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This newsletter focuses on my review of the recently published book The Secret of Culture Change, which is about top-level management’s use of stories in culture change.
I was excited to read this book as it is one of the few I’ve found that methodically links organisational culture change with story and storytelling. My ideas about culture change are predominantly bottom-up, while theirs is top-down. But, as you will see, things are never that simple.
Culture eats strategy for breakfast
The book is devised for business leaders and was written by Jay Barney, a strategic management scholar, Manoel Amorim, a former CEO and board director and Carlos Alberto Julio, a business school professor, board member and former CEO.
The book is based on over 50 interviews with business leaders — including presidents, CEOs, functional vice presidents and entrepreneurial founders and the analysis of over 150 of their culture-changing stories.
The authors come from the position that if you want to launch a new product or have changed your market position unless your organisational culture aligns with your strategies, the full potential of the effort will not be realised. As Peter Drucker said, “Culture eats strategy for breakfast.” In other words, culture often prevails in conflicts, so aligning culture with strategy is critical.
Story building
Rather than gathering the employees around a big campfire and telling them a story, the authors propose the creation of “story events”. These are actions that leaders take that send a message to the organisation about the importance of certain values.
One example is Manoel Amorim, who became CEO of Telesp, a Brazilian telecom company.
From top-down to bottom-up
“Our government-protected monopoly in the São Paulo market was going to end, and we would have to compete for our customers’ business. It was obvious to me that we were going to need to shift from a command-and-control culture focused on reaching government service requirements to a customer service–oriented culture.”
Amorim discovered a hidden helpline for senior managers and promptly closed it. He called the public helpline to support his issues with the company’s product and talked to a young call centre employee. He then got that employee to present 14 critical improvements to the executive committee, leading to a successful product relaunch.
This story of taking customer focus seriously and listening to the workforce catalysed cultural change, empowering employees to contribute ideas and fostering a customer-first mentality.
A prison diet
Then there was the CEO who, shortly after getting into the post, found that the company was not performing to expectations and, worse, was losing money. It also became clear that they had a poor culture of self-satisfaction and complacency.
They engaged an outside consulting firm and developed a strategy that necessitated layoffs. They scheduled an offsite meeting for the executive team to finalise the resulting plan and achieve buy-in. Then, he noticed that the team had booked a luxurious venue for the event. It was too late to back out of the booking, so he went ahead with it, but without announcing the fact, served everyone just bread and water.
He spoke to the assembly, saying, “We have let down our customers, employees, and shareholders. So, I have decided to serve the only menu that we, as a company, deserve tonight. Bread and water.” There were quiet nods around the room. He then said that he expected they would turn things around, and next year, they’d be back eating a posh supper.
This action, what the writers call a story-building event, spread a message throughout the organisation, and they turned things around within a year.
We are also familiar with story-building actions from political leaders, and the book cites the famous Salt March– the act of nonviolent civil disobedience in colonial India, led by Mahatma Gandhi in 1930 against the British salt monopoly.
The six criteria for story-building actions
The criteria recommended for good story-building actions are:
- The actions that build these stories are authentic.
- These stories “star” the leader.
- The actions that build these stories signal a clean break with the past, with a clear path to the future.
- These stories appeal to employees’ heads and hearts.
- The actions that build these stories are often theatrical.
- These stories are told and retold throughout an organisation.
Their philosophy is that this story-building demonstrates a leader’s irreversible commitment to culture change by their actions being central to the stories.
The story cascade effect
If you get such story-building actions right, they lead to a story cascade effect.
“The mechanism through which cultures are diffused and maintained in an organisation is through the stories your employees tell about your company, how it conducts business, what it values, and so forth. Stories are the lifeblood of your culture. It makes sense then that if you want to change your organisational culture, you need to change the stories your employees tell each other.”
This aspect of their method aligns precisely with our design for Drama for Change, although our process starts from the bottom up.
Conclusions
The authors of The Secret of Culture Change conclude that successful culture change in an organisation involves:
- A dual approach.
- Combining top-down and bottom-up efforts.
- Emphasising both emotional and rational decision-making.
- Fundamentally altering the company’s cultural system.
This comprehensive approach often combines various change management models. A consistent finding is that storytelling is crucial to the culture change process.
Effective culture change engages leaders at all levels, considers both emotional and rational aspects of change, and views culture as a complex system with interconnected elements.
So, for me, this is quite heartening as the design of Drama for Change has largely sprung from the theoretical development of my existing practices as a video producer for behaviour change in large organisations. And the method I’ve developed harmonises very well with the suggested approach.
The other thing that the book throws into relief for me is that if teams are tasked with changing behaviour and culture, they need the conspicuous support of top management to give that message clout. L&D and HR teams can often feel isolated, and here is the evidence that top management must back them if they want to realign a culture actively.
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