Challenging change and culture

Why introducing new skills and behaviours to key individuals is the first step to cultural transformation

Foreword

It’s an often repeated ‘statistic’ that 70% of business change projects are unsuccessful. This is not true.

Nonetheless, the fact that this re-interpretation of a comment in a 1993 book has been so widely accepted, is evidence of how commonly change is perceived as being difficult, if not impossible.  When our people are not keen on change or feel that change is inevitably a bad thing then there is a strong bias in favour of believing any old statistic which justifies their disquiet.

While change projects may be more successful than most people would believe, that is not to say that they are easy. It’s no surprise that organisations turn to consultancies to help determine the change required and the best route to implementation. It’s easy to commit a small fortune to the consultancy which has the new technology platform which will revolutionise how your people sell. Or the one who has a fool-proof 6 step process to revolutionise your sales effort. Or the social selling solution for all serious sellers.

You get the picture.

Change cycles are speeding up.  While ‘evolution not revolution’ worked to describe steady incremental change in the past, technology changes, customer behaviour and reduced product life cycles means change initiatives often need to be quicker, more comprehensive and transformative than ever before.

But maybe there’s a way to equip your people to make the change you want to see. Maybe it starts from clarity about what it is that your clients need and the processes which best equip your people to meet those customer demands. Maybe having a clear understanding of what we mean when we say we wish to change our sales culture, helps us to really effect the culture in a profound way without ever saying ‘let’s change the culture’.

This paper argues that defining the skills required to meet customer needs can be a start point for implementing process change. By engaging with informed employees who are both required to work differently and are keen to do so, new processes can be designed with and for the people who will operate them.  Where cultural change is required to ensure that the new process is a success, the change in skills and behaviours starts the process of implementing cultural change.

It also argues that the top down, invented elsewhere approach to revising commercial processes may be making change more difficult than it needs to be.

Change

Disruption is a much over-used word. It is trendy - which means it can be used by anyone to mean just about anything.

However, like all clichés, its ubiquity is powered by truth.  Things have been disrupted.

Industries which didn’t exist a decade ago have colonised whole areas of the economy. Barely imagined routes to market have evolved from pie in the sky to passé within five years. Individual buyers with the money, authority and need have been replaced by stakeholder groups, committees and expanded decision-making.  Product life cycles are so short that owning a machine is so last year. Why own when you can rent, lease, outsource, pay-per-month, pay-per-use or even pay only for consumables. You get the idea.

From manufacturing to media; from publishing to professional services; from technology to transport; disruption has happened.  We are, quite definitely, not in Kansas anymore.

Smart companies anticipate and prepare themselves for the turbulence of change. They constantly and continuously review how things are done and where things can be more effective, more efficient or just better.  They want to retain reputation enhancing heritage without sacrificing innovation, flexibility and responsiveness.

It’s often the process that needs amendment. The sales funnel, the steps taken to move contact to suspect to prospect to customer is where increased responsiveness, rapidity, agility are most often shown to be lacking. The bureaucracy takes the blame. But the idea that introducing a new process will solve things, without questioning what is done and how, stands little examination.  Put simply, you can change the process steps as much as you like, but unless you change the behaviour of people working in that process, little shifts.

This is the point when organisations often talk about culture. The old culture is no longer suited to our new ways of working. There’s a demand for a new select as required; agile, flexible, entrepreneurial culture in place of the, delete as required; rule bound, reactive and inflexible culture which prevails. Changes in process often reveal current working practices to be lacking. Working practices are often described as the ‘way we do things round here’. The ‘way we do things around here’ has become shorthand for organisational culture.

Culture

Culture, like disruption, is commonly used but infrequently defined word. The ‘way we do things around here’ doesn’t really help organisations address cultural change. Edgar Schein in his seminal book Organisational Culture and Leadership, defined Culture on three levels, rather like an iceberg:

Artifacts

the tangible and visible outputs from a group or organisation – structures, organisational charts, processes, the way work is organised. 

Included in Schein’s definition of artifacts are those things which the organisation rewards and celebrates. In an organisation in which sales performance and achieving new revenues is recognised as a good in and of itself, success becomes equated with performance defined by numbers and bottom-line measures.  Doing well is increasing revenues and improving profitability. How these revenues are achieved is unimportant.

This is one area where artifacts can be confusing and difficult to interpret. Where achieving sales goals is all important, following procedures to do so may be considered a luxury – or even the preserve of new staff. Protocol is another word for things done by people who don’t know any better. If the mavericks who don’t play by the rules get rewarded, then theirs is the behaviour which is reinforced each time the sales awards are distributed.

Espoused values

these are what the organisation says about itself, specifically the public face.

The espoused values are also about what the senior team tells the rest of the organisation about standards of behaviour and the required attitudes to succeed. It is the official line on what it means to be an employee of the organisation.

When these values become more operational – such as  “we must solve problem X by embarking on activity Y” – these have little validity regardless of the seniority of the person making the announcement. It will be subject to tests – does it work, do we believe this is the right course of action, is it realistic? If it ever gains the validation of positive experience, then it becomes part of the third level.

Underlying assumptions

these are, in effect, the sum of individual and collective experience.  How does an organisation and its members routinely respond to a situation? 

These responses do not vary significantly within a social unit. In other words, to be part of a specific culture means that the responses of individuals, based on their collective experiences, will be similar if not identical.  Where a group responds differently to specific situations they can be reliably defined as having a different group culture.  Put at its simplest – the ‘way we do things around here’ is not the same as ‘the way they do things over there’.

It would be wrong, therefore, to consider culture as organisation-wide just because the annual report talks about ‘our company culture.’ In truth, there may be many different cultures or sub-cultures operating in one organisation.

Underlying assumptions are therefore the unseen, submerged body of the iceberg. It is the cultural level which is least apparent and most difficult to decipher. These underlying assumptions may not even be obvious to the individuals within a cultural group. When asked, they may say they always behave in a certain way (or, more likely, they do not admit to behaving in ways which are contrary to the organisation’s espoused values).

Shifting underlying assumptions often requires both new learning and unlearning. Individuals and teams used to a particular way of working may find unlearning particularly challenging.

Culture

Another definition of these underlying assumptions could be:

"The sum of dominant attitudes which impact behaviour and action."

It is worth unpacking this definition.

The sum of - acknowledges the cumulative nature of culture. Any study of culture, especially organisational culture, is primarily concerned with how individuals behave collectively and predictably within a set of norms.

Dominant refers to the idea of group norms and received wisdom. This speaks to the idea of people acting in line with the accepted ways of working. The idea of dominance also includes the concept of influence – who is influential in the immediate environment, and to what extent influence is exercised in line with desired corporate behaviours. Influence, of course, is not the preserve of seniority. Some team members can be incredibly influential – powerful role models for good or ill.

Attitudes - relates to how people think and the values they hold – even if these beliefs differ from the professed organisational values (espoused values in Schein’s model) or if these beliefs are contrary to good practice and company processes.  Schein refers to underlying assumptions as being based on experience of good practice. This suggests there is a specific rationality about these assumptions based on behaviours and actions which have worked in the past and somehow proven their worth. But attitudes, values and beliefs are not always (or even frequently) rational. Our beliefs and attitudes are frequently contrary to available evidence or subject to confirmation bias, where evidence is unconsciously filtered such that it accords with a previously held belief or viewpoint.

Impact behaviour and action - deals with relevance.

Beliefs, no matter how deeply held, which either do not influence behaviour or which people are prepared to ignore in favour of other considerations, are not apparent and may not be apparent even to the individual. Where attitudes differ from accepted good practice, but the individual is sufficiently aware of requirements to act in line with procedure - regardless of their personal opinion of its adequacy or lack thereof - there would be no obvious way of discovering this. 

However, the contrary may also be true. Individuals may believe that they always work in the interests of the organisation and its strategic vision, but when faced with a choice between doing what they perceive is right rather than what is in line with group norms or dominant attitudes; the ‘correct’ choice may well lose out.

Challenging assumptions at the heart of culture

When trying to change culture, we need to focus on shifting those underlying assumptions – questioning how things are done, how people respond in specific and predictable situations and proving that alternatives ways of doing things are effective and feasible.

Unfreezing

Essentially unlearning previous ways of doing things and having permission to do things differently. Underlying assumptions have been learned through patterns of work. What has worked in the past becomes ‘the way’ things are done.

On occasion, previous ways of doing things are not necessarily something that used to work. Instead, they are ‘received wisdom’ – the dangerous idea that something is so widely held to be ‘true’ ‘or ‘right’ or more dangerously still, the only way of doing something that it is no longer open to question.

Unfreezing also requires a freedom to explore, to experiment. In many sales organisations, this is a massive challenge, requiring senior teams to recognise that learning a new way of doing something may result in a (hopefully) temporary performance dip as new skills are mastered. Sales figures may go down!

Cognitive restructuring

Here we are talking about replacing old models with new ones, changing the way people think about the roles they fulfil and the ways in which they operate.

Adopting new approaches, learning new skills and, ultimately, changing our behaviour in isolation from the dominant assumptions which surround us can be difficult. Effectively, we need to go through these changes in our group, following widespread acceptance of the unfreezing process – i.e. having permission to try new things and to behave differently.

Refreezing

The final step in making any change is when the required behaviours and practices become business as usual. In the refreezing process, the person changing behaviour or trying new approaches requires a feedback loop. This not only gives them reassurance that they are on the right track, it enables them to choose between:

• Carrying on incrementally improving

• Abandoning these behaviours in favour of some yet to be defined alternatives, or

• Reverting to old behaviours.

Clearly, refreezing requires perseverance and embedding as business as usual. It is only when these behaviours are observably in place and delivering results, that the change process is complete.

Is the change required really cultural?

As mentioned, the idea of organisational culture is rarely well understood or clearly articulated. It’s not surprising, therefore, that organisations believe that culture change is necessary, when evidence to suggest what negative impact if any the current culture is having, may not be immediately obvious.  Where organisations have a poor grasp of what culture is, it may be easy to blame operational issues on the shadowy world of culture, while other performance issues are over-looked.

As Schein clearly describes, not all major change requires a focus on organisational culture:

“Before one even starts to think about culture, one needs to (1) have a clear definition of the operational problem or issue that started the change process and (2) formulate specific new behavioural goals. It is in this analysis that one may first encounter the need for some culture assessment in order to determine to what degree cultural elements are involved in the problem situation. This should not be undertaken, however, until some effort has been made to identify which changes are going to be made and which “new way of working” will fix the problem, and some assessment has been made of how difficult and anxiety- provoking the learning of the new way will be.”

Schein, E; Organizational Culture and Leadership, 3rd Edition, 2004; page 324

Once the operational problem or dissatisfaction has been clearly described, then the organisation has some questions to answer before addressing culture:

• What behaviour do we need individuals to demonstrate?

• How will that behaviour be supported?

• How difficult is the learning and unlearning required to enable people to adopt the new behaviours?

• What are the barriers, beyond lack of competence, which may cause people to reject the new behaviours?

The Change Equation

“The minute the learners accept the need to change they will also begin to experience learning anxiety.”

Schein, ibid, p350

Figure 1: The Change Equation. Kathe Dannemiller after David Gleicher.

The Change Equation, or Change Formula, was developed by Kathe Dannemiller in the late 20th century.

Essentially, the ‘Change Equation’ recognises that there will be resistance to new ideas and change and seeks to identify what organisations and teams need to do to overcome this resistance.

The first thing to notice is that the formula is defined by a multiplication symbol.  The importance of this is that anything multiplied by zero. In other words, there must be a positive value in each of Dissatisfaction, vision and first steps in order that the total can be greater than resistance to cost.

Dissatisfaction is the reason for the change.  It explains to people within the organisation why the change is desirable and why now.

We know people live with problems. As well as a level of dissatisfaction, a vision for how things could be once the change has been implemented is important in making the change compelling or desirable.

Finally first steps need to be very specific and clear.  However, describing in minute detail all the changes over many months to come, will be demotivating.  It will also create an opportunity for individuals to spot some minor element of the plan about which they are unhappy or which they misunderstand.  This disconnect enables them to build their learning anxiety and – where the future planned activity requires a shift in underlying assumptions – reject the plan on the basis that it does not accord with ‘how we do things around here’.

The Resistance or Cost is simple to quantify if it is expressed in purely financial terms.  A Financial Director can look at the cost of implementing the change, compare it with likely future revenues or cost savings and make a judgement that the change process is either good value or not.  However, the cost to individuals may be more difficult to quantify.  Costs (and therefore resistance) may focus on learning anxiety – how difficult will this learning process be?  How much discomfort will the individual likely experience as they master new skills and different processes? What allowance has made for performance ‘dips’ as individuals try new things and develop capability through a process of trial and error?

Inevitably, there are some resistance factors which are common to anyone adopting new behaviours and ways of working. These are fears about the unknown and commonly include:

• Fear of failure. While learning something new, individuals inevitably go through some discomfort or temporary incompetence – they feel less able than they were when working in the ‘old’ way. Like mastering a new exercise regime or changing diet, working through lower levels of performance takes perseverance.

• Fear of punishment for failure. In sales environments in which sellers earn commission or bonuses for productivity/profitability, then there may be a real, personal cost to the individual for any dip in performance. Bonuses and commissions are quickly perceived to be part of normal remuneration and therefore any reduction is perceived as punishment.
  If sales leaders or line managers are not wholly on board their behaviour may be perceived as punishment by those wrestling with adopting new behaviours.
• Fear of loss of group membership. If an individual identifies closely with their team – organisations often build group loyalty purposefully – then doing something different from one’s colleagues may feel especially uncomfortable. Where individual sellers have been trained in new approaches but return to a team which is still relying on traditional sales activities, then the individual can feel rejected or even ostracised. Maintaining one’s status as a group member can be incompatible with accepting change or implementing new ways of working.

Learning and the performance dip

Any significant change in how people need to perform their role, often leads to an uncomfortable implementation phase.

The anticipation is that learning – and attendant capability – will proceed on a smooth upward trajectory.

In this chart we can see that those involved in learning build their skills even before the intervention having been told that change is on the horizon and develop new skills at an exponential rate during the training session.

The process of new skill development levels off once back in the workplace and as these skills are implemented, results improve.

In fact, the capability development over time most often looks like this.

In this version, new skills may continue on their upward path immediately after the learning intervention – when participant enthusiasm is high.

However, as we all know from when we have learned something new, when we are in the Conscious Competence phase, we need to be more deliberate about everything we do, which slows us down.

Results may improve, but often the time lag between trying new things and gaining spectacular improvement in capability and performance is longer than anticipated. 

As this continues, individuals become disheartened and the three fears described by Schein emerge.

Often, the disheartened learner returns to doing things the way they always have done, retreating back into their comfort zone. Sometimes, though, having learned that the old way was inappropriate for the new environment and the new way is slow to deliver results, individuals – especially those who are enthusiastic about the change and have a good performance record – find themselves unsure about what to do. Persevere with the new approach which seems not to work or return to the old approach which is no longer perceived to be a good way of doing things?  

An effective process needs an allowance for trial and error learning alongside positive encouragement, role modelling and interventions from senior staff.

The eight steps that make it ok to learn

So far, this paper has assumed that significant change in an organisation’s sales or commercial processes will require a series of learning interventions. Certainly, the idea of a change happening which requires people to do things differently and do different things will require some prompt to trigger the desirable change – even if simply to ask people to start doing one thing and stop doing the other.

There is no presumption that that training requires days in a classroom, or formal qualifications or even access to online learning modules.  It may be sufficient to equip regional and area managers with the skills  and resources to build new capabilities among the team.

Whatever approach is preferred it will require a strategy – a clear plan which defines the end point and the steps required to achieve the goal. It will also require a clear communication process and a senior champion who is not only driving the approach through the organisation but is accountable for the strategy’s implementation.

It is important to position any learning required as fixing a specific problem or potential problem or readying the organisation to take advantage of a specific opportunity.  Training can never be positioned as part of a culture change programme for the very simple reason that until the learning has been conducted, responses monitored and implementation managed, the requirement for ‘culture change’ is an unknown.

Schein explains that the learning process for those impacted by the change requires Psychological Safety – in part to tackle the three fears outlined on page 9. He identifies 8 steps which make it OK to learn in an environment which is safe and provides the best opportunity for the learning to have sustainable impact:

• A compelling positive vision: as outlined in the Change Equation mentioned previously.

• Formal training: having defined the required skills it is vital to undertake formal training for those affected as early as possible in the change project. This formal process involves: Know why, why are we doing this and why now? Know what, what does good look like, how will I know I have been successful? Know how – what I need to do differently broken down into stages so I can achieve mastery by  practising the key steps.

• Learner involvement: this requires opportunities for individuals to manage their own approach to practice and embedding the required skills. Informal learning requires a feedback loop, recognising individual progress and identifying options for future continuous development.

• Learning for in groups: because we know that individuals are embedded in groups and are – to a greater or lesser extent – subject to group norms and assumptions, it is vital to learn as a group and spread the learning to those on the periphery of the group. In a sales environment, this may include: sales support, sales management, marketing and product specialists.

• Practice opportunities, feedback and enablers: as well as implementing new skills in the workplace, individual sales meetings may be perceived to have too much riding on them for individuals to ‘practice’ skills they have yet to master. To give confidence to try new things, enablers (mentors, coaches, facilitators, managers, assessors) need to provide time for practice and may also manage practice activities including role play meetings, call reviews and team planning sessions.

• Positive role models: Human beings have always learned through imitation. Where new skills are radically different, it may be necessary to see ‘what good looks like’ before they can imagine themselves adopting new behaviours. Ideally these individuals are people who, to a large extent, are ‘just like them’.

• Support groups: as we have seen new skills and the learning required to master them, is not a predictable, linear process. What can be predicted is that some challenges will emerge and participants will need some kind of forum in which they can share challenges, seek solutions and also provide mutual encouragement.

• A reward system: what gets measured gets done. We know this and so the behaviours we want to encourage need to be recognised, acknowledged and rewarded, where appropriate. This extends to the desired and admirable learning behaviours – building learner confidence that they are on the right track even when there are few visible beneficial outcomes from the change process.

Transformative change

“The change goals should initially be focused on the concrete problems to be fixed; only when those goals are clear is it appropriate to do a culture assessment to determine how the culture may aid or hinder the change process.”

Edgar Schein, Ibid, Pg 357

If there is even a hint of cultural change being required, it is obvious that the change being considered requires new ways of working which could be considered transformative.

Transformative change is usually mandated from the top.  However laudable the aims of any change thus decreed by the board, significant amounts of work have to happen lower down the hierarchy to make transformation happen. Often, by the time the senior strategists have consulted those who will need to change most to deliver the required transformation, Chinese whispers have played their part and those whose support is fundamental to success are implacably opposed to the imposition of new ways of working.

Furthermore, the hierarchy itself may be subject to the transformation planned. In its 2017 Human Capital Trends Survey report, Deloitte recognised that networks of teams are replacing traditional hierarchies in major companies and that they are seen as an increasingly effective route to increasing productivity.  Alloyed to individual accountability, the power of the hierarchy and the command and control from the C-suite is increasingly a relic of a bygone era.  Faster decision making, increased autonomy at lower levels in organisations who will bring in external expertise as required (external to the team and external to the organisation) are no longer the preserves of tech geeks in t-shirts and cargo pants.  It is business as usual even in more straight-laced organisations.

Recognising this reality, organisations are increasingly looking to build change from the bottom up – utilise the creativity, insight and knowledge of their own people to inform change.  However, asking people how they want things to be is impossible in a vacuum.  Starting with a blank sheet of paper often gets even blanker looks in return.

This is where skills led transformation comes in.

In this approach, once a problem or opportunity has been identified which cannot be addressed within the context of the existing ways of working, then the organisation needs to identify the skills their people will require to resolve the problems and/or exploit the opportunities.

By training first – i.e. building capability – those who have developed new skills and behaviours can then play an informed role in the change process. Identified change agents/change champions can make informed contributions to process redesign where required.

Practical application of the new behaviours and skills helps individuals to identify those features of organisational culture which drive the required behaviours and those which act as barriers.  A process of promoting the drivers and removing the barriers, with the buy in of those who are implementing the early stages of the change, is more likely to be successful than attempting to impose process and culture change from above or – even worse – from outside.

One enormous benefit of this process, is that those committed to the change they have experienced, can start to change the workplace culture on their own.  The underlying assumptions change as the new behaviours deliver results. The managers engaged in supporting and embedding the change begin to espouse values about enabling capability development and utilising the new behaviours universally and consistently.  The artifacts begin to reflect the change, rewarding those involved, recognising success, building new narratives and telling new stories to clients and the market.

The process of involving all those impacted by the change in a learning process as a pre-cursor to process change and cultural assessment, is rarely an option.  In some organisations, the sales force may number in the tens of thousands. There is a daunting logistical challenge in delivering a programme on such a scale – especially if the learning intervention is designed to engage people in behavioural change, which will take time.

This skills-led transformation, therefore, most usually works when a pilot group, representative of those required to implement change, are engaged in the initial skills acquisition.  As multiple commentators on cultural change have advised, recruiting a guiding coalition (Kotter, 1995V) or a leading coalition (Boonstra, 2013vi) informs the change process and models the desired behaviours.  Those observing these role models identify with the people applying the new behaviours (they are just like them). This both reduces learning anxiety and removes some of the more fanciful rumours about the direction of travel and the downsides of the changes.  A powerful coalition recruited from amongst those most affected by and responsible for implementing change, is a powerful asset to any transformation process.

We can summarise how skills led transformation delivers value:

• Start small so that lessons can be learned and new needs, drivers and barriers are identified early

• Create an informed group of change agents and use them to determine the scale and sequence of change required

• Build role models who assist in sanity checking how new skills will address problems and respond to opportunities

• Use the role models to drive further development and roll out

• Build new stories and narratives to prepare the ground for new behaviours and to enlist the creativity of wider networks.