There must be a process of strategic change. The culture of your organization can change! No, no…. the culture of your organization WILL change! The only question is whether it will change in way that creates a strategic advantage, or simply change based on the transitory fads and preferences of individual managers. Leaders assert their will on the organization and do so in a way that creates the culture and capabilities that lead to competitive advantage. This is the game.
Over my more than forty years of working with great companies, I have learned just a few things about creating positive change in the organization. Here they are:
Leadership begins with knowing your principles. What are the non-negotiable values that guide behavior and the creation of your organization’s systems?
Of course, all corporate leaders want to increase return to shareholders – shareholder value. Great leaders want to optimize the value of the business enterprise. This is something entirely different. Value is the ability to create new products. Value is a lean process that minimizes waste and optimizes productivity. Value is a culture that attracts and energizes employees, bringing out their maximum discretionary effort. Value is brand equity – the trust of the marketplace. Then shareholder value can be optimized.
The job of the leadership team of any organization when leading change is twofold: First, to institute a process of redesigning the systems of the organization to create the culture and capabilities that will result in strategy execution. Second, the leadership team must model the behavior they expect of others in the organizaton. Their model of behavior is a key driver of successful change.
Strategy can be divided into both external and internal strategy. External strategy faces the marketplace and external stakeholders. It is the future growth, market share, and financial performance. Setting targets for this external strategy may be the less difficult aspect of strategy. The more difficult aspect is executing the strategy and that requires the development of new or improved processes, culture and capabilities. It is all the stuff that is needed for the transition from the current to the future state.
Whole-System Architecture is the process of redesigning the technical, social and economic systems of the organization. It is derived from socio-technical system design, the methodology that created the first self-managed team plant designs. However, it is expanded with an understanding of lean/agile management and the requirements of business strategy.
In my book Getting to Lean and in my online course, Agile Strategy Execution, I have attempted to define the process of developing and executing internal strategy using the Whole-System Architecture methodology.
The culture of any organization is affected by many things. Different industries, markets, and countries tend toward different cultures. And, the systems of information flow, work processes, structure, all of the HR systems, all influence the culture. But the culture is also habitual behavior and changing that habitual behavior requires leadership.
It is a responsibility of the leadership team to learn and model the behavior that will be desired of others in the organization. Modeling is a powerful form of teaching.
For many years I have had a team manual that taught the basics of effective teamwork and problem-solving. Effective teams are the heart and soul of lean organizations. In recent years I have developed and refined my online team leadership course, Leadership Skills: Leading High Performing Teams. This course provides all the basic skills and philosophy of both lean and self-directed teams. My Team Kata book is a text for this course.
At Toyota every manager has a coach. Every great athlete, as a coach. In business we have tended to view the need for a coach as something remedial. “I don’t need a coach! What’s wrong with me?” Why does Tom Brady have a coach? Why do all the world’s best athletes have a coach? The answer is simply that they are engaged in continuous improvement of their own skills. That attitude of excellence, the attitude that we can all improve, is an essential model for others in the organization.
My book The Lean Coach and my online course Coaching Leaders for Success are both based on an assumption that a) every leader needs a coach; and b) every leader is a team leader and the coach can help to develop the team toward high performance and self-management.
The combination of these elements, commiting to principles, the redesign of the organization’s systems and structures, the development of effective teams and team leaders, along with coaching, have proven to create sustained change and implementation of lean culture.