Creating a high performance cultureA Siemens case study

Page 1: Introduction

Organisational culture and values

The culture of an organisation is the typical way of doing

things in the organisation. It particularly relates to behaviour patterns and relationships.

The culture of an organisation develops over time. It is created by the people that work

for the organisation its managers and workforce. What the organisation stands for (its

values) and the dreams that it seeks to turn into reality (its vision) are fundamental in

creating a dynamic culture.

A 'high performance culture' exists when everyone in the organisation shares the same

vision and where they trust and value each other's contribution.

This case study looks at how the Siemens organisation is built on a high performance

culture. This is shared by everyone from the most senior executive to the newest

trainee.

Background to Siemens

Siemens AG is a global electrical and electronics business with a turnover of nearly £60

billion. The company employs just under half a million people around the world. It is

based in Munich, Germany. In the UK, Siemens has its headquarters in Bracknell,

Berkshire and has around 100 sites across the UK employing 20,000 people.

Siemens'

products affect our lives in many ways. We can toast bread in a Siemens toaster

powered by electricity generated and distributed by Siemens. Traffic lights are made by

Siemens and people in hospitals have life-saving MRI scans using Siemens advanced

medical imaging technology.

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Page 2: Delivering the human resource development strategy

Human resource development is all about helping people to fulfil themselves at work. Development is concerned with encouraging employees to identify ways in which they want to improve their careers and other aspects of their working lives. For example, they may want to attend training courses, they may want to do more interesting work, or they may simply want to have a better work/life balance.

An organisation is nothing without its people. As an employer of one of the world's most efficient and motivated workforces, Siemens is committed to its employees. Its half a million employees work in a broad range of roles. These include:

information technology specialists mechanical and electrical engineers researchers new product developers managers and business executives administrators security guards and health and safety experts human resource specialists.

What is 'engagement'?If people are properly managed, they will motivate themselves to do a good job. Siemens believes in the full engagement of people in the workplace.  Excellent people need to be managed in an excellent way. Siemens believes that engagement combines commitment and organisational citizenship. Engagement is another way of saying actively involved.

Human resource development strategyAll organisations need to have a sense of direction which is put into action through a plan. This plan is referred to as a business strategy.A key pillar of the Siemens' strategy, alongside performance and portfolio, operational excellence and corporate responsibility, is the way it manages, develops and motivates its employees.

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Page 3: The importance of people in the organisation

The part of the Siemens' business strategy that relates to people management is referred to as People Excellence. At the heart of People Excellence is the building of a high performance culture. Nothing helps an individual more than to be given responsibility and to know they are trusted.

Almost without exception, people management theorists have shown that real motivation comes from within an individual. Individuals develop such motivation when

they feel that their efforts are valued and that they are doing something worthwhile. This is why People Excellence at Siemens is so important.Feeling part of a successful team is part of the engagement process. Individuals who feel valued want to contribute to the success of the organisation.For Siemens, people, like its technology and innovation, are a source of competitive advantage. To make the most of this advantage, Siemens makes sure that its employees work on developing the company's heritage of innovation.Siemens believes that there are many ways to make people feel valued and engaged. These range from a pat on the back, a personal letter or a special mention in a meeting, to a promotion or a higher salary.

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Page 4: Creating a high performance cultureSiemens' operations are based on a teamwork culture. This emphasis on the team is set out clearly in a quote from the global Chief Executive Officer of Siemens, Klaus Kleinfeld:'Many times in my life I have seen how one individual can make a big difference, particularly when working in a great team. The quality of our people and of our teams is our most valuable resource, particularly in today's changing world where knowledge flows round the globe with lightning speed and is easily available.'

Siemens wants all of its employees to be truly involved in the business and to feel part of its success. Employees therefore need to know how they fit into the business. With this in mind Siemens establishes clear expectations.

Team and individual targets

Targets for individuals are related to targets for the whole business. Everyone plays their part in achieving great results.Siemens states that 'our business success depends on the performance of each individual, our teams and the total organisation'.

A high performance team is one in which all members of the team work towards shared targets and have a sense of shared responsibility for the results the team achieves. As the team performance improves over time, the better the results.

People ExcellencePeople Excellence is the part of Siemens' global action plan concerned with human resource development. It consists of four main elements:

1. achieving a high performance culture2. increasing the global talent pool3. strengthening expert careers4. Siemens' Leadership Excellence Programme(SLE).

The high performance culture is the way of working at Siemens and it involves everyone. The global talent pool is made up of all Siemens' employees. Within Siemens everyone has the opportunity to develop their own specialisms and to acquire further expertise. The SLE provides the highest calibre leadership and management training.

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Talent management - managing people

People Excellence involves developing everybody that works for your organisation not just the high-fliers.

Siemens' talent management philosophy involves making sure that every employee is provided with the guidance and support to achieve their full potential. This aids them to do their best, every day. Everyone works together to achieve the organisation's objectives as well as meeting their own personal goals. Everyone shares the same vision and dreams. Within this culture they are able to progress and take on greater responsibility within the company. 

 

 

 

Talent ManagmentEveryone has talent. For Siemens, matching talent with tasks produces competitive advantage.Each individual at Siemens can make best use of their talents, whatever they may be. Talent Management enables both:

job enrichment, where individuals are encouraged to take on extra tasks and responsibilities within an existing job role to make work more rewarding and job enlargement, where the scope of the existing job is extended to give a broader

range of responsibility, plus extra knowledge and skills development.Talent Management is a global philosophy that is a key part of supporting each of the elements of the Siemens' business strategy. Talent Management enables Siemens' managers to engage and motivate employees throughout the organisation.

The benefits of talent managementBy applying talent management to all staff:

all customer-facing staff are engaged, so all customers benefit everyone has the opportunity and choices to achieve their full potential the pipeline of highfliers is sustained.

Performance management

Siemens has created a standard process for managing the performance and development of all employees. This is referred to as the Performance Management Process.The process creates a direct link between the strategy of the whole organisation and plans for each individual. Every individual is given targets based on their role and responsibility within the organisation. It is through meeting personal targets that the individual is best able to help the organisation to achieve its targets.Performance management is a systematic process that creates trust and open communication by:

setting objectives monitoring progress made creating an ongoing dialogue between each team member and his/her manager enabling forthright discussion.

Performance management in Siemens is the engine that drives Talent Management. It is the cornerstone of its high performance culture. When carried out in a consistent way, this system makes sure that everyone is told honestly about their performance.Employees are clear about the impact of their performance and what the consequences are for their development. Everyone within the organisation is pulling together to achieve the business strategy.

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Page 6: Conclusion

People really matter. Organisational results stem from high performance. People only perform well when they operate in a culture which nurtures and supports them and helps them to work towards the achievement of their ambitions.Siemens' high performance culture provides the framework and support in which high performance people can show their commitment to a high performance organisation.

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It is in human nature to resist change. "We resist change. We choose to keep our habits, rather the comfort of our habits" (Dr. Claude Brodeur PhD, http://members.tripod.com/zenol/humanism.html). Change and the phenomenon of it, is fundamental to evolution; and yet it implies some sort of resistance.

Resistance to change can take various forms and the task of filtering out the cause of resistance can often be difficult. Examples include change in work processes where the needs, expectations, and concerns of individuals are ignored.

 Change and resistance to it forms a knock-on-effect to both the construction and destruction of any organisation. Fear is one of the major forms of resistance to change and I shall discuss this in depth at a later stage. Alas resistance to change can be categorised to the organisational level and the individual level. It is these two separate levels which I shall discuss further exploring what steps may be taken to overcome resistance at both the organisational and individual level. 

The Organisational Barriers to Change

There are a number of barriers to change at the organisational level that, need to be addressed to allow change to be implemented with the least amount of resistance. These include:

Undefined Goals and Objectives An organisation should clarify continually the goals and objectives, outlining roles and specifying performance standards.

Financial and Environmental Lack of working capital in an organisation can prevent it from introducing change that is necessary to stay ahead of competitors or merely survive as a business. In these circumstances redundancies are almost inevitable. The lack of finance could be due to a variety of factors. These include: a fall in market demand, rise in competition or the degree of turbulence in the market place such as the September 11 th World Trade Disaster; which caused a significant effect on businesses and investment world wide.

Lack of Resources and Bad Resource Allocation Lack of resources is an onset of financial and/or environmental issues as discussed in the above paragraph. Bad resource allocation, occur when managers make bad decisions in allocating resources such as money, time, machinery and staff. Managers should use their imagination to avoid causing conflict situations.

Structural An organisation that follows the traditional hierarchical structure tends to resist change more than that which has a more flat structure. Communication between head of departments and employees in traditional hierarchical structures are usually poor which causes a rift between Management and Employees.

Insufficient Communication There are two branches of communication, which are communication internally, within the organisation between Employees and Management and externally between the organisation and suppliers and customers.

In organisations where management keep employees in the dark with respect to change potentially face fierce resistance. Employees may interpret this as a conspiracy against them inevitably leading to an unfriendly atmosphere to work in.

Organisations that fail to communicate with their Customers and Suppliers, changes that are in effect can face disastrous consequences. Example the Tiptree Company that had implemented a £1.5 million warehousing system to handle a larger number of books failed to notify, its customers that it had undergone a radical change without informing it’s customers. Unfortunate for Tiptree, which encountered problems with their new systems for about six months; had tarnished its 1992 British Book Awards Distributor of the Year. (Judy Collins, CRASH 28 th October 2000)

Lack of or Bad LeadershipStrong leadership is required in order to direct the change management process in any organisation. Bad leaders who merely provide are not doing enough to inspire the employees to march ahead. People want to be shown the way.

Lack of Preparation for New Roles Organisations may lack in their planning phase. Failing to prepare and define the new roles that will need to be satisfied when change is implemented; shall give rise to resistance.

Cultural Issues The culture of an organisation is a set of “unwritten rules”. Management may have a set of protocols for employees to adhere to perform business processes. The way a task is actually carried out depends namely on the culture. The culture of the organisation can strongly resist to change as employees become too familiar with the current way of doing things.

"Culture is the integrated pattern of human behaviour that includes thought, speech, action, and artefacts and depends on man's capacity for learning and transmitting knowledge to succeeding generations."(Webster's New Collegiate Dictionary)

 

Individuals Resisting ChangeThere are a number of barriers to change at the individual level that, need to be addressed to allow change to be implemented with the least amount of resistance. These include:

Fear News of change can invoke fear among employees. Employees may feel afraid of not being able to fulfil the new proposed changes to work practices that are being imposed. Employees may begin to question the future of their job, which shall cause much discomfort.

People resist change due to anxiety, pessimism and different personal ambitions.

Lack of Input into the changeIndividuals tend to resist change where they play not part in change. The idea of not knowing the change can cause a rift between the employees and management.

 

Overcoming Resistance at Organisational and Individual Level

Organisational Level Overcoming Undefined Goals and Objectives

Goals and Objectives should be frequently redefined and relayed to all employees. This shall aid towards clearing up any misunderstanding and possible conflicts.

Overcoming Financial and Environmental Issues Organisations should have a contingency fund to cater for changes in demand or develop a very good relationship with their bank manager in case you need to borrow money at hard times. At the other end of the scale if demand sores suppliers must be able to satisfy demand. Benchmarking suppliers shall help determine your best suppliers.

A good supplier may be one that allows you to have a 30 day or more credit account, which leave you with more working capital. Essentially corporate business strategies should have a degree of flexibility to act as a defence to sudden changes.

Overcoming Structural Problems and Insufficient Communication In a large organisation employees may wish to elect a spokes person who can act as a collective voice to air potential barriers directly to management. Surveys can be conducted and results analysed. In a small organisation employees should be encouraged to speak up if they feel that change is causing a conflict.

Overcoming Lack of or Bad LeadershipIt is a natural human instinct to follow leadership as children we look up to our parents and as adults we look up towards our superiors. Leaders must lead the way and be an

example for others to follow. In leading and setting an example to others leaders must take an active role a “hands on approach” side by side with the employees in order to motivate and encourage. As in the words of the great, Mahatma Gandhi; “ We must become the change we want to see”(Mahatma Gandhi, http://www.performance-first.co.uk/organisation/orgmain.htm).

“Visionary leaders, no matter how articulate, are not enough. A shared commitment still requires personal contact to make it real” (Handy, 95)

Overcoming Lack of Preparation for New Roles The importance of planning must be emphasised and reflected. The new roles should be concisely explained to the respective employees prior to implementing change, to stifle out any doubts, fears or resistance.

Overcoming Cultural Issues The cultural characteristics once identified need to be overcome and evolved into a non-blame culture. By doing so the employees shall have the freedom to evolve and try innovative ways of doing their jobs without the fear of being penalised for mistakes.

 Individual Level Employees should be directly involved in the change process, which shall motivate and reduce resistance. Extra incentives should be made available to further encourage and reward compliance. Support networks should be established as a means to reinforce the change theory. Appendix 1 Maslow's Hierarchy of Needs depicts the theory of psychological needs, values of authority, hierarchy and rationality, security needs.

The model consists of many levels. Maslow argues that once the basic level of Air food water and sex are met the next “hierarchical” or “rational” need is for safety. An organisation must concentrate on invoking a sense of “Belonging” to the organisation by keeping them informed, involved and sharing the success.

“Esteem by Others” should be achieved by promoting team work and the occasional appraisals by management.

Force Field AnalysisThe force field analysis helps identify the forces for change (drivers) and forces against change (resistance) in an organisation. Through analysis the author concludes that it important to note that even if you have more forces for change than against this may not actually guarantee you successful change. The key is to remove the barriers to change on the organisational and individual level.

 

Figure 1 Field Force Analysis

Twelve Principles for Managing Change

These principles provide the cause and effect of managing change strategically:

1. Thought processes and relationship dynamics are fundamental if change is to be successful.

2. Change only happens when each person makes a decision to implement the change.3. People fear change it "happens" to them.4. Given the freedom to do so, people will build quality into their work as a matter of

personal pride.5. Traditional organizational systems treat people like children and expect them to act like

adults.6. "Truth" is more important during periods of change and uncertainty than "good news."7. Trust is earned by those who demonstrate consistent behaviour and clearly defined

values.8. People who work are capable of doing much more than they are doing.9. The intrinsic rewards of a project are often more important than the material rewards and

recognition.10. A clearly defined vision of the end result enables all the people to define the most

efficient path for accomplishing the results.11. The more input people have into defining the changes that will affect their work, the

more they will take ownership for the results.

12. To change the individual, change the system.

Twelve Principles from Managing Change - Change Management Recourse Library (Internet Resource) http://www.lynco.com/12prin.html

Change Agent Change within an organisation can be achieved by a change agent (an outsider) someone who is not affected by the cultural drawback of the organisation. However there are pros and cons:

Pros:

Change Agent is unaffected by the organisation’s cultural drawbacks Employees might listen to someone who is an outsider simply because he or she is not

management.

Cons

On the other hand employees may reject the new comer as they are not familiar with that particular person. So they may become suspicious as to what his or hers real agenda is.

Closing Argument Organisations fail to recognise the great importance of their internal cultural situation. Some organisations tend to overlook the cultural issues altogether and concentrate on their technological aspect of change; confident that it will work because we are a successful. Example I mentioned Tiptree earlier who implemented a £1.5 million warehousing system did not realise that the staff were used to working a certain way and did not see any need to alter their ways.

 

“people had worked in a certain way and did not appreciate the need for a major cultural change” (Marilyn Johnson Tiptree’s Computer Manager) Source (Judy Collins, CRASH 28 th October 2000)

Appendix 2 Illustrates the Change Matrix that reinforces the authors closing argument (Sparrow & Marchinghton, 98).

Appendix 1

Maslow's Hierarchy of Needs

 

 

(Maslow, http://www.insightmc.com/insightmc_surveys2.htm)

 

Appendix 2

Change Management Matrix

How to Overcome Resistance to Change in an OrganizationIn business, the one thing you can be assured of is change. As the economy ebbs and flows, so must the strategies employed by business. If your organization experiences change it may also need to implement new business strategies, which can create resistance among employees. While every organization is different, there are some common best practices that can help to overcome resistance to new business strategies.Sponsored Link

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Step 1Create a way to communicate with employees about new initiatives and their progress. Instruct key management to provide employees with regular updates at team meetings.

Step 2Market the new business strategy to each group. Explain the new plan in terms (a common language) that help each group understand how the new strategy will make their own jobs better or easier. Everyone in the organization must understand the goal of the new business strategy.

Step 3Invite a team member from each functional group to participate in meetings or provide seminars for each group to market the strategy.

Step 4Select a group of change agents from key positions to help manage planning and implementation. Find one person from each group who is vocal. Try to select those in nonmanagement positions as well.

Step 5Develop key deliverables for each department, organization and person involved in the new business strategy. A deliverable is a final report or the output from implementing the new business strategy. Each group head must tailor the deliverable to the goals of the group. For example, one deliverable can be to increase sales by 5 percent. Another can be lower costs by 5 percent.

Step 6Tie successful implementation to compensation. Create at least four key milestones and goals to measure success throughout the year. Report on performance regularly and publicly reward those people or groups that meet goals.

Seventy-three percent of managers who responded to a recent survey feel that people in their organizations are not

flexible and adaptable when adjusting to organizational change. In a day when organizational change is more rapid

and constant than ever before, the fact that nearly ¾ of all employees are resistant to change poses a huge obstacle

to any organizational or team leader who must help their teams progress and adapt effectively to change.

The fact that the majority of employees may be resistant to change must way heavy on any team leader's mind who

is attempting to improve performance by implementing any type of change since resistance may greatly diminish the

leader's own ability to successfully implement change even if they are personally convinced that implementing the

change will increase productivity, reduce costs, improve competitiveness or overcome threats and obstacles. Gone

are the days of command and control organizations where a leader can implement change by decree. Without the

buy-in and enthusiastic support of the vast majority of the workforce, there will be huge obstacles that prevent

eventual success in implementing change. Perhaps this is the reason why studies show that success rates for

changes in Fortune 1000 companies are less than 50% and even could be as low as 20% (Harvard Business Review,

1998, p. 140).

The logical question to ask then is what can a leader do about it? Before a leader determines what to do, it would be

helpful to understand why the resistance exists in the first place. Our survey results offer important insights into why

employees resist change. Too often it is easy for managers to view their organizations as machines, which can be

tinkered with and improved upon with the expectation that when you are done, they will be able to turn it back on and

presto, it will go! Rather, modern organizations are more like living organisms, with interconnected systems that are

dependent on one another and affect one another. Living organisms do not lay back and react passively to outside

stimuli. When pricked they flinch; when threatened the either turn and run or turn and fight. Because organizations

are made up of people, it is to be expected that they react this way. But leaders often forget what our survey points

out; that people react with dysfunctional behavior in response to organizational change because their first

preoccupation is not what is best for the organization as a whole, but how any change will first affect them. One

survey responded called this the "what's in it for me factor." Many respondents of the survey characterized this initial

reaction to change as fear; fear of the unknown, fear of a loss of power, fear of losing friends and colleagues; fear of

losing a job; fear of not being able to perform a new role; fear of failure, etc. So, leaders should not be surprised if

individuals react negatively to change when they treat their organization as if it were a machine and not a living,

breathing, feeling organism, made up of individuals who will naturally be most concerned about how the change will

affect them personally.

Keeping this in mind, respondents to the survey offered many suggestions of how leaders can lead and influence

their teams more effectively during times of change. These ideas can be synthesized into a road map that should

prove helpful for leaders to consider when organizing and implementing change. The suggestions include:

1. Build an environment of trust with the employees in order to create a workplace where employees are more open

to ideas and more willing to discuss possibilities and problems associated with change. To do this, respondents

mentioned the need to be open to ideas, to listen, to provide a safe environment where people are free to express

their opinions without fear of retribution, etc.

2. Link the change effort to a common team value in order to help employees feel they can relate to the change effort

at a personal level. This increases the desire and motivation to change.

3. Articulate and communicate a clear message about why the change effort is needed and will help the team. Don't

rely on facts and figures alone to support the reasons for change. Facts and figures don't inspire and motivate people

to action. Linking to values and aspirations does. Respondents to the survey emphasized that this communication

cannot be seen as a one time event. Rather, it should be constant throughout the effort and it must reach out to all

members of the organization on as frequent and personable a level as possible. They also point out that this

communication must be honest and complete. One respondent mentioned that there is reluctance to without bad

news. However, more damage is done if bad news is discovered through the "grapevine" than if it is communicated

open and honestly by leaders.

4. Establish a vision with the employees regarding the possible advantages of making the change in order to help the

team define for themselves where the change will take them. Almost all respondents to the survey emphasized that

employees must see the benefits of the change. They must understand that the change will have positive impact on

them personally.

5. By far, the most common suggestion by survey respondents regarding how to improve the effectiveness of a

change effort related to involving team members in the change. A leader must collaborate with team members so that

employees are involved with and buy into the changes and not perceive the whole exercise as something that is

being done to them without their consent.

6. Establish and celebrate wins along the way. The leader should actively orchestrate wins and celebrations so

employees can see that the change effort is important and see that changes in behavior will lead to positive

outcomes.

7. The leader must manage performance around the change. This includes coaching those who need support with

the change, disciplining or removing those who continually resist the change or have decided to fight against it,

rewarding positive changes, hiring employees who have the new capabilities needed in the change effort, etc...

8. Constantly monitor the process and the results to ensure that the change effort is on track.

Magnify: "To make great or greater; to enlarge; to augment; to exalt." - Webster. James' vision is to magnify

individuals' natural abilities; maximizing their full potential and increasing their value as leaders and professionals in

the organizations where they work and serve. He is the founder of Magnify Leadership and Development, a training

consulting company with global experience in management/leadership and sales force effectiveness training; the

author of Magnify Change Leadership: A Practical Guide to Leading Teams in Times of Change; and a recognized

training consultant.

James holds a Masters of Science in Organizational and Management Leadership, a BA in Organizational

Communications, a minor in Spanish and a certificate of Language and Culture from the University of Salamanca

Spain. He has worked for dozens of organizations in over 40 countries on 5 continents.

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