Larry Senn

Organizational culture has reached a tipping point, yet many culture change initiatives fail for four key reasons.

My fascination with culture began more than 40 years ago when another young industrial engineer named Jim Delaney and I started a process improvement consulting firm not long after graduating from UCLA. I quickly discovered that it was easier to decide on change than to get people to change.

I observed that companies, like people, had personalities, and while some were healthy, most were like dysfunctional families. They had trust issues, turf issues and resistance to change. The difference between working with Sam Walton on the supply chain at Walmart and working with Woolworths was like night and day. It was clear one company would succeed and the other would fail because of the mindset and habits of the firms.

That led me to a professor at University of Southern California who had published a book containing articles that described a phenomenon called Organizational Character. Since I had clients, he convinced me to join the doctoral program and conduct research on the phenomenon. My dissertation, published in 1969, became perhaps the first field study ever of corporate culture at the organizational level.

A Central Culture Finding

The central finding then, which holds true today, is that organizations become ”shadows of their leaders”. We knew early on that culture change had to start at the top. If the senior team didn’t collaborate for the greater good, then the organization would have turfs and silos. If they were too hierarchical and controlling, you’d find that culture from top to bottom. We found we could diagnose the culture but the challenge we faced was, how do you change habits of adults especially successful senior leaders?

Freezing and unfreezing habits

That led to a second breakthrough finding. I had a major life event that created some epiphanies that changed how I saw the world and changed some of my behaviors. My research into change through aha moments uncovered the work of Kurt Lewin, an early social scientist. One thing he said helped create Senn Delaney as a culture-shaping firm and enabled us to shape behaviors in new more powerful ways. He said “When we are young we are like a flowing river – and then we freeze.” His theory was that we get frozen into habits, and unless there is some form of unfreezing, we stay stuck.

Lewin was also a believer in the need to treat not just the leader, but the team, the organization and the whole system. As a result, we began to experiment with insight-based learning modules for CEO teams around the behaviors in a healthy, high-performing leader, team and organization. We called those the Essential Value Set.

Up until then, almost all behavior change in business was based on a behavior change model defined by American psychologist and behaviorist B. F. Skinner. Define what you want and reinforce it. It is a sound model that we employed to reinforce change after the epiphanies, but not powerful enough for embedded habits.

Interest in culture shaping emerges

There was not much interest in culture shaping when we formally launched the firm in 1978. Our first clients were retailers that wanted to have what Nordstom or Walmart had. Nordstom had the ultimate in customer service, and in those days Sam Walton had a very efficient organization with his greeters and happy boxes. Retailers intuitively got that the customer experience was a cultural thing but generally thought it was a stores issue. We stuck to our guns and when asked to create a service culture, we would say, “Only if we can start with the CEO team since the stores are the children of the whole organization.”

Major changes surface the imperative of having a healthy culture. Divestiture and the breakup of Ma Bell in the phone industry led to culture shaping there. As Ray Smith, then CEO of Bell Atlantic and later Verizon, said, “If I put my ear on the track I can hear the train coming and we are not ready — we have to change or die.” Over time, more and more industries have faced change and thereby faced what we call “the Jaws of Culture”.

The tipping point

Organizational culture has reached a tipping point. Most CEOs know that culture matters and can have a strong impact on business results. Studies now confirm it is considered as important to success as strategy, and in fact it should be a strategy in and of itself. That is the good news.

The bad news is that despite this broad executive understanding of culture, and the many studies and books written over decades to demonstrate the link between culture and performance, the fact remains that too many culture change efforts still fail or fall short of their potential.

Why culture shaping efforts fail

We have shown through our work with more than 100 Fortune 500 CEOs and hundreds of companies around the globe that successful culture transformation is possible, and we have demonstrated along the way that there are four key principles that must be followed for this to occur. I will detail those principles in future posts, but for now I’ll start by touching on the major reasons culture-shaping efforts fall short.

1. It is an HR initiative and is not led from the top. HR has a critical role in making culture change work, but as General Joe Robles, CEO of USAA, the company with the highest customer loyalty in America, says, “I’m the chief culture officer.” Watch this video with Joe Robles talking about leading the culture.
2. The process doesn’t create deep personal commitment to change. It is too intellectual and not transformational. It may create some understanding through such things as 360 surveys, but does not produce transformational ahas.
3. There are too many disconnected initiatives, and lots of activity, but culture is not clearly managed as a strategy. Every system and communication process needs to be aligned with a clear definition of the desired culture, which covers the Essential Values.
4. It is not taken from top to bottom in a way that creates momentum and mass. Cultures have antibodies and lives of their own. The process has to have the feel of “the train is heading North and you better get on.
   While the awareness of the importance of culture has clearly grown over the last 40 years, these reasons continue to undermine the vast majority of culture change efforts.

Has culture reached a tipping point? Do you agree with these reasons why culture change efforts fail? What can you add? Please provide your comments and feedback below.