Transforming Your Leadership Culture

John B. McGuire, Gary Rhodes

• Publisher: Jossey-Bass
• Year: 2009
• ISBN:
  9780470446737
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

CCL fellows McGuire and Rhodes replace the common and popular myth that change in organizational culture is beyond the reach of mere mortals. They offer a practical guide for achieving feasible culture transformation by helping leaders see how leading the culture and managing the operations are two sides of the same coin. The book provides guidance and resources that helps leaders decide: (1) what change is feasible; (2) how to set practical incremental targets of change and development; and (3) what are the tools for navigating the turbulent waters of the change process.

Part One

YOU, YOUR TEAM, AND TRANSFORMATION

1

TRANSFORMATION

Can It Be Done?

We can easily forgive a child who is afraid of the dark. The real tragedy of life is when men are afraid of the light.

—Plato

In 2002, Technology Inc., a high-tech manufacturer of precision tools, pushed its chips into the center of the table and went all in. Already number one or two in niche markets, the company wanted to keep that position and develop new product lines. At stake was the company’s hope for the future: to become more innovative and create a better working environment for all employees. The company gambled that it could shift its structure from a traditional hierarchy—a command-and-control, vertical structure—to a flat, customer-focused, process-centered organization. It committed to transforming its leadership culture as a means of transforming the organization itself. The game’s last card—the river of dreams—was revealed only after much dedicated work, but the wager paid off. Among Technology Inc.’s organizational winnings, which are still being tallied, are these:

• Turnover rates that dropped from double-digit numbers to near zero

• Previously poorly performing plants suddenly making and sustaining group-variable compensation

• A shift in metrics themselves to only three core measures

• Fifty percent reduction in product returns year after year for five years running

• A state-of-the-art talent management system that includes peer reviews; individual, group, and organizational-level compensation; coaching; and assessment and learning systems

• Zero recruitment costs due to 100 percent internal referrals of new hires

• Hierarchical, conformance-based culture transformed into a process-centered organization with a collaborative culture

Leaders today, especially senior leaders, are living in an increasingly complex and shifting new world order. The compelling challenge for leaders individually and as collectives is to develop bigger minds—new mind-sets that can anticipate and prepare organizations that secure new capabilities to address successive future challenges. This means that as a senior leader, your role is shifting too. We imagine that you experience an unsettled feeling. Gone are the days when you could simply lead and delegate from the top. You too now are a primary object of change, and you must personally take on this challenge in order to guide your organization into a demanding future. This new world has thrown its gauntlet at the feet of all leaders: it challenges everyone to face it, develop, and emerge to advance their professional cause. There is a new call to action for and new identity of leadership.

Yet a key element is missing from this discussion of how leadership faces a shifting world order. Organizations have grown skilled at developing individual leader competencies but have mostly ignored the challenge of transforming their leaders’ mind-sets from one level to the next. Today’s horizontal development within a mind-set must give way to the vertical development of bigger minds. Parochial mind-sets concerned only with the immediate environment cannot deal with the complexity the new world order has foisted on us all. Getting better at what you already do is not good enough—not because it is wrong, but because it is inadequate.

The upward development of individual leaders is necessary but not sufficient. The continuing failures of organization change efforts testify to a willful ignorance of this harsh reality. The new world order requires new consciousness to deal with it. This book is about getting those bigger individual and collective minds. Serious change is for serious people, and we are introducing a view and a process that challenge all of us to show up, stand up, and grow up.

We hold to this self-evident truth: human beings seek advancement, adaptation, and development toward increasingly complex knowledge, mastery, and harmony in their environment.

When we talk about change in this book, we mean change beyond basic adaptive improvements in response to ongoing pressures and opportunities. We mean transformation. We mean creative new leadership beliefs and mind-sets and the new orders of leadership practice they generate that are capable of permanently advancing and altering the way leadership is experienced and accomplished. Limited change can take place without altering an organization’s basic culture. Big change means a major intended shift upward in the organization’s culture. Change may be incremental and may occur daily, but transformation is quantum change. Just as the butterfly transcends but includes the caterpillar in its transformation, individual leaders, teams, and entire leadership cultures can transform their current mind-set into a new one.

Consistently in our experience, transformation begins with a major step up in the beliefs and practices within the organization’s leadership culture. Change leadership’s beliefs, and you change the culture. We know that sounds simplistic, and we don’t say it’s easy. If it were, we would not be wondering (as you may be too) why so many modern organizations are so bereft of adaptation and learning. Why does change come so hard?

Voice of Change

Imagine if the people in your leadership culture were unanimous in their response to this survey item: “Our work is united by a common goal.” At Memorial Hospital, one of the cases in this book, 90 percent of the respondents strongly agreed with this statement about a commonly held organizational direction. They also agreed that “the work of each individual is well coordinated with the work of others,” and “we are putting our shared success above our individual success.” What would you give to have this kind of shared alignment and commitment in your leadership culture and in your organization?

This chapter lays out the framework of the main ideas for seeing your organization’s leadership overall. It begins by describing how leaderships and their cultures reflect differing consistent logics and how change in those logics can be impeded by certain mind-sets. From there, it explains why changes in leadership culture must begin with the senior leaders. The chapter then lays out three basic types of leadership culture, one of which almost certainly describes your own organization. After that, it tells where your focus needs to be throughout a process of cultural change and what to make of tensions between roles of managers and leaders. Finally, it presents an overview of a general process or path to successful transformation.

But first, understand this now: change, especially large-scale organizational transformation, starts with you. You can no more delegate, defer, or demand culture change of others any more than you can delegate someone else to eat your food or drink your water.

If that sounds intimidating, then consider this piece of good news from our own experience: organizational leadership that takes on and follows through on the process of cultural transformation in support of other large changes consistently succeeds in terms of larger performance goals, while other organizations generally fail to change and struggle to survive. Think of this book as your survival guide to leading change.

Leaders, Logics, and Transformation

There is a logic to any persisting culture. A culture’s collection of beliefs and norms fits together in a meaningful way. For this reason, in the Introduction, we proposed the concept of leadership logics: distinctive, consistent mind-sets that tend to pervade the culture of leadership in every organization. For example, one system of leadership logic, which we call Dependent-Conformer, centers on the idea that a leader gives an order for someone else to carry out. This type of culture excludes nonofficial leaders from participating in the leadership collective. It leaves them and their potential waiting indefinitely to emerge.

What potential could you add by tapping the talent of unofficial leadership, allowing it to join and add value to the leadership culture?

“Lead, Follow, or Get out of the Way”

That motivational statement for decades has betrayed a belief that leadership is about few leaders and many followers. We profess that that very old idea severely limits any organization’s future. Followership maintains that the most effective human system for the maintenance and distribution of power and influence is the command-and-control hierarchy. Management control through the chain of command used to work in a stable world and still holds on in many organizations. But followership is rarely effective or efficient in a fast-and-tumble new world. We need as many leaders as we can get. The successful organizations we work with want everyone to have a shot at leading, and they regard followers as unsuccessful employees.

It’s often useful to think of leaders as including people whose titles may not suggest “leader.” This idea of nontitled leaders and their potential for joining in and advancing leadership logics raises the question of how to think of and define what all kinds of leaders have in common. We believe that the best way to do this is to talk about outcomes.

The Outcomes of Leadership: Direction, Alignment, and Commitment

We define leadership in terms of outcomes: what leadership brings about. As a collective human process, leadership can best be described as what is done to set direction, achieve alignment, and get commitment (Drath and others, 2008). Direction, alignment, commitment: we shorten the three to the acronym DAC:

• Direction. Setting direction usually implies some measure of change, from incremental to major. For a senior leader, setting direction means charting a course of vision for the organization. Strategy addresses where you are going and how you are going to get there, so setting direction is part of strategy. All significant enterprisewide change emanates from vision and strategy. In organization transformation efforts, your leadership strategy is as important as your business (or organizational) strategy. Your leadership strategy is your organization’s implicit and explicit choices about the leadership culture, its beliefs and practices, and the people (talent) systems needed to ensure success.

• Alignment. Alignment produces the right configuration of beliefs and talent in the systems, structure, and processes that enable your organization to head in the direction you have set. When leadership practices are jointly shared by the collective leadership, such alignment becomes a powerful force for change. One vital alignment is that between business strategy and leadership strategy. It provides an integrated strategic intent for the whole organization.

• Commitment. Commitment is getting the leadership culture and then the whole organization on board, believing and devoted to the direction set by your vision and strategy.

DAC as Qualities of Human Systems

It’s important to note that direction, alignment, and commitment originate as qualities of human systems. If you don’t believe us, try getting commitment from a computer operating system. Traditional management functions focus on just operational tasks. It’s important to notice that a manager’s tasks of planning, staffing, and budgeting are very different from the leader’s work in achieving the outcomes of directing, aligning, and commitment, even though all may cohabit the same human body and mind—yours.

It is often difficult to stay aware of the difference in the day-to-day press of action, but leaders of change must discern it. More often than we can count, we (and perhaps you too) see company officers spend the vast majority of their organizational time in encounters about managing changes in organizational structure or systems and almost no time focused on human system changes in the organization’s leadership culture.

Edgar Schein (1992) writes that what leadership really does is lead the organization’s culture, which makes the human system pretty much the sole territory of leadership. But he and many other experts have been reluctant to suggest or verify an actual pathway for transforming culture. We advocate developing and advancing the values and beliefs of your informal organizational culture because these are the guides by which people operate and make decisions and are, ultimately, the most powerful operating system your organization possesses.

Attitudes and Assumptions That Get in the Way

“Change the culture?” you ask. “You have got to be kidding me. How can I do that?”

You can start by examining your attitude, assumptions, and beliefs about change.

During successful organizational transformation, the leadership culture serves as a unified force for new direction, alignment, and commitment. In our experience, four general attitudes can get in the way of embarking on change. As you look at where your leaders are now, think about the extent to which any of these might be a problem.

“Just Let George Do It”: The Myth of the Great Person (CEO). You or others may believe that meaningful, sustainable organization change, including culture transformation, is possible—but only if someone like Jack Welch or Lou Gerstner is there to make it happen.

Voice of Change

Many clients come to us seeking some kind of creative, unconventional assistance with developing leadership and changing their organization, and yet the majority of them think about change in conventional training and development terms. “What programs do we need?” they ask. “Do we have the right competencies?”

Conventional thinking is not your friend when it comes to transformation. Classroom training alone won’t get you there, and neither will a focus on developing individual leader competencies. Sustainable change means developing new organizational-level capabilities. That’s what DAC offers: a different way toward developing the leadership culture you need. A few powerful organizational capabilities are much more than a cluster of ...