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Cultural Alignment

Strategic change often requires changing a company's culture, either bringing back the values that originally grew the company or empowering emerging values. Because it is extremely hard to see the values needed for a strategy to succeed, companies tend to endorse bland, industry-wide value statements and bring undifferentiated exercises to install practices that support their values.

Our approach, based on twenty years experience and the philosophical work of Dr. Charles Spinosa and Professor Hubert Dreyfus, emphasizes identifying new values that innovators in your own company are starting to act on. We then identify the core practices that go with these values, and make them recurrent. Culture includes many things, but the two crucial levers for culture change are the values people honor and the practices they share for maintaining those values.

Why are values critical today? No supervisor can monitor knowledge workers at all times. No business design can ensure that knowledge workers face the same critical situations day in and day out. The only thing that coordinates action when opportunities arise are shared values. High performance companies need specific, differentiated values to win.

We work with executive teams to articulate needed cultural changes and then identify and modify the core practices that will result in real change. For a company trapped with a culture of stars—all competing against each other—we shifted the focus of executive meetings from offering "dissertations" to making requests and promises to each other. The result was a team-centered culture where results increased as collaboration increased. For a company seeking to move to a project management culture from an engineering one, we instituted design freezes across engineering disciplines and set the project manager up as a reviewer. The result was a shift in focus from individual components to the success of the overall project.

The table below shows some examples of key practices that were instrumental in producing cultural shifts and an estimate of the value of the shift, based on increased revenue, reduced losses, or increased share price.

Industry Old Culture New Culture Key New Practice Value Estimate
Merchant Banking Entrepreneurial Professional Growth Monthly review of all of a client's transactions $10s of Millions
Plant Delivery Engineering Project Management Project Managers comment on designs during design freezes $100s of Millions
Cellular Communications Product-focused Customer-focused Weekly question: Why should the customer
marry us?
$100s of Millions
Biotech Star-centered Team-centered Replaced delivering dissertations with making commitments $10s of Millions
Commodity Supplier Managing Access Customer-focused Sales Representatives form small clubs of customers for shared credit $10s of Millions

 

“In 2002, we embarked on a new, innovative strategy to reduce the costs of producing hydro plants. The strategy required a major change of our company, in processes, tools, and even culture. Chris Davis and his team led the work for changing processes and culture. Over the next year, Chris and Charles Follett led teams involving experts from all our major global centers to design the most efficient, customer-centric processes in the industry—all based on networks of interconnected commitments. They trained our experts to mobilize these new processes and to introduce a commitment-based style of work. The results of our strategic initiative have been outstanding."

—Hubert Lienhard
President
Voith Siemens Hydro





For Additional Reading–
Read more about key concepts of Cultural Alignment:


—Spinosa, C.,
Flores, F.,
and Dreyfus, H.L.
(1997)


Disclosing New Worlds: Entrepreneuship, Democratic Action, and the Cultivation of Solidarity

© 2007 The Stratam Group