What the business leader said to the MBA organisations, manage total revenues in excess of US$ 740...

What the business leader said to the MBA

Exclusive Research Report: January 2013

Organisational culture and competitive advantage through people

Executive summary

This report is entitled “What the business leader said to the MBA.” More correctly it might be called “What more than one hundred business leaders said to three MBA researchers from one of the UK’s leading business schools”.

Over the last five years One Point Three Limited, the specialist management consultancy, and University of Birmingham Business School have forged a close partnership. Central to our relationship is a fresh, exclusive and insightful programme of research. Each year One Point Three hosts a summer internship for a top student on the School’s prestigious international MBA programme. The MBA intern undertakes original research under One Point Three’s direction and with the supervision of the Business School. The work the researchers do contributes to their MBA studies and they base their MBA dissertations on the findings of their research.

This report is a collation and analysis of just some of the detailed research content produced. It draws on interviews with senior executives from one hundred and fourteen organisations. For three quarters of those organisations our researchers interviewed the CEO. Collectively these CEOs have more than one thousand years hands-on experience running organisations at the most senior level of business leadership. Our interviewers spoke with a group of people who between them lead around three million direct employees world-wide and, excluding those in public sector organisations, manage total revenues in excess of US$ 740 billion.

This report focuses on organisational culture. It distils, summarises and informs on the unique and invaluable insights the participating business leaders passed on to the MBAs about gaining competitive advantage through people. They stress the importance of organisational culture, explain what it is, and, in what they say, illustrate a growing call for speed in change management.

Personal copy for:

Andrew Miles

Birmingham Business School

About this report

This report is written for business leaders and aspiring business leaders. It is written with you in mind. We have written a short report here because you probably do not have a lot of time on your hands to read a book.

Our research is no academic enquiry, nor is it a survey. Our research is conducted through structured one-on-one conversations. Our researchers invite participants to “tell me what you think about...” and then they listen to and record what each has to say, prompting the discussion to explore their interviewees’ particular thoughts, insights and experience.

What marks the research out is the calibre of the participants. Over the three annual cycles of the research programme on which this report is based [namely 2009, 2011 and 2012] one hundred and twenty eight1 business leaders took part. The personal profiles of these individuals and statistics on the organisations they lead, make a compelling case for why this group of people is worth listening to and worth taking notice of. Furthermore, the research process is designed to produce rich dialogue and elicit clear, compelling thinking from the best possible source for business know-how: seasoned professionals at the top of their trade and on top of their game.

Research was conducted from the UK. Around forty per cent of participants had UK only operations and markets. All others either operated on an international basis, had international interests, or were based outside the UK.

Participants contribute to the research in particular because they want to promote education and encourage young professionals who are starting out on their leadership journey, because they want to help and give something back, because they are interested in the topic under discussion, and very often also because they have a connection with the University of Birmingham [we ask, and these are the reasons people give us]. The conversation process used in the research though only allows the business leader to help one individual young professional at a time. In this report One Point Three Limited has brought together key elements of the research findings from three years into a report that will convey insights to all the MBAs at Birmingham Business School!

But there is of course a lot more that we can do with this unique and extraordinary body of knowledge. This is why we have teamed up with the University to bring this report to a wider audience.

In this report we have included original actual verbatim quotations in blue text, as these were recorded and noted by the researchers. These quotations have been added to enhance the narrative, make specific points, and to “bring the report to life”. Content was provided to our researchers on a non-attributable basis. On the pages of this report we do not specifically identify the organisations or individuals who took part in the interviews, beyond the statistics given in the appendix at the end of this document. In some instances we have made slight changes to the wording of the quotations we have used to improve flow and the readability of the English. We have used our best endeavours to choose excerpts that reasonably represent the observations, wisdom and advice of the group at large.


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1 For some companies, more than one senior executive has been interviewed.

The original content on which this report is based has been provided from interviews and subsequent analysis undertaken by Pankaj Das, Rahayu Permatasari, and Sakthiraj Sethu, as part of their MBA studies at University of Birmingham Business School. This report has been reformulated, developed and written by Andrew Wells, Naren Ratwatte and Corbyn Seymour from One Point Three Limited.

The original source material from this research is rich with insight into contemporary business leadership. In this pamphlet alone we are not able to do complete justice to the wealth of knowledge accumulated through the research, and we are certainly not able to convey it all.

Enquiries about this report should be directed in the first instance to the authors at One Point Three Limited. Our address is given at the foot of the page2. For the purpose of disclaimer, this document, the opinions expressed and the conclusions reached herein should be treated as those of One Point Three Limited.

Finally on behalf of the researchers and authors, and the firm and institution they represent, we would like once again to take the opportunity to thank all those who have taken part in the research for their time, contributions and candidly expressed observations. Special mention should also be made of Andrew Miles, External Relations Manager at Birmingham Business School, who has played a pivotal role in facilitating the close partnership between our organisations.

Participants

One hundred and twenty eight (128) executives from one hundred and fourteen (114) organisations took part in the research over three years 2009, 2011 and 2012. For three quarters of the organisations involved our researchers interviewed the CEO. Participants collectively lead three million direct employees world-wide. Excluding those from public sector organisations the combined business turnover participants account for exceeds US$ 740 billion.

Sectors in which the participants in this research operate include:

Aerospace and defence

Automotive

Chemicals and materials

Construction

Mining

Hotels

Healthcare

Utilities [gas, electricity, water]

Retail

Food producers

Public sector

Financial services, banks, insurance

Logistics

Not for profit

Public transport

Manufacturing

FMCG

Pharmaceuticals

Support services

Facilities management

Aviation [airlines and airports]

Premiership football!


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2 One Point Three Limited, 11 Caroline Street, St Paul!s Square, Birmingham, B3 1TR, United

Kingdom. Mail: [email protected] Web: onepointthree.com

Size distribution of participants’ companies by annual revenues [UK £](excluding public sector)

Size distribution of participants’ companies by direct employee numbers(excluding public sector)


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Advantage through people: fresh insights into organisational culture

The research covered in this report has been conducted during a time of upheaval in the world’s economies and at a time when business leaders have been dealing with change. Some might suggest that change is the only constant in business leadership, but nevertheless it is the case that there is plenty of change for contemporary business leaders to grapple with right now.

We went asking for good advice, for aspiring business leaders from established, seasoned, successful people in business. There was limited time in the interviews, so our researchers asked exclusively about organisational culture, people engagement, about how the behavioural stuff works in business organisations, and about getting the best out of people. Those are perhaps not the most obvious things to take such an opportunity to ask about, but we were inspired by two stories.

The first story was in an anecdote told to one of us by a senior executive at a company that makes motor cars. The company has a well known leading brand and operates manufacturing plants in every industrialised region of the world. The story was about an incident that took place at the company’s main European car assembly and engine plant. To help it cope with the economic situation in the motor industry early in 2009 [there was a downturn in the number of new cars selling in Europe] the company shut down its factory operations for four months. Not only did it do that, it also changed the pay structure for its industrial staff and everybody took a pay cut.

When the company started up production again a ‘town hall’ meeting was held to brief the workforce about the current situation, the outlook for the business and the implications for the workforce and the company’s plans. At that meeting, the management told its employees that the future was uncertain and that there was likely to be more pain to come. You can imagine the scenario. It is fair to say also that the plant is located in a country where the prevailing national culture is not necessarily noted as the best case study for great industrial relations.

Now, at this point one of the industrial workforce, not a specific representative at all, just one of the crowd, quite spontaneously and without prompting stood up. He spoke to the floor and he said: “the company has been good to us, and now for me it’s pay back time”. He used that term in particular, “it’s pay back time”, and he went on to say that he “would be there for the company”.

Remembering that this is an industrial workforce that had just taken a pay cut, and who had just been told the future is fraught and uncertain, what happened next is remarkable. The people around him started to a clap. The audience applauded their colleague who had spoken, and they stood up to do it.

We figured it would be worthwhile reflecting on that story, on how such an effect can be achieved, and how others might do it too.

The second story comes from one of our clients at One Point Three. Newly appointed Managing Director of a division at a FTSE 100 Group, one of our clients had been given the job of bringing together several previously separate operating companies into a single cohesive business unit. The task for him and his team was to create the division that would become a major engine for growth for the Group.


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In getting to grips with his task, our client had a mental check-list to guide where he needed to focus attention, and where he wanted to place effort. Organisational culture, “the way we do things here”, was on his list.

To encourage his team, our client borrowed an aphorism from the well known and highly regarded management scholar, the late Peter Drucker. Peter Drucker is sometimes and by some called ‘the father of modern management’.

“Culture”, our client advised his team, “eats strategy for breakfast”.

That sounds significant to us, and a bit scary. If that maxim is true, organisational culture should be a subject worth knowing about, and Peter Drucker’s idea should be one worth taking seriously.

What the business leaders said to the MBAs.

Advice about the importance of organisational culture is widespread and frequent, if you look out for it. For example, in the weekend business press recently our attention was caught by an article quoting a successful business leader who talked about “the six c’s”. He was a turnaround specialist. Basically his advice was this: when you are turning around a business [and we suggest the same could be applied to building a business, leading a business to success, or perhaps in straitened times simply ensuring your business survives!] make sure you have a proper handle on “the six c’s”: cash, costs, customers, concept, culture... ...and be prepared for crises!

That is a good list, in our view. It neatly summarises when, where and why business leaders have to intervene, and why change might be required, to ensure proper stewardship of their businesses. And if you are given a different list by a different successful business leader, the chances are that “culture” would be on that list too in some guise or another. Here is one of the participants in our research speaking, to illustrate the point.

“If I was to list out what are the key roles of the Chief Executive, or of the leadership team, number one is to get the culture in the business right. What I am clear about is that you can have the best strategy in the world, but if the culture of the business isn’t right, you haven’t got a hope. I can’t do fifteen thousand people’s jobs. I can only do one job. Number one on my list of priorities is getting the culture of the business right.”

We have not analysed the frequency of mention that culture gets in the business media. We suspect though that it surfaces most often, and most noticeable perhaps, when things go horribly wrong.

Organisational culture is a recognisable and widely used term. Put aside the text book definitions, in this research participants used the term variously to refer to three factors: explicit behaviours [“the way we do things here”], presuppositions [values and beliefs that guide attitudes and decision making, subscribed to by the leadership and community], and thirdly a sense of a corporate heritage and identity.


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Participants’ concept of “organisational culture”:

“When I talk about culture I mean the innate base from which the people in the organisation will take decisions. It is absolutely fundamental, because with an organisation of any size, beyond a few people, you ultimately are relying on people taking decisions, and that’s at a very broad definition of decision taking, in a way that you would wish them to do. The absence of a coherent and consistent culture means that as decisions are taken on behalf of the organisation, the outcome of that process will be random rather than consistent with how you want it to be.”

“The culture of an organisation is what the heart and soul of the company ethos is, and the way in which the company relates to the business that you do. In this company we are a customer services business and I’d like to think that the culture of the company is built around customer service.”

“We don’t talk about culture as such. What we talk about, increasingly lately, is the way we do things around here. For us that is absolutely a key thing too. Behaviour is everything. You can’t espouse a culture of openness, honesty and integrity for example and then lock yourself away in your office. You can’t espouse your views of how your people are the most important factor in the company and then give yourself a big shiny desk and better IT than everyone else has got.”

The use of the accessible and practical description of culture as “the way we do things here” we found to be widespread. It is useful too, because it is thus that organisational culture becomes a practical management tool.

The scope of our research is considerable, and emphasis varies from one industry to the next [of course!], but overall across the sample the key areas cited in which


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culture makes a difference are set out in the next exhibit. These are the top six dimensions where culture is clearly recognised as an essential factor in success:

i. improving customers focus, service and the customer experience

ii. lifting performance

iii. workforce engagement

iv. keeping people safe

v. getting people to collaborate and work together better

vi. innovation

Participants’ assessment of where culture has greatest role, impact and benefit:

“Culture is absolutely critical to the success or failure of the business. The way we have gone about trying to form the culture that we want is to put in place a clear strategy and a series of strategic priorities underpinned by a series of values and behaviours with which we want to operate the business. We want to be performance driven and values led.”

“Let me give you an example of how culture benefits us. You can imagine at the moment our team in Greece, given the economic woes in that market, is having a b***** tough time. Their engagement scores though are through the roof! The verbatims that underpin those scores say things like ‘we’ve never felt as included, so valued’. They talk about the fact that management recognise ‘the hardships we are facing’, ‘it’s great to be part of this company’, things like that. And surprise, surprise, even though the market in Greece is off massively, our market share is up massively.”


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“I want my company culture to make us more profitable. That’s what it is for.”

Participants in our research are very clear about the weight they place on organisational culture as a factor in their business leadership.

We tested the importance of culture with a simple question. We asked one of our MBA researchers to send Peter Drucker’s maxim to the business leaders she would be interviewing, beforehand, and then quiz them on it when she saw them.

“So,” she would ask, “culture eats strategy for breakfast. What do you think?”

It turned out one or two of the participants had actually met Peter Drucker and had been impressed by him personally. But the very first response caught the overwhelming mood and summed it up.

“Don’t believe it! Don’t believe it!” The interviewee replied. “That’s typical management guru b*******.”

Our researcher started to get a bit worried at this point. This was her first interview after all. But then her interviewee went on.

“They are both equally necessary. Neither on its own is sufficient. An organisation that does not have both is not going anywhere. It’s a bit like saying which is most important: your heart or your lungs? It is impossible without both. Saying that culture eats strategy for breakfast, which is to suggest one is more important than the other, is a completely fatuous debate. Strategy, sound financial management and culture all together come out in your performance. There is no point in saying ‘I’ve done a customer satisfaction survey and my customer service culture is fantastic’ if I’ve lost £100 million. I see no point in that! Everything comes together. It’s like your heart and your liver and your lungs. You need them all to work.”

Culture ranks with strategy, and it is on a par in importance with maintaining a strong balance sheet.

“Our business has a strategy and it has a strong culture. It has a strategy for growth, for health and safety, and continuous improvement, but you are never going to deliver any of that without making sure your culture is right. You have got to engage with people, you have got to really understand their motivators in order to get the behaviours you want to then deliver your strategy. They are inextricably linked. You can’t have one without the other. But ‘who drives who’, I don’t think you can say.”

“How would I know the value of our culture? I don’t really know. What I would say, though, is this: I know the cost when we get it wrong, and I know the prize when we get it right. And I’m happy to give you examples of both. What I have not done is to be seduced into trying to put a value on it. But you know when things are right and you know when things are wrong and when you need to act to do something about it. When you get it wrong it can be corrosive. Get it right and you get more than the sum of the parts.”

“I don’t walk around with a figure, saying our culture is worth two billion US or whatever. All I know is that without the culture that we have created here, we would


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not be delivering the performance that we are delivering. And if you look at total shareholder return, I’m not saying we’re the best, but we’re pretty strong players!”

“What I can never say is how much culture contributes. We have a great advertising campaign for example, that is really making a mark. How much of that is because of our culture? How much of that is because we’ve got a great Agency? How much because the guy or woman who is running it had a moment of brilliance? I see little point in trying to analyse that. My experience tells me though that I’ve got to have the stars aligned, and an essential component of that constellation is culture.”

“I don’t think culture eats strategy for breakfast. I think that’s nonsense, personally. But you should have no doubt about its importance. Most of my competitors have locations that look exactly like mine. They have equipment that is the same as mine and which they buy from the same suppliers as we do. They have delivery vehicles that are exactly the same as mine. What makes my company different is people. We could have the best equipment in our industry and the best physical locations, but without our people wanting to get out of bed and be winners, and really being motivated on a daily basis, then those assets are irrelevant.”

“We have an expression here, we ask the question: does it make the boat go faster? If the strategic plan is to go in a particular direction, that plan is all well and good. But if you’ve got fifteen thousand people on the boat that don’t know how to row and don’t know which direction you’re going in, don’t know why you’re going in that direction, if they’re not collaborative, if they’re not working as a team, if they’re all pulling in different directions and not focused on the objective... ...great strategy, but it ain’t going to go anywhere.”

Our participants placed culture firmly in the realm of the Chief Executive and the leadership team. For some “the way we do things here” sits at the very heart of what really differentiates the organisation; at the least it makes a difference for all.

“I probably wouldn’t even answer the question, if you were to say to me: what’s more important, strategy or culture? I don’t see that as a relevant question, with respect, because one without the other doesn’t work in any event. But as a leadership team, the biggest challenge we have, and the hardest job to do is to get the right culture for your business, and get that embedded in your company.”

“Culture is what the company is. Strategy is what the company does. You have to get both right. I know that’s a rather trite thing to say. They are both essential. You have a strategy whether you want one or not. You have a culture whether you want one or not. Getting the two to align is the trick of running organisations. Neither is more or less important. They are both determinants of the outcome.”

“The world we work in today is far more complex than when I started out in my career. It requires a degree of agility you never saw then, a degree of freedom on the part of individuals to act, more creativity and flair because it is such a very competitive landscape. And it requires a degree of cultural fluency. You don’t have to be fluent in many languages, but you do have to be very understanding, tolerant, embracing of a plethora of different cultures. If you don’t have the right [organisational] culture, and what the ‘right’ culture is will be different for many different companies, you won’t have the agility and alignment that is required to run the business well.”


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“It is the worst of all crass descriptor’s perhaps to say ‘we are a people led business’. That’s an overused phrase. But for us to really work as an organisation, we need twelve thousand people to run in the same direction. So we’ve got to make sure that the pervading culture inside the business is one that is open, so we share as much information as we can with all of our colleagues, that we communicate with our colleagues so they understand what’s different about working here, what makes the difference between us and the ten other companies that could do what we do, what’s the differentiator.”

“Ultimately if you are in the right markets with the right products and the right financial backing, then you may probably succeed. Eventually. But not having the right culture will slow you down enormously. Let me give you an example. I fly [carrier name] everywhere because they’ve got great First Class cabins where I get a good night’s sleep. Their timetable to the States is excellent. But their staff hate [carrier name]. Their customer service ethos is virtually nil. Their staff are surly. Given how often I fly, they don’t take care of me terribly well. But ultimately their product, in terms of their First Class bed, and their strategy, in terms of offering lots of flight options to major US cities, are absolutely right. [Competitor carrier name] staff on the other hand are significantly more helpful. They all buy in to the [name of CEO] culture and what their company is all about. But their flat beds are nowhere near as big and comfortable. Their timetable is not as good. So much as I like their culture as a customer, nine times out of ten I fly [first carrier name]. Strategy is always crucial. But would [first carrier name] do even better if they got their culture right? Absolutely! Because there are times when I deliberately don’t fly with them just because I don’t like them and I would change if I could and fly [competitor name]. They could undoubtedly do significantly better if they got their culture right.”

“If you look at our performance through this downturn, all through this recession we have been the only company in our industry to be profitable. We just have people who go the extra yard. That’s what it is down to. That’s what you want. Why do they do it? Partly because they like the company. Partly because there’s something in it for them. Partly because that is how they have behaved for a long time now. It’s impossible to attribute how much of which element of all of that makes them go the extra yard, but it’s because of the way we do things here that we are as successful as we are.”

So the first piece of advice from the Business Leader to the MBA? Put organisational culture, “the way we do things here”, on your agenda and keep it there.

Of course, just because corporate culture is on your agenda as a business leader does not mean it should be a daily preoccupation in the sense that you should be continually introducing new initiatives. Indeed that is likely to be counter productive. Just as we have seen in an earlier exhibit that there are different facets to company culture [explicit behaviours, values and beliefs, and so on] so too there are different types of leadership action and time-scale needed to nurture these.

From the perspective that culture is concerned with the presuppositions on which you found your company’s success, continuity, consistency and authenticity in what you do are essential. Successful businesses are like successful business leaders, or winning athletes, or high performers in any walk of life. Like you they are successful in large part because of their character, their habits, their faculty for purpose and will to perform. These are things exhibited each day, everyday, over the long term.


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“My background is HR, employee relations, employee motivation, that sort of thing. I worked at [Japanese motor manufacturing company]. In most industries you can buy the same equipment [as your competitors], you can buy the same IT systems. The thing that differentiates you is your people and the culture. You have to apply the same professional approach to that as you would do to other disciplines. At [company name] we used to get loads of companies come and try to copy us. We were very open. Fine, come and look. But we were confident they wouldn’t be able to copy us, because our success was in our culture, not the physical stuff. It was the little things, the snippets, the habits that made up the way we did things.”

“The thing that kills you is inconsistency. It’s like having teenage kids. Teenagers are fantastic at spotting inconsistency. Teenagers are the best at keeping you real. ‘You tell me not to do these things, but you smoke, you drink, you stay out late with your friends... you do it!’ People in organisations are exactly the same. If you say one thing but you do something else, then the organisation will soon say you’re not serious.”

“A lot of so called cultures died a death during this recession. Culture was a very nice thing to do. You’d get nice people in and say ‘let’s do this and that about our company culture’. Then the moment times get hard all those initiatives get scrapped. But we’ve been incredibly consistent throughout in the way we have behaved. We have gone out of our way to make sure our employees are well looked after and that they know what is expected of them and how they should contribute. As a result we have really got them bought in to this company as the place to develop your career. As the Chief Exec I take that really seriously. It’s really important. We measure longevity of service. Ours is second to none for an industry of our type.”

“We did a very detailed piece of research with our staff to ask them what they were looking for in an employer. They told us they were looking for four things: an interesting job, a manager who helped them rather than got in their way, to be treated with trust and respect, and that they were looking for opportunity to get on in the business if they wanted too. We have said those are four things we will deliver to staff who want to work in this business, and we work continually at doing just that.”

“The key to company culture is to do what you say you are going to do. It’s a truism of all business. It’s what your customers like. It’s what your staff like. Do what you say you are going to do. And keep it simple.”

Because culture is of such fundamental importance, as a business leader you should always have a handle on the status and health of your organisation’s culture, not least so you know when to intervene beyond the steady state. In practice though, at least if we are to believe the cohort of business leaders included in this research, the more established techniques for tracking organisational culture get mixed reviews, at best. So our advice therefore is: be wary about simply adopting a simplistic employee survey approach.

“We do lots and lots of employee engagement surveys, but that doesn’t actually answer the question as to how healthy is our culture. I would defy anybody to come up with an employee engagement survey that does.”

“The thing that will most demonstrably measure culture, not in any numerate sense, is the feedback you get from your customers. And I do spend a lot of time talking to


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our customers. If anything tells me what the gulf is between what I think the culture of my company is, and what I want it to be, and what it actually is, it’s talking to a customer, or talking to a supplier about what their experience has been of interacting with us. But it would be very difficult to put a number on that.”

“Two years ago in the United States it was awful out there. I have never known a greater environment of fear around the economic situation, job security et cetera. No one cared about anything except is my company the sort of company that a). is financially robust and b). will look after me? Within six months no one cared about the nice add-ons, whether it was dress-down Friday, or how good the capuccino making machine is. All those things that in 2006 and 2007 were top of the list on any employee satisfaction survey suddenly didn’t matter any longer. All that really mattered was have I got a job? Is my house going to be taken from me? It was just brutal. There has been a huge re-calibration about what matters, and understanding what matters in your culture has undergone a huge re-calibration too.”

“One of the key reasons why we are a successful business is because we have made a cultural journey. Today the customer is in the DNA of the company. How do you test that? Well you can do all the normal things, internal staff surveys and external customer surveys, and we do all that. We can trend results of those things over time. But a better measure is how it feels. You can just feel it. And you hear it and you can touch it. When you go and talk to staff, how many times do they say ‘customer’, how many times do they use the word ‘team’? How much do they know about what’s going on inside the company?”

“You go to a department and you open the door, and you feel it. You feel it when you have it. You feel it when you don’t.”

It is of interest also that conventional approaches to getting change to happen get mixed appreciation too.

“We do a lot of service training. We do a lot of pulse surveys about what people are feeling and what people are experiencing. And in the past we have tried what I would call the ‘force feeding’ approach, which is formal training on ‘this is what we stand for’. I’ve got to say though, I don’t think that is at all productive as an approach. You can’t teach people to be what they feel. You can’t be taught to believe something.”

“We have been doing a lot of listening to our people on how they would like it to be here. We have developed a wide set of values. These need to be hard wired into the organisation, so it is about the way our leaders behave everyday. It is about what they tolerate and what they exhibit. Constantly going at that and being relentless at it is the way we are going to change it. We are not into those big initiatives that you hear about, because they don’t work.”

“We had to do a phenomenal amount of training and development in the past to teach people tools and techniques. We have had to teach people what a team member really is. We have had to teach managers to manage in a very different way. Managers in the old world would say ‘you do this, do this now and this is how many’. Now we have a manager who says ‘what do you think the best way to do this is?’ That is a very different way of managing. But whether as a business we could afford the time and effort and money needed to take that approach now, I don’t


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think so. It’s a good job we did it all when we did, because we’d need to find a different way of doing it now.”

“If you take safety culture as a specific item, and as an example of how to get behaviour change in an organisation, we wouldn’t roll out a safety culture training programme. Training programmes don’t work, and they are never going to. What we look at is how should a responsible leader behave regarding safety, and then we put that into our leadership expectations and communications and leadership programmes. It would not be ‘here is your standalone safety culture course’. We find those things are a one minute wonder.”

These types of observations give weight to the argument that there could be a general failing in the industry that supports change: in that the methods and services it provides are too often somewhat primitive and simplistic, and have not kept pace with current fast evolving basic knowledge. More importantly, they suggest support does not match well enough the needs of modern business and business leaders. The student of business leadership should be advised that the state of the art on organisational culture is still in its infancy. That is a view One Point Three Limited would subscribe to, based not just on this research, but also on our own experience in the marketplace and our success introducing innovation into the way behaviour change is brought about in business organisations.

The bandwidth of the contemporary, pressured executive is limited [not least, he or she is busy having to deal with the other five “c’s” as well!: crises, cash, costs, customers... ...and so on]. As a consequence, the management and leadership of organisational culture, like so much else, is open to hazard from self-referencing, heuristics, and cognitive bias. But it is worth noting that there is a revolution going on right now in our understanding of the way the human mind works and how social groups function. As a result, there is opportunity to challenge much of what has become established as wisdom: to dispel prevailing myths about organisational culture and what you can do about building it and introducing change in it. And because we are dealing with true a business differentiator, there is a competitive edge to be had for those who manage their cultures better.

Strictly financial ‘return on investment’ calculations to justify intervention on company culture are not much called for. Indeed if presented to the seasoned Chief Executive, these might not be believed in any case. The participants in our research nevertheless exhibited clarity, balance and wisdom in how they would typically assess the case for action and expenditure.

“It should be a persuasive argument around the ultimate performance of the firm, reflected either in commercial impact or in reputation terms, or measured by the effect it will have on our employees. It wouldn’t have to be highly numerate and full of pay-back metrics. If it was a compelling argument that you as a trusted colleague of mine made, you would get it through very easily. Ultimately, ultimately the benefit has to be performance. What is the performance footprint? We’re not in this to be nice people or to salute the flag. We’re in this for performance.”

“I will give you an honest answer there. I do think there is a monetary value but how you measure that I have no idea. Maybe my colleagues in HR would have some thoughts and ideas on that. One way would be reduced staff turnover and therefore reduced costs of that. Costs of re-employment. But it is difficult to know if that is employee engagement or a function of the economy or a function of how badly or


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otherwise your competitors are doing. It is really difficult to put a monetary value on culture. I’m certain it does impact the bottom line. I am certain on that. But I could not prove it and I won’t spend time trying to prove it. I just... know.”

“We don’t necessarily put a pound note sign on [our company culture]. We never sit as an executive team or a Board and say that our culture has a good faith value of x, y or z. For us, we place our value more on the outputs of delivering good service. How have we achieved our service goals and targets? Have we delivered our capital programme? And if we see any of these outputs going astray we start to question have we got the right culture or the right team or the right blend of skills in each of the different areas of the business. If we do have a variance, well why is that? And what can we do differently?”

When a need for change is recognised, emergent now is the call for speed. This is consistent with culture being about “the way we do things here”. It is this facet of culture that has most immediate business impact and that brings benefit to performance and in terms of outcome.

An obvious place too to challenge conventional wisdom about organisational culture is on speed. Earlier we cited a recent press article highlighting the six c's. The author of that idea gave his perspective on time scales.

“We put together the recovery plan. The plan was to focus the business, then to start driving it, then to broaden. When you are in focus, and we gave ourselves six months to really get the business going, you are managing six c’s. Start with the cash, then the costs, then the customer, then the concept, culture, then crises. It’s easy to remember. Crises, you’ve got to be ready for them on day one. You’re looking to make a difference on cash-flow to start from about three days. Costs about three weeks. Customer about three months. The concept you can take a bit more time on. Culture takes ages.”

That view on culture is typical...

“We are engaged in a big transformation programme. The need to transform and to look at our cultural change is already understood in the company. We have faced the fact that these things take time. We have bought into a transformation method and with such a big company, moving the oil tanker or whatever analogy you want to use, we have faced facts that it will take a long time.”

“For the last two and a half years we have been been instilling the [new] culture across the Group. We have been reinforcing it at every opportunity through incentives, disincentives, carrot and stick, workshops and behaviour training. We reckon there’s another eighteen months to go. It takes a long time to put a culture into a business, but it’s an necessary enabler to hit our strategic goals.”

“This sounds so easy: to trot this all out. It’s taken us six years to build the culture we have. To understand what we were. To think through what we wanted to become, and what characterised those things and what facilitated that.”

One could conceive that it might suit some agents of change to accept that things will move at glacial pace, perhaps, but not the ambitious business leader, surely? The business case for speeding things up, to make your culture work for you and to get the desired effect faster, is compelling. And the call for speed is growing.


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“When we sit around the management table and we talk about culture, nobody around the table knows how we got what we’ve got, in terms of the culture of the company, not really. It wasn’t deliberate. There doesn’t seem to have been a deliberate management effort over the last two hundred years to build a culture. It’s hard to write down what our culture is on a piece of paper and we haven’t ever put it up on the wall. What happens is people join us because they are interested in what we do. We hire a lot of graduates, for example. People tend to either leave in a couple of years, if they don’t particularly like what they find, or they see better opportunities elsewhere, or they stay with us. If you stay a couple of years with [name of company] you tend to stay your whole career. What we see happening is that people think ‘well, we like these guys here, we’ll stay’ and then they learn from each other and they learn roughly what is the right behaviour and what is the wrong behaviour from each other. That’s a very powerful thing. It hasn’t changed much over the thirty years I’ve been with the company. Different managers and different Chief Executives have either completely ignored it or they’ve done a bit to try to encourage it, but it’s been like that all the way through. The reason we’re trying to study it now is because we’re into a period of significant growth. We know we’re going to take on a lot of new people. We want to make sure that this culture is spread quickly to those new people rather than by the sort of process that has previously taken many years. So we know culture is an important management tool, but we are currently grappling with how to make it happen quickly through a management process rather than through some sort of osmosis.”

“You need to have an inquisitive streak in the way you approach your culture. Because sometimes cultures can be so strong that they always do things the way they did things. And you’ve got to be very careful about that. A strong culture needs to have a component of adaptability. That means you must be able to change it fast when you need it to change. The world changes! So you need a culture that is open minded to changes in wind direction, and that is prepared to adapt, without forsaking core values. Be prepared to be very adaptable.”

“What we want to do in our culture is to be fast and nimble. We want to outmanoeuvre the competition. We have won more business over the last six months in a very difficult market than this business previously won on average in eighteen months. That is just by being customer focused, by having teams interacting with each other, and by speeding up our ability to make decisions. That’s what we want. I would struggle to give you the tangible value of those factors in our culture, but that cultural change is what makes the difference between this business being successful, and continuing to be successful three, four, five years from now, or not being successful. So if you look on the time line, I absolutely think that culture determines your level of success. And it follows that if your culture makes such a difference then when you need to change something about it, or to get it to work for you, you should look at how you can do that quickly as well as sustainably.”

“The Olympics has just happened. Just look at the Olympics. If you actually went behind the Olympic spirit, the Olympics is just a series of events that happen all the time. You see these events, athletics, rowing, riding and whatever on the television all the time. But you create a culture around the Olympics and people buy in to the whole experience. The speed of conversion of those many people who started out as cynics and who then really bought in was remarkable. And it’s no different for a company really, but on a longer term and more sustainable basis. I’m trying to get our people to buy in to the [company] and the customer service it provides. It’s no


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different. Again, like the Olympics, you start winning a few medals and people get on board and start wanting to participate. So although we want to sustain the effect, as far as getting it to happen goes, why shouldn’t we want that to be fast?”

“You can’t create something you’re not. We have a lot of people who have been here for twenty or thirty years. You can’t overnight go and be something different, and say ‘this is now the culture of the company’. You’ve got to stick at what you’re good at and build your culture around what you are good at. You get into the question though of how far can you stretch the brand? Which for me is really a question of how far can you stretch the culture? When you are going to go for something like that, for me, it’s a question of how well and how quickly we can get to where we want to go. And that must mean the speed with which you can get your culture to really work for you in new ways.”

As the introduction of faster change techniques increasing starts to speed up behavioural change, so culture will be placed much more firmly into the same mainstream category as other key aspects of business administration: it will become realistic to tackle behavioural change in the same timeframe for example as intervention on costs, customers, concept. Organisational culture will no longer be an outlier for leadership attention.

“As a large organisation, and we’ve got 50,000 people in the business spread over about 120 countries, the ability to have consistency of culture, and for that culture to be consistent from one employee to another and consistent over time, is a very difficult thing to achieve. The more so as a business grows both organically and, even more so, though acquisition, which we have done. We’ve gone a long way down that route, but the processes you need to make that happen quickly and efficiently are very, very difficult to implement. But that doesn’t mean that you shouldn’t want, or indeed need, to make things happen quickly or efficiently when you want things to change or adapt.”

“We have put in place a strategic plan, and we execute against that. In order to be able to execute we need the culture to move from X to Y. We need that shift to happen at pace. But as for a business case for culture per se, we don’t have that. We have an overall strategic plan, and we measure our achievement against that. But we need the culture to change and continue to change and adapt in order to be successful in executing it. Culture change needs to be within a similar timeframe to the strategic plan.”

“The number one complaint when you go around is: ‘nobody tells me anything’, ‘I don’t know what is going on in this company.’ People are very hungry to understand and feel like they are on the inside of what is going on. We forget but people spend more time doing this than anything else in their life. They want to be good at it, they want to succeed, to be proud. They can only do that if they understand what is going on, if they have information and feel like they are on the inside. I think it is very easy to create culture change if you communicate well. You can get change to happen very quickly.”

“We’re in an industry that has been changing very quickly, and will continue to do so. The points of interaction with the customer have changed, and are evolving all the time. The customer service mentality needs to remain, but the way that plays out needs to adapt just as quickly as the way technology is changing the way our industry works.”


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Practical, hard learned experience has clearly played a very significant role for the business leaders interviewed in our research when it comes to the knowledge they have to pass on about organisational culture. So advice to the aspiring business leader has to be to value, accumulate, and progressively develop your own experience with regard to management and leadership of organisational culture as an essential theme in your career.

In the detail of the conversations our MBA researchers had with the participants in this research there are so many nuggets of information. But there is no one magic bullet nestling there that will resolve all the behavioural stuff for you. The essential differentiating nature of your organisation’s culture means that the management and leadership of “the way we do things here” will always be a do-it-yourself, self-help game that you must learn to play and then play well.

That last comment does not mean that you should not seek support and advice from outside. It does mean however that you would be well advised to call on help that is well informed and up-to-date, fashioned precisely for you and geared specifically towards you helping yourselves, uniquely well.

The automatic assumption that culture change takes ages is losing its currency and is no longer valid in any case. Contemporary knowledge about social group behaviours permits us to challenge that notion. This puts culture into play much more effectively as a tool to use to improve your business prospects. Calls for change management at greater speed are gathering pace, and the implications are far reaching.

So here is our final tip to you, the aspiring business leader, and to you the seasoned individual too: ask for fast. To do so is not just a question of being professionally unreasonable. It is realistic, practical and desirable. There is no longer a question of whether you should pay attention to building and shaping the culture of your organisation. It is now about how fast you can get to the desired effect and then how efficiently you can make it stick.


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What the business leader said to the MBA organisations, manage total revenues in excess of US$ 740...

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