Energize Your Corporate Culture For Fun and Profits

January 24, 2013Kiawah Island

AnnualConference Part I:

Why Get Savvy, Now, About Formal Corporate Culture Management

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Bruce Merrifield is the President of Merrifield Consulting Group, Inc.

The conflict of interest was resolved by peer review of slide content.

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What Is Corporate Culture?• The way we do things around here (Walk>>Talk)• Fish and Water; Cosmos and Dark Matter• You have one. Is it strong, healthy, agile, can-do or…the

opposite descriptors? • They grow unconsciously: layers; temporary fixes

stay;• Generals fight last war; dated mental models,

assumptions• Your experiences with great/awful:

leaders/organizations?• Manage the culture (and subs) or it will manage you to

fading results • How do you – define, measure, manage – it?• Why is “now” a good time to address these questions? 3

Are We ALL In The Happy Spot?

Know WhyMissionVision

Know What

Strategy**

Know How

Values*

Know WhoProcess TeamsKinetic-Chain

checklist

*Shared: values, assumptions, behaviors, metrics, actions, artifacts** Sustainable UMP’s for each target customer niche

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More Specific Quiz For ALL? (1)

• How long to educate new hire to know:

• #1 Niche of customers we serve?

• 5 most (net present value) profitable customers in that niche

• The value equation metrics to be the best-- How are we best value &/or low-cost provider?

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More Specific Quiz For ALL? (2)

• How can they directly/indirectly make value/cost #s happen? -- And continuously improve by becoming a “10” (“mastery”)?-- Be a cross-trained, service-value-process

team member?-- Explain Line-of-sight for their inputs to

growing their gainshare $’s?

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• What’s in it for ME and WE (all stakeholders)?-- What if I don’t uphold contract of“Privileges ≈ Responsibility”?

• Where is this all going with integrity and pride?-- Job => career => calling-- We’re the best in the industry? We deliver

best for all stakeholders? Get “1st choice”

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More Specific Quiz For ALL? (3)

Pyramid Views on “Culture” (1)

“Top, Middles, and Bottoms:

“Tops” (CEO’s): It’s really important; my job. Short-term distractions

“Middles”– Propaganda/fantasy goals from top v. real

needs from bottoms– Tell both sides what they want to hear;

take no sides; and survive8

“Bottoms” (and audiences in general): – Glaze-over effect of “culture” – Futility of individual action: manage

nebulous, abstract, complex, collective habits and sub-cultures

– Show-up, shut-up, turn-crank v. Hobby Energy and Home Economics Savvy:

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Pyramid (Audience) Views? (2)

How to induce HE-squared??

Profit Power of Culture? “Culture isn’t one aspect of the game, it is the

game” … Lou Gerstner CEO (Re: IBM turnaround)

“Innovation accounts for 30% of our profits, culture 70%” … Ken Iverson CEO of Nucor

Top company CEO’s: “50-70%” of profit power

Wall Street Analysts: It’s vital. We ignore it.

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Zealots Teach Culture “Secrets” Disney, Zappos: tours and classes Undisguised cases: 3M, FedEx, Clark Security

Why?Know competitors can’t do it. Confuse themTheir moats for their niches are too strongEmployees who teach burn brighter Altruism for the 4%(+) that can really change96% don’t have four factors for change

(complexity alert)11

5 Factors In My Past Turnarounds

(1) Lead

(2) Net Profit Analytics

(4) Culture

(5)Execute Change

(3) Core Renewal Strategy

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Why the 4/96 split? (1)

Life-cycle reality. Once past entreprenurial-stage of company (industry) life-cycle, we:

– Standardize to mass-produce: hurts flexibility

– Size increases trust issues. Add can’t do: rules, regulations, audit compliances, etc.

– Complexity accumulates and over-stays

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More Reasons For 4/96 split? (2)– Promote from within. Generals fight last war

with dated assumptions and skills. Entrepreneurs replaced by “Stewards”• Few do abstractions anew well: • “Who else has done this?” • How do you measure the “dynamic upside”?• Change has no constituents!

(I’ve got 5 years to cash out)– Environment changes faster than company:

dying begins.– 99% of all businesses in history are dead.

Or, is “innovation” in the DNA as it is at 3M? 14

Can 96% Renew Culture?

(I’m a “middle” in a “96”firm. Futile!) But, team can start talking and tuning(?) Is “Culture Mgt.” a “best practice

(”science”) like: “JIT, TQM, Six Sigma”? – Not quite. But, “Best Practices” aren’t the

4 circles that insure “execution”– Many “gotcha” policies overshot; just

need “and/both” loosening

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Where Does A “Middle” Begin(?) Get Culture audit ideas from historical models To ask “good questions” to the right people,

then, “live into them” Be the dumb, neutral messenger; put the

risk on me: Handout-slides as discussion starters Youtube clips (merrifield.com, 338, 8 playlists) Playlist 8: 1-29 on “Culture Management”

Massive education of “Bottoms” to know the “knows”? ….YT, PL 5: 1-86 “Achieving Value”

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Start Noticing Culture Elements

Patient, open-minded, anthropologist approach What are gaps between “talk” and “walk” ?

Real: political power, calendar time, funding, cuts, winners and losers, accepted behaviors

Value-Tales and their heroes?“Artifacts, rituals” are emergent objects? Zero in on the current state of the Culture Then, what North Star & tuning guidelines?

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History Of Culture Mgt (1)

• 100 years of “Human Behavior in Organizations” (HOBO) Research Findings add up to formal “Culture Management” today

• Taylorism peaked in 1910: it was one dimensional

• Henry Ford $5 per day (1/14) … total turnover econ’s

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History Of Culture Mgt. (2)

• 3m: 15% Rule (1925) • “Encourage experimental doodling”• “If you put fences around people you get sheep.

Give people the room they need”• William McKnight (59 years at 3M from ‘07-’66. • Dead-end divisions spun out in ’96 as Imation)

• Hawthorne light exp’ts (’24-’32)… Attention Inspires• Then Distractions: depression, WW2, ’46-’60 mfg

monopoly. VW bug invasion, etc. sparked new Q’s

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History Of Culture Mgt. (3)Grand Syntheses Models: ’60-on Highlights Doug McGregor: “Human Side of Enterprise”

(‘60; theory X v Y; and Bill Gore did it!) Blake-Mouton Management Grid (2D’s, X/Y in ’64) McKinsey 7-S Model: 6/80; “Structure is not Org.” My “kinetic chain” implementation checklist.. ’84 Geoffrey Moore’s Life-Cycle Assumption Mgt.: ‘90+ Template Pyramid of buzz words: ‘00’s Heskett’s “Culture Cycle”: 2012 (20+ years R&D) Quick overview to help “see” Culture

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Authoritarian X (v) Participative Y (1)Attitude:

– X: Don’t like work/avoid it– Y: Need to work. Enjoyable in right conditions

Direction– X: Force me to do right things– Y: I can self-manage if I believe in it

Responsibility– X: Don’t want it– Y: Prefer autonomy in right conditions

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Authoritarian X (v) Participative Y (2)

Motivation– X: Only fear and greed buttons– Y: Self-actualization; intrinsic joys of mastery;

design in “flow” (“flow” YT: 5:54-58)

Creativity– X: Only creative at getting around rules– Y: All creative in right conditions

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Blake Mouton Management Grid: 2D’s

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McKinsey 7-S’s: “Happy Atom” (6/80)

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7-S Comments• A one-size fits all “org. effectiveness” tool!?• All S’s aligned or change doesn’t happen• If one is vague/un-aligned, then all devolve.• “Stupid alliteration”, but Gupta ‘08 speech• “Hard is soft. Soft is hard”

• Hard S’s: Strategy, Structure, Systems (often weak)

• Soft S’s: Shared values, staff, skills, style… • …Are Soft S bedrock for Hard S’s?• But, which first? Tool for change champions? My

‘84 “kinetic chain” adaptation. 25

Linear, Change-Mgt. Checklist*

Sustainable Profit Power7. Incentives

6. Tools5. Education (=> Skills)

4. Great People (apt. & attitude)3. Systems (simple, flex., friendly: Ex 4)

2. Strategy/Culture 1. Leadership (People)/Mgt. (Science)

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Reweave the Kinetic Chain!

Article 2.1; Ex.16; and/or YT 8:7

Summary Slide: “Dealing With Darwin”(by Geoffrey Moore)

Update Our Mental-Models for Big Results 27

Re-Define for “Wally”!*

*google images. Search: “mission, vision, values,..”

Hard S’s Weak!

Soft S’s need, Strategic Relevance

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1. Happy Employees

2. Employee Retention

3. Improving Service

4. Happier Customers

5. Customer RetentionSystems, Praises

6. Growth and Profits

Pay

Hire

HPC

(F)

(D)

(C)

(B)

(E)

(A) Mastery

DIRTFT*

Job growth

Sales forcemotivation

Last look(+)

*DIRTFT = do it right the first time

Heskett Measures (A-E)

Now is the Time For Culture Mgt.!

All it costs is sweat equity No juice left in: “lean” in every aspect Employee engagement surveys plunging 90% of sales are on commodities

-- Differentiation through “supply-chain solutions”?

-- Service-value process teams achieving balanced metrics?

-- Best customers get semi-custom & flexibility Will “Wally”: get it; align and deliver? (engage)

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SUMMARY POINTS

Our Culture for: engagement, change, profits

Tune in to elements and science of Culture Mgt.

Become a corporate anthropologist

Models provide checklists for discussions

Ref: my YT clips; search YT for “corporate

culture” What are framework strands for reweaving your

culture web? (tomorrow)

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