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Corporate culture: making the inner autopilot competitive

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Cooperation or medium-sized company: how established companies develop their proven culture and values, without giving up their identity. And thus strengthen their competitiveness.

A few days ago, I happened to discover a ten-year-old picture of the Deutsche Telekom Board of Management in an office: The picture shows only men, everyone wearing a suit and tie. In the meantime, the Board of Management has become more diverse - two board members are women - and the clothing style has also become more casual.

When I recently showed Deutsche Telekom's headquarters to an external guest, he was positively surprised that the majority of employees work in open, communicative and modern office environments. In fact, it wasn't long ago that long corridors with individual offices lined up side by side were the rule.

As a consultant at the Center for Strategic Projects (CSP), my everyday life is characterized by meetings and workshops with top management representatives. I increasingly use alternative formats and methods: frontal presentations with PowerPoint and beamers give way to interactive exchange formats, flipcharts, post-it's etc. And the range of topics is also broadening: instead of discussing numbers, data and facts only, managers are increasingly also reflecting on "soft" topics such as collaboration or improving cooperation. I think to myself from these supposedly inconspicuous observations: yes, the cultural change at Telekom is tangible.

Culture equals esotericism?

A company's culture, sometimes even dismissed as "esotericism," is often still an underestimated and unused, but significant competitive factor. Why significant? Because a company's culture is unique. An asset that can set a company apart from its competitors - because it cannot be copied easily and at short notice. A well-formulated, but above all lived corporate culture is virtually indispensable - after all, it determines the behavior of employees in the long term. In addition, it has a decisive influence on the attractiveness of a company for talents with relevant, rare skills. For established companies in particular, it is therefore essential to constantly strike a balance between the need to constantly question the tried and tested culture and to develop it in line with the times without, however, giving up one's own identity. 

Compass on a newspaper

Culture: an invisible but effective compass with a significant impact on employees in organizations

Effective Compass: Culture

In other words, corporate culture is like an omnipresent, enduring autopilot. It is an invisible but effective compass with a significant impact on how people think in organizations, how they act, how they tackle challenges or solve conflicts. This autopilot is based on common, fundamental assumptions and values. It is helpful to understand the (corporate) culture of the US social scientist Edgar Schein, who developed the well-known iceberg model. He distinguishes between three levels of culture: The basis is the lowest level - not visible as on an iceberg – in particular the "pattern of common premises that the group has developed or learned in coping with its problems [...] and is thus regarded as binding; and that is therefore passed on to new members as a rationally and emotionally correct approach to dealing with these problems". The second level are the shared values based on the basic premises. These can often be found in official company guidelines, Guiding Principles, Code of Conduct, etc. The third level, the visible tip of the iceberg, are the artifacts of a company. These include, for example, employee behavior, language, products, brand and logo. To put it simply, culture can be summed up in a catchy phrase: HOW we do things around here and WHY we do things the way we do..

Old strategies for new challenges

In my daily work, I experience again and again that the culture of traditional large companies often revolves around values and basic premises such as security, risk avoidance, authority, hierarchy, reliability and result orientation. With direct effects on everyday working life - often characterized by rigid structures, bureaucracy, standardized processes, a high degree of division of labour, low fault tolerance and long-term, and thus short-term inflexible planning. The consequence of such a programmed autopilot: Companies face new challenges - such as changing market conditions, new competitors, some of them from other industries, shorter product and technology life cycles, growing customer requirements – often with old solution strategies. To put it exaggeratedly, this means:

  • to decide top-down instead of relying on participation and trust
  • to steer using control and micro-management instead of strengthening the personal responsibility of the colleagues in the team
  • to throw classic requirements documents "over the fence" to other areas instead of prioritizing task packages together in cross-functional teams
  • to organize the work on rigid, conventional RACI matrices instead of relying on interaction and collaboration
  • to blame oneself for potential failures instead of looking for constructive solutions together.

Incorrectly programmed autopilot

In a nutshell: established companies in particular are increasingly experiencing that their old autopilot is no longer contributing to competitiveness. It can rather paralyze the ability to make decisions and adapt oneself, instead of accelerating the time from the product idea to product development and market launch. This is not a viable fundament in an increasingly complex world whose challenges can no longer be solved with conventional solution strategies and methods. In the worst-case scenario, the latter suppress the creativity and sense of responsibility of the employees, as they try to avoid mistakes and protect themselves instead of acting and assuming responsibility.

Culture and business success

Current results of a Harvard University research group on corporate culture show that a company's culture has a relevant influence on its success. In order to contribute to business success, corporate culture must contribute to corporate strategy and competitive conditions.  For example, in a market environment characterized by pressure to innovate and volatility, a company whose culture is based on values such as security and authority will find it difficult to succeed. In such contexts, learning orientation, creativity and a willingness to take risks are the key to success. Therefor the researchers recommend a targeted further development of the corporate culture and values in order to bring them into line with the strategy and business requirements.  

When agility becomes a trap

However, this can also become a trap. When? If companies propagate contemporary, agile cooperation models (e.g. Scrum) and the associated values such as collaboration, trust, empowerment and esteem on the one hand, but employees experience on the other hand that the management itself does not adhere to them and, for example, adheres to a directive management style. I myself have experienced this. The management of a larger area where employee participation and self-organization have long been regarded as important values, suddenly changed various titles of functions without employee participation. This was a sensitive issue, as the employees strongly identified themselves with their titles. This behaviour caused a lot of irritation among the employees that the management finally gave in and found a solution that was viable for everyone. Such a discrepancy - if it is not resolved as in the example - promotes cynicism and insecurity among the employees, who sometimes ask themselves in such a constellation: How should I behave?

From word to action

The solution: the unity of word and action - in other words: Walk the Talk. Think big on the one hand, but on the other implement these thoughts consistently in your daily work. In my opinion, the mere reformulation and communication of new values is not enough to reprogram the inner autopilot in a company. This is no way to go beyond cosmetic changes. We therefore recommend a sustainable, business-oriented further development of basic cultural values and their consistent implementation in the organization. If the management decides to adapt the corporate values and culture, this means:

  • To set up a cultural program with the aim of bringing the values and culture in line with the respective business model, strategy, market and competitive conditions. 
  • Establish consistency of values and actions. For companies thinking about an agile transformation, this means: Not only the mechanical introduction of working methods like Scrum or Kanban is in the focus of such a change, but the company-wide implementation and promotion of an agile mindset - in particular courage, openness, personal responsibility, trust, learning, focusing and appreciation.
  • Involving employees from the outset in the further development of corporate values in order to promote their acceptance of and identification with the new values.
  • Do not lose patience: Such a change, no matter how urgent it may be, cannot be implemented overnight.

Cultural development - step by step

Implementing a sustainable cultural program effectively usually takes up to 24 months. It can be divided into 6 phases in which, to put it simply, the following key questions need to be answered:

  1. Why do we need a new culture ("purpose") at all?
  2. What is our current culture?
  3. What culture and underlying values do we strive for and where do we see the biggest gaps between new and old?
  4. What is our concrete roadmap on the road to new values and culture?
  5. How can we anchor the new values and culture in our behaviour, structures, processes and instruments in a sustainable manner? (this phase takes the longest with more than 18 months)
  6. How do we measure the result of cultural change, or in other words, how do we feel that something has changed? Not least: How do we want to consistently track and consolidate the changes we are striving for?

CSP as a community of culture and values

For us at CSP, the participatively developed mindset is the central common value basis for all our consultants. The CSP values - in particular courage, openness, trust, empowerment, team spirit and error tolerance in combination with striving for excellence, result orientation and consistent customer orientation - are firmly anchored in the CSP daily routine. I would like to illustrate what this means in concrete terms with three examples:

Firstly, we often and regularly give each other open and direct feedback across all levels of experience or seniority. In this way, we support each other in improving.

Secondly, continuous joint reflection on teamwork and the subsequent agreement of binding improvement measures are an integral part of every CSP consultant's day-to-day work.

Thirdly, a part of the CSP managers is directly elected by the employees every year - regardless of the formal hierarchy level. In this way, our consultants help shaping CSP and are enabled at an early stage to develop their leadership skills in a protected environment.

At CSP, too, from time to time we fall into the trap of undertaking too much and promising things or propagating measures that we then cannot keep. If this happens, the open and direct exchange as well as the feedback culture ensure that a viable solution can be found quickly. Because mistakes are inevitable, it depends on how we deal with them and what we learn from them.

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