Culture Change For Changing Times Family Firm Institute

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Family Firms

Facing Changing Times?Time to Think About Culture

Andrea J. Simon PhDSimon Associates Management Consultants

© 2012

Pre-work• If you are planning on attending this session you might want

to take the OCAI-Online at www.ocai-online.com to see what it is actually like. Bring along your graphs so we can discuss what they mean.

• If you cannot or do not wish to take it ahead of time, please come and let us introduce you to the culture change process associated with the Organizational Culture Assessment Instrument (OCAI) and why it might help your company or organization, or your clients who are dealing with change.

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http://www.ocai-online.com/

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What Could 1,000s of Companies Teach Family Firms?

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Our Talk Today • Competing Values: Active Learning • Culture Change• What to do? Assess and Diagnose• Discuss tools for changing culture:

ChangeMap™ Process

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Change any Corporate Culture? • Business has stalled.• Times have changed.• Talent is ill-suited for the business.• When products and services are no longer relevant

to the customer.• When growth comes in new markets.

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For Family Firms?

• Succession• Mismatch between family and jobs skills

needed• Culture of the firm keeps talent in wrong jobs• Demands of the market challenging the vision

of the family

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A Short Story: Auction Business

• Largest Auction Business in Mid-West

• Founded by Grandfather• Three generations and 40

relatives of the family, 29 of whom are licensed real estate brokers

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Very Successful Auctioneers

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http://www.kikocommercial.com/

http://www.kikorealestate.com/

http://www.kikoonline.com/

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Cultural Challenge

• “The company is also guided by family principles and integrity, something none of them take lightly.

• “When you hire us, you hire our family, and we all have to live up to the long-term integrity of the family name.”

• “It’s not taboo to have business that consists of a lot of relatives.”

• “We embrace the strength of families.”

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Why Change the Family Culture?

• Son was brought back into the company.• What he brought back was a different way to

“see, feel and think” about the business.• Times were changing, but the family running

the company was still more focused on family than on who had what skills to do what kinds of jobs.

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BUT WHY SHOULD WE WORRY ABOUT OUR COMPANY’S CULTURE?

Culture=Human

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"It is a bad plan that admits of no modification.“ — Publilius Syrus(First Century BC)

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Culture: Makes us Human

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• Extraordinary Brains• Stand and Walk on Two Legs• Feel things and can Express or

Share them• Symbols and Beliefs• Language(s)• These help us Live in Groups

with shared behaviors and ways of getting things done.

We call all of these our “CULTURE.”

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So Many Different Realities• We sort reality to conform to our mind-map.• Perception is developed early.• Perception = Reality• To change is challenging

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What you Believe is What you See

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So Many Types of Cultures

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Which one is Right for Me?

• For Businesses, in General• For Family Firms, in Particular

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Research is Compelling• Organizational change initiatives in last 30 years were:

TQM, Down-sizing, Reengineering, and Lean/Six-Sigma.• Did they work?• But, in a survey of Fortune 500 companies:

– Only 20% reported having achieved quality objectives– Over 40% indicated that they were a complete flop

• Most successful were those where it was embedded in a culture change process.

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What does Culture Do?• Highly successful firms have congruent cultures that:

– Reduce uncertainties– Create a social order so people know what to expect– Create continuity and key values and norms– Create a collective identity and commitment– Express a vision of the future and energizes forward

movement

• But the wrong culture can take you down the wrong road.

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Change, but to what?

• Is mine fine?• Shall I adapt it to new times?• How do you change deeply embedded beliefs

and values? Much less change behavior?• We don’t “do” culture. We live our culture.

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WHAT TYPE OF CULTURE ANYWAY?Can a Game Help?

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The most successful businessman is the man who holds onto the old just as long as it is good, and grabs the new just as soon as it is better."— Robert P. Vanderpoel

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Let’s Play a Game

• Card Games are fun• Using the Competing Values Framework card

game we are going to help you see, feel and think about culture with active learning.

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Competing Values Framework

• Simple exercise to understand what the four dominant types of cultures really mean.

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Inte

rnal

Foc

us a

nd In

tegr

ation

Flexibility and Discretion

External Focus and Diff

erentiati

on

CLAN

Orientation: Collaborative Leader Type: Facilitator,

Mentor, Team Builder Value Drivers: Commitment,

Communication, Development Theory of Effectiveness:

Human Development and participation produce effectiveness

ADHOCRACY

Orientation: Creative Leader type: Innovator,

Entrepreneur, Visionary Value Drivers: Innovative outputs,

Transformation, Agility Theory of effectiveness:

Innovativeness, vision, and new resources produce effectiveness

HIERARCHY

Orientation: Controlling Leader Type: Coordinator

Monitor, Organizer Value Drivers: Efficiency,

Timeliness, Consistency and Uniformity

Theory of Effectiveness: Control and Efficiency with capable processes produce effectiveness

MARKET

Orientation: Competing Leader Type: Hard Driver,

Competitor, Producer Value Driver: Market Share, Goal

Achievement, Profitability Theory of Effectiveness:

Aggressively competing and customer focus produce effectiveness

Stability and Control

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ASSESSING A FAMILY FIRM’S CULTURE

What to do?

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The Process• Let me offer you an overview of the process

we use:– Assess: OCAI– Diagnose: Picture– Envision: Picture the Future– ChangeMap™ : Map the Path

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Assess: OCAI• Organizational Culture Assessment Instrument

(OCAI) is easily taken in an online version (www.ocai-online.com)

• Highly validated and reliable.• Over 60,000 people have taken it representing

thousands of companies.• Developed and validated at the University of

Michigan.

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OCAI• OCAI helps you assess your organization around six

questions that focus on the core elements of a corporate culture:• Dominant Characteristics• Dominant Leadership Style• Management of Employees• Organizational Glue• Strategic Emphasis• Criteria of Success

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Inte

rnal

Foc

us a

nd In

tegr

ation

Flexibility and Discretion

External Focus and Diff

erentiati

on

CLAN

Orientation: Collaborative Leader Type: Facilitator,

Mentor, Team Builder Value Drivers: Commitment,

Communication, Development Theory of Effectiveness:

Human Development and participation produce effectiveness

ADHOCRACY

Orientation: Creative Leader type: Innovator,

Entrepreneur, Visionary Value Drivers: Innovative outputs,

Transformation, Agility Theory of effectiveness:

Innovativeness, vision, and new resources produce effectiveness

HIERARCHY

Orientation: Controlling Leader Type: Coordinator

Monitor, Organizer Value Drivers: Efficiency,

Timeliness, Consistency and Uniformity

Theory of Effectiveness: Control and Efficiency with capable processes produce effectiveness

MARKET

Orientation: Competing Leader Type: Hard Driver,

Competitor, Producer Value Driver: Market Share, Goal

Achievement, Profitability Theory of Effectiveness:

Aggressively competing and customer focus produce effectiveness

Stability and Control

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Two Questions

• Then OCAI first asks how you feel about your organization today.

• Then it asks “how you would prefer your culture to be in the future?”

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This is a sample of the questions

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1 Now 2 Preferred Dominant Characteristics

A The organization is a very personal place. It is like an extended family. People seem to share a lot of themselves.

B The organization is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take risks.

C The organization is very result oriented. A major concern is with getting the job done. People are very competitive and achievement oriented.

D The organization is a very controlled and structured place. Formal procedures generally govern what people do.

Total 100 100

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Diagnose: The Picture Emerges

• Tells a story. • Helps you understand how

you actually “see, feel and think” about your company and how you “do” your job.

• Helps you have a “visual awakening.”

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Organizational Culture Assessment Instrument (OCAI)What do you see?

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Or maybe like this? Very Competitive

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Or a really strong Clan fan?

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SEE WHAT THE GRAPHS CAN SHOWLet me tell you some stories

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“Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up “– James Belasco and Ralph Stayer, Flight of the Buffalo (1994)

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Family Firm: Construction Business• Small construction firm in Florida that was thriving

despite the massive decline in construction.• Six of the nine people working were family—

husband, brother, wives, children.• They had survived the recession and were doing well

because they were “family.” • But…

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There were a lot of issues• Systems: were put into place but not really adhered

to.• One member just didn’t deliver the results—but he

was “family.”• We were known for our cleanliness and tidiness but

not for our innovation or speedy solutions.• How could we shift our focus for better results?

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What did his OCAI look like?

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His industry wants to go where he is

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ABC ASSOCIATESHow about a Transportation Engineering Firm

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“If you do not change direction, you may end up where you are heading” – Lao Tzu

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Another Case

• Transportation Engineering Firm• $25 million annual revenues• Stalled• Succession issues• Serious loss of 3 Proposals• What to do?

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Cultural Tensions and Personal Friction

• “How can we improve our internal communications?”

• “How can we work together –but better?”• Why isn’t work getting done?• Can’t our different offices work better with each

other?

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Lot’s of cultural explanations• If I know it, then everyone must know it, so why

isn’t it happening…?• Maybe it is our message and not the method? • How come the underground works so much

faster than the formal communication channels?

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Tried a lot of things• More order and structure (more Red)

– More formal structures; more rules– Change the style/frequency of our meetings– Adjust memos/emails/messaging– Adapt our tools from phone calls/texting – Add new virtual methods—WebEx and Skype– Fire people, hire people, Help!

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Others wanted more collaboration

• We are “lean and mean” so let’s not get burdened with formal rules, policies or meetings—who needs all that structure?

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Started a Process

• Culture Probes• Observational Research• OCAI

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Their Organizational Culture Assessment Instrument (OCAI)

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What they found in OCAI diagnosis• Lack of congruence came out in the graphics• Everyone had a different perception of how they

were today and how they preferred to be in the future.

• And, leadership wanted a singular way of doing things different from the rest

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Went to work on their culture• How do we get aligned?• What will we do:

– More of and Less of– Start and Stop– Hold secure– When do we start

• Metrics Matter: How will we know if it is working?

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YOU WOULD LIKE TO CHANGE? HOW?

Your company has your OCAI —now what?

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People don’t resist change. They resist being changed! – Peter Senge

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How do you change a culture?• We have a sense of where we are going• How do we get there? Where do we begin?• You want to become more innovative and

collaborative. • Or more systematic and controlling? • What does each mean?

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Envision the Future “You”• Story Telling• Describe your organization

today in story form.• What events reflect the way

you value or believe in things today?

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Tell us about you in a future story?• Tell us the story as you want it

to take place in the future:– “I would have wanted more

people to be involved in the solution of the problem.”

– “We had a team innovate to come up with the ideas.”

– “No one had to ask permission.”– “We are much more focused on

results.”

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With stories as destinations

• How do we change?• Share with you exercises that help the mind

create new vision for the future company culture.– “More of and Less of”– “Start, Stop, Secure”

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What will you do More of/Less of?

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Clan: Collaborative Adhocracy: Creative

Hierarchy: Controlling Market: Competitive

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“More of Less of”-- Means/doesn’t MeanClan Culture increase means: More employee empowerment More participation and involvement More cross-functional teamwork More horizontal communication

Adhocracy Culture increase means: More employee suggestions More process innovativeness More thoughtful risk taking Tolerance of first-time mistakes More listening to customers

Hierarchy Culture decrease means: Fewer sign-offs for decisions More decentralized decisions Fewer roadblocks and less red tape Less micro-management Trying out more crazy ideas Eliminating paperwork

Market Culture decrease means: Ongoing commitment to excellence A world-class organization Goal accomplishment Energized employees Less myopic thinking about targets A less punishing environment

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Once you have it started, what next?

• Culture Change is much like any new business venture.• You need a vision: what will it look like.• A strategy: How will we get there?• A plan in steps: Concrete things you will do to become a

different type of organization.• And a map: ChangeMap™.

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Color code your plan• Is it more employee

engagement and empowerment? More “yellow”

• Or more “red” with better controls and structure?

• Should they be more “blue” for results

• Or do you need more innovation—”green”

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CLAN ADHOCRACY

HIERARCHY MARKET

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FINAL THOUGHTSChange is here to stay

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“Never doubt that a small group of thoughtful, committed citizens can change the world.”— Margaret Mead

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What Did Kikos Actual Do?• Began a process with great pain to transform the

auction company into one that could thrive for the next generation.

• Board Changes• Formed a new Holding Company• Process Changes• Human Resource Changes • Culture Change

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We are our Culture• It is what we value and believe.• What we think is true and real.• It is how we get our jobs done and live in our

companies. • Both for family firms and for large corporations.• Businesses thrive or die on how they do things, not

just what they do.

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What is right for when?

• Is today’s culture right for the new environment you are operating in?

• Should we change it? To be more Innovative or Results-Oriented; more Collaborative or more Regulated?

• How do we begin? And keep it going?

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Closing Thought• There is nothing more

difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things."— Niccolo MachiavelliThe Prince (1532)

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For more information please reach us at [email protected] J. Simon PhDSimon Associates Management Consultants1905 Hunter Brook RoadYorktown Heights, NY 10598 USACell 914-261-1631Office [email protected]: andrea.j.simonFor the OCAI-Online we refer you to www.ocai-online.com

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mailto:[email protected]

mailto:[email protected]

http://www.ocai-online.com/

Culture Change For Changing Times Family Firm Institute

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