#170 The How and Why of Culture Change

1. Authoritative/authoritarian
2. Empathetic
3. Developmental

Even benevolent organizations fall into the old paradigms, adopting their structures and practices with a fresh coat of paint. Join us to learn what the developmental paradigm offers instead and how to bring it to your organization.

Transcript

Zac: WELCOME back to Business Second Opinion Podcast. We’re always excited to bring you another episode.

But first…We want to welcome this month’s sponsor, Seed-Communities, which uses a regenerative paradigm to develop human beings and businesses by bringing an approach designed, from the ground up, on how living systems work and change. Most education and change management is based on transference of the metaphors of how machines operate or rats function in cages. This approach leaves most of the unrealized potential of systems on the table, shortchanging people and life itself. As a member of Seed Communities I can tell you the difference is profound for the development of myself as a leader and how I grow my own business. When I found Seed Communities it was like I finally found a way to think about things without all the drawbacks.

We hope you will check out this great Regenerative Education philosophy at SEED-Communities.com.

Business Second Opinion Podcast digs deep to explore questions about business and business practice. In the process of examining them, we give you a second opinion, usually a contrarian opinion, but one that is well tested and proven to give the outcomes you really want without the side effects. And by the way, if you want to learn more about how to work more closely with us, stay tuned at the end of the show.

I am Zac Swartout, and always with me is Carol Sanford, our inhouse positive contrarian. Who responds to big and hard questions with a radically different take. 

Hey Carol

Carol: Hi Zac, I got a great suggestion for a second opinion last week for a handful of members in The Regenerative Business Development Community. We were working on culture in our leadership phase of work and how to know what you have and how to change it.

Zac: I’m pretty excited about this one Carol. I focused on culture a lot when I was in the health care system up here in BC. It’s also starting to come up more and more in my current company. For our listeners, I know we’ve discussed culture here on business second opinion before, but one of the principles that Carol and I work from is all about never doing the same thing on the same subject twice. So it’s important to us to tackle a mysterious subject like culture and do it differently each time, getting deeper and deeper into the idea.

Carol: Same thing this time. People were so excited and wanted to go to work with what they had learned. But of course it is not a program fix so they went through the workshop and at the reflection time at the end, they wanted more. And one member said, “why don’t you do a podcast on this subject?”

Zac: I like that, but we need some particular things to do that, right? Like where is the first opinion. We don’t give an opinion of a subject but a critique of someone else’s opinion on a subject. Can you remind folks why we approach things this way?

Carol: I reminded them it needed to be a first opinion on a business subject that was publically available so people can do their own assessment alongside us.

Zac: Exactly. Too often we have people send a subject and say they want our opinion. We don’t do that.

Carol: Right, are critiquing, adding to and augmenting a written or oral argument someone has made on a subject, usually how to do something in a business or organization. People often send their opinion, tell me their side of the story and ask for mine. The only thing I can comment on then is their opinion and no one else can see it. So I need a written opinion, publically available, on a business subject that is interesting and discussed often in print which makes it easy. We have the subject, the author’s opinion, our opinion and these can be used to create an interesting thinking puzzle.

Zac: Then we comment on the written public opinion of that subject. And people can compare to their own thoughts.

Carol: The members who recommend culture change got it, searched, found and sent me an article from about 10 years ago but the ideas still are advocated. So Zac, you read it. What would you say they are advocating about how to change culture in this article. Then people know what we are giving a second opinion on

Zac: Yes, ok cool. So the article was from Harvard Business Review: Let’s Talk Culture Change by Ron Ashkenas, March 22, 2011. Well, the article is basically structured like a case study, so I had to extract what I thought they were trying to demonstrate. But what it seemed to me they were saying was that culture change is daunting. It’s daunting because culture is a soft concept and therefore not measurable making it hard to change. And that secondly culture represents the collective norms and behaviors of a group of people. As Ron says in the article, it’s hard enough to change one person’s behavior, how do you change an entire organization?

Ron then goes on to tell a story about a manager in a large consumer products company coming into a new managerial role at a notoriously difficult to manage facility. The manager vows to change the culture there and does so through:

1. Communicating with his front line staff
2. Working with his leadership team to develop a vision and values statement for the company
3. Instructing his managers to model the behaviors his leadership team came up with all the while using normal every day communications channels to teach and reinforce the new behaviors in order to convert people to the point of critical mass.

Carol: What was your opinion of the points they were making?

Zac: I think of this article as getting stuck in the same trap a lot of other ideas about culture change do: lets reduce the idea of culture to be about behavior change but at scale. And the only way to change behavior is through, you guessed it, Behaviorism! That means role modeling combined with positive and negative reinforcement in order to ultimately get people trained to behave like you want. 

Carol: Why do these ideas matter that you are speaking about? Where would they lead people?

Zac: Well the good news is I’ve seen this kind of a strategy at work in health care. The bad news is, it’s ineffective in actually growing people. This kind of a practice, while well meaning, ultimately leads to other toxic issues in the workplace like burn out, depression, resentment, high turnover, etc. Gallup conducted a global workplace poll in 2017 during which they discovered that 15% of people were engaged at work. A surface change in behavior is one thing, but people actually actively deriving meaning from and using work as a way of contributing to the lives of others seems to be incredibly far away from what we are talking about here.

Carol: This last member session we were looking at a lot of ideas, whats hows whys, but the part we can give an overview of in a podcast is the paradigms of culture we offered. The Authority Centered, the Empathetic Centered and the Developmentally Centered.

Zac: So the Authority Centered is the old command and control paradigm for sure. Where it is all top down, centralized and dictator like management process.

Carol: It does include that but the paradigm is found in benevolent organizations or certainly less dogmatic ones. That is because the authority paradigm culture can be one who gives clear direction, is authoritative and trusted or is expert based. Can you see how that could be true?

Zac: If you do even cursory research on the impact investing space for example, that is a space all about doing better than the “investors and return first” sort of financial paradigm, while attempting to be less dogmatic. Meanwhile many companies often share the same management structure and practices as their “old paradigm” counterparts. It’s the same way of working with a fresh coat of paint.

Carol: This paradigm is focused on functional performance and the ability to adhere to patterns of organizationally expected behavior and thinking. This can be malicious or benevolent in nature

Zac: One relatively straightforward way to recognize all of this at work, is through titles representing a level of authority in the workplace. These roles also matter in our lives beyond work in this paradigm. The big decisions are made by powerful, smarter, and the most talented people. When I was 22 in finance my title was Vice President. Can you believe it? That title was given to all of us on the sales side because it was intended to seem to our clients on the outside that we had more meaningful positions than “sales associate”. In that world titles matter and indicate authority.

Carol: Those are good indicators. It is all externally determined. External to a person, a team or department. There is some authority. Where did you see that here?

Zac: Right…in the article everything flowed from Ted who was on top of the factory. Then to his leadership team, then from there to his managers, then down to the frontline workers. All ideas and behaviors came from him and his leadership team, as the sole authority. They then externally determined how everyone else should behave – like in the examples Ron gives of making their staff swear less and take shorter breaks.

Carol: There is also the idea of role models where people are to show the pattern and everyone copies it. And change, decisions, communication is all cascaded from top down into the so-called “ranks”.

Zac: Definitely. This is exactly the same structure as healthcare but it’s even more siloed. In a given hospital you have 2 verticals of hierarchy: you have the administrative managerial team with an executive director at the top, and then a medical hierarchy with doctors at the top – with all the nurses at the bottom. No wonder nurse turnover rate ranges between 8% and 37% nationally! And that’s not including internal churn. How would you feel if you had 2 sets of bosses constantly trying to change your behavior. It’s like mom coming in and telling you to clean your room one way, and then dad coming in and saying something totally different.

Carol: The second culture I mentioned was an Empathetic Cultural paradigm.

In an organization operating at a paradigm of sensitive energy, behavior becomes a central focus. There is an expectation that people, their origins, and their gender will be paid attention to. There is a level of awareness and caring in such an organization that does not exist in an organization operating at the level of automatic energy. Being is expressed more opening in the business rather than the functional focus in automatic cultures

Zac: And leadership seeks participation, input, and ideas from across the organization. They also may support training and task forces for resolving issues that affect groups of people.

Carol: The leadership processes of a company operating at a sensitive level of energy demonstrate their expectations, people are encouraged to find upgrades and improvement built into work systems. Each decision is made against the context indicating the need of a decision and there is a clear articulation of the goals involved in making the decision. Generally speaking, the members of the organization are carefully schooled in the guidelines expected of members of the organization and where there is autonomy available.

Zac: This is a big shift. People in an organization operating at an empathetic paradigm level are expected to direct their work toward: 

• that of addressing their will to be of service, 
• in terms of their being, they are expected to exhibit and bring their full selves and qualities appropriate to the activity they are involved and avoid being mechanical or generic, 
• and that they orient their behavior toward maintaining desired standards of performance rather than just adhering to job descriptions.

Carol: The experience is one of being involved in the work. They see it as their job to evolve themselves as workers. They are accountable to manage situationally for the intention of fairness, equity and diversity across the system.For example, seeking to include more people and give more opportunity to a broader spectrum. This is based on the idea that people are able to grow and evolve if they “put in” the work.

Zac: Those who do the hard work, develop a higher level of presence beyond their title. It can also lead to promotions as well as involvement in projects or engagement special tasks. Gaining experience is the hallmark rather than past performance as an indicator of what was possible for a person in the automatic

Carol: I also notice that competencies are articulated so everyone knows the expectations and what to aspire to. This is based on personal growth as possible for all people if they stepped up to it. Collaboration and teamwork are brought forward to a higher degree and a reduction in competitive processes among people in the organization. 

Zac, What is your experience of this paradigm? How is it different than the Authority paradigm in cultural experience?

Zac: We definitely had this one too in healthcare. There was an acknowledgement that the results of what was happening for frontline workers in healthcare was not going well as evidenced by high turnover and burnout. So instead the health authority would bring in consultants to do evaluations, using competency driven models to evaluate people, and use coaching and facilitation based processes to try to make them find meaning at work. This would put people on rails to become what was perceived as better managers and give them a path towards higher levels of responsibility. In many cases though this backfired because, once again, it was all about rewards and recognition rather than actual development. I remember in one case that a director was put forward into a new role in a totally different department from which he was familiar. He had had all the training, been given all the feedback, found all the meaning, and was ready to take on anything. Within 3 months he was floundering. So his vice president seeing this as a failure of the director, rather than the health authority’s process, ended his 30 year career. It was heartbreaking.

Carol: Ugh, I hate stories like that. I saw another similar kind of thing happen with another indicator of this empathetic culture paradigm, which was climate surveys. They said, we’ve got to know what’s going on with people, so let’s ask them. They put out a whole, I don’t know, three month process of interviewing, following up, how to task team, and then brought it to the leader and this was in a new department, it was his idea, “let’s find out where people are.” He presented it to his managers but wanted to include some others, brought them in and as he presented what the task force, who were actually outside consultants, brought, people listened and they thought, “I don’t even recognize these.” The problem with things like culture surveys, which arise out of this empathetic desire, is they go through two or three levels of translation. You come through the outside consultants, to the internal managers, to the people who are going to work with them, and the inability to understand how you develop people is lost. The same thing happened with this guy, he wasn’t let go but he was written up and he was replaced. All because he didn’t know how to carry out a survey.

So we’ve looked at the authoritative, sometimes authoritarian. We’ve looked at the empathetic, which often as you said is a reaction to the authoritative. What we do with all the places we’re involved is we work with building and helping people understand what a Developmental cultural paradigm looks like. 

In an organization operating here they are mindful that each entity and person has a “way of being in the world” and identity of their own which is consistent with their essence. And the persons and organizations both seek to reach higher strata or higher orders of existence, to make greater contributions. Generally speaking, they seek to provide products and perform functions that reflect aspiration for a higher order existence. They seek to have the will to care and to create a world of social and ecological harmony. They see living as a means of providing redeeming values to the future.

Zac: They seem to care about the intrinsic nature of humans in the organization and the striving for higher orders of ableness with a greater understanding of the working of reality. They make sense of the world from systemic questioning. That way, the people relate without hierarchies of power, only hierarchies of effectiveness for all living people. Work is structured so everyone does things out of conscience and conscientiousness.

Carol: In a developmental culture, they each, and ALL, work to produce something of higher value and to provide all members of the organization with the ability to engage in meaningful work. They tend to the people and events with equanimity and acceptance. They have the will that seeks to uplift Earth and the life upon it for the future. Accountability is seen as intrinsically evoked toward that which matters and is life-giving. It is sourced through-time and in-time reflection and personal development as the primary means of awakening inner will to contribute to greater wholes of which we are a part.

Zac, how does Essence relate to this cultural paradigm?

Zac: In my experience everything starts from essence thinking. Working to see the pattern behind the patterns of how life works. At the hospital where I worked an aspect of the essence of that community was about self-reliance. The hospital was founded in a spirit of the community coming together to create their own hospital when other communities saw them as lesser than. So we worked to infuse this into all the projects and initiatives that were being called for in the community. As a result our hospital ended up being a pilot community for many successful projects that were then emulated throughout the health authority.

Carol: The opposite case is core competencies so authority can control and sometimes teach leaders to ask about families and know names, join racial bias groups. But having authority to shift things in the business is what really works, with each individual setting out with a promise to a stakeholder. It is integrated with the business. That is the kind of culture that people thrive in, and the business really prospers.

The big shift for me is that work and ways of working aim all toward building internal locus of control, external considering and personal agency evoked from great contribution to the whole in the context of strategic direction. 

Zac, looking at our story, how does this get handled?

Zac: Well unfortunately our HBR case study lacks all of these ideas. As we see most of the concepts end up living at the lowest order of paradigm, as our protagonist Ted hopes to externally determine how everyone at the factory behaves. While his metrics of performance and safety incidents had begun to move in what were viewed as more favorable directions, this type of change is often transitory and leaves when Ted or his managers leave. What’s worse is the article focuses inside the organization, leaving out any mention of customers, markets, or innovation. Instead that is all, I assume, left to Ted and his expert team. 

Carol: Regenerative leadership is about working developmentally with humans to design and build cultures that foster consciousness and conscientiousness and develop people to be self-directing in their work, using infrastructure that is always and on-goingly building that capability.

Zac: This is Business Second Opinion

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Carol: We have several new learning communities to do this kind of thinking starting in 2021.  If today’s show intrigued you, it was sparked by members in one of our regenerative business communities. The second year is about leadership including leadership of change in one business or organization and an industry. Check out our different business communities at CarolSanfordIntitute.com under Offerings.

Zac: How to get your idea selected by Business Second Opinion for a show. On Business Second Opinion Webpage. 

Carol: Your organization can set up a book club for The Regenerative Life, using an extensive workbook and video online Workshops for Free. 50% discounts on bulk buys through my publisher. More at carolsanford.com.

Zac: This has been Business Second Opinion

Business Second Opinion Podcast digs deep to answer questions about business and business practice, you may not know you need to ask. But we believe you should be asking for the benefit of your understanding and your businesses ethics and practice. In the process of answering them, we give you a second opinion, usually a contrarian opinion, but that is well tested and proven to give the outcomes you really want without the side effects. 

* * * * *

Business Second Opinion Podcast digs deep to answer questions about business and business practice, you may not know you need to ask. But we believe you should be asking for the benefit of your understanding and your business’s ethics and practice. In the process of answering them, we give you a second opinion, usually a contrarian opinion, but that is well tested and proven to give the outcomes you really want without the side effects.

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WAYS TO CONNECT WITH CAROL SANFORD EVENTS OR HER WAY OF THINKING

• Explore how you can learn to apply the alternative approaches offered in Business Second Opinion.

• • Participate in The Regenerative Business Development Community series with 10-12 other businesses. Options include: Strategic Thinking/Business Development or Leadership of Industry and Market.

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  • Explore joining the community or email Carol
• Apply the concepts in the Business Second Opinion Podcast to roles you personally play in and beyond business. E.g. parent, designer, earth tender, educator, media content creator, entrepreneur, citizen, economic shaper, spirit resource (coach, ministering, therapist). Join, for free, The Regenerative Human Book Project Check it out. Email to join or ask questions.
• Read Carol’s books or join a book club
  • The Regenerative Business: Redesign Work, Cultivate Human Potential, Achieve Extraordinary Outcomes
  • The Responsible Entrepreneur: Four Game-Changing Archetypes for Founders, Leaders, and Impact Investors
  • The Responsible Business: Reimagining Sustainability and Success
  • No More Feedback: Cultivate Consciousness at Work

Her books have won over 15 awards so far and are required reading at leading business and management schools including Harvard, Stanford, Haas Berkeley and MIT and almost 100 other academic institutions. Carol also partners with producing Executive Education through Babson College, Kaospilot in Denmark and University of Washington, Bothell, WA, sponsored by The Lewis Institute at Babson.

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Carol Sanford and Zac Swartout, co-producers