what is being achieved. Develop an inspiring purpose that all can rally around is vital; enthusiasm is contagious.
- Connect Peers With Purpose. The larger values of the organisation and those of the individuals mesh; when information about effective practices are widely and openly shared; and when monitoring is in place to detect and address ineffective practice while consolidating effective ones.
- Capacity Building Prevails. Helping people develop capacity (competencies and motivation), and continually learning. If you don’t learn from failure, you fail to learn. Forgive and remember.
- Learning Is The Work. There is a need to address core goals relentlessly while at the same time learning continuously. There is a need to: identify critical knowledge; to ensure all are educated in doing the right thing; and verify learning and success.
- Transparency Works. Transparency is about measuring what has been agreed by all, and agreed as important. ‘Measurements’ should be guides to direct behaviour and not so powerful and not substitutes for judgement and wisdom. Transparency of measurement helps all involved develop ‘trust’.
- System’s Learn. The first task of secret six is to enact the first five secrets. Systems learn, in times of complexity, by cultivating leaders who are both confident and humble at the same time. Leaders need to take action and learn, visualize the whole while working on individual parts, look for patterns, relationships and always searching for better solutions (valuing both mastery and originality).
Learning Organizations (4:00)
Prof. David Garvin and Prof. Amy Edmondson (Harvard Business School)
NOTE: this video will start and stop at the pre-assigned times 0:41-4:42
- Whatever else organizations may be (problem-solving instruments, socio-technical systems, reward systems, and so on), they are political structures.
- Entrepreneurial Organizational Culture (EOC) is a system of shared values, beliefs and norms of members within an organization.
- Nike understood that helping employees understand the company’s past, helped them shape the company’s future.
- An individual who experiences inconsistency (dissonance), tends to become psychologically uncomfortable, and is motivated to try to reduce this dissonance—as well as actively avoid situations and information likely to increase it.
- The way organizations operate today actually reflects hundreds of years of hierarchical power structures, and remains unchanged, because these structures ‘can be linked to survival advantages’ in the workplace.
- The whole systems should be involved with passion and energy in order to get results. However, successful change efforts can begin at an individual unit level.
- Organizations do not organically develop into learning organizations; there are factors which prompt their change into learning organizations.
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FINAL Session 8/8: IMPLEMENTING CHANGE
CONTENT: The ‘Onboarding’ Model of Change, Prof. John Kotter discusses urgency, Prof. Rosabeth Moss Kanter (Harvard) on leading positive change, William Hopper on the craft of management, plus more theory (implementing change, change architecture, the change process, the Six Critical Change Tasks, the Eight Change Steps, etc.). Implementing Change
Organizational Narrative vs. Storytelling (4:30)
John Hagel, Deloitte Touche, Center for the Edge
NOTE: this video will start and stop at the pre-assigned times 8:22-13:01