extreme makeover: transforming your company culture

EXTREME MAKEOVERT R A N S F O R M I N G Your Company’s

Culture!

Welcome to EXTREME MAKEOVER:

Transforming Your Company’s Culture

Rick Lepsinger, Presidentrlepsinger@OnPointConsultingLLC.com | 212.472.8081

—Frances Frei and Anne Morriss, Harvard Business Review

Culture tells us what to do when the CEO isn’t in the room, which, of course, is most of the time.

OBJECTIVES● Understand why company culture

is important ● Learn what factors contribute to

culture● Learn how to lead cultural change● Understand how to ensure change

lasts

OUR EXPERIENCE

WHAT CULTURE IS

A set of sharedattitudes, values, goalsand practices that

characterizes an organization

WHAT CULTURE IS

A way of thinking,behaving

or working

WHAT CULTURE IS

Culture is not an intangible concept that is difficult to define and communicate—it is concrete and

measurable

WHAT CULTURE IS

Company culture is known by observing an organization’s work

processes and systemsas well as the behavior of

leaders at all levels

Why Company Culture is Important

1.Nearly 45% of Millennials say they

are planning to look for a new jobin the next year.

Research shows a disconnect between what these employees expect—better work-life balance, recognition, loyalty and respect—and what employers actually provide. Source: Aon Hewitt, 2015 employee engagement study

HIRING

Employees are more likely to stay when they feel fulfilled, decreasing the costs of recruiting, hiring and training.

Estimated cost of replacing an entry-level employee: 40% of salary

Estimated cost of replacing a senior-level employee: 400% of salary

Source: ERE Media

2. RETENTION

Unhappy workers cost U.S. businesses $450 billion-$550 billion in lost productivity each year, according to a 2014 Gallup State of the American Workplace report

3. PRODUCTIVITY

What Factors Contribute to Organizational Culture

1.Employees know the company’s

mission and key values and relyon them when making important decisions.

CLARITY

JET BLUE MISSION STATEMENTUp for good: “In the air and on the ground, we’re committed to bettering the lives of our customers, crewmembers and communities—and inspiring others to do the same.”

2.The mission and key values are

translated into specific behaviors and reinforced by organizational systems.

COMMUNICATION

THE ZAPPOS CULTURE BOOKZappos employees write a culture book every year describing how they feel about working there and how they reinforce the company’s 10 core values every day.

The book is given to anyone who tours the company.

3.The company’s leaders

reinforce mission and key values at every opportunity, both in words and actions.

REINFORCEMENT

4.Leadership addresses

policies or behaviors that do not fit with the mission or key values.

CONSISTENCY

NOT A FIT?WE’LL PAY YOU TO QUITNew employees at Zappos are offered $2,000 to quit after the first week of training if they decide the job isn’t for them.

-Simon Sinek, author

Customers will never love a company until the employees love it first.

LEADING COMPANY CULTURE

Know What You’re Up Against

70% of change initiatives fail, research from John Kotter found in 1995. More than 20 years later, the statistic remains true.

It’s not because employees don’t want to change. They’re just not ready—and it’s the leader’s job to get them there.

1.Define the Ideal Future State

Clarify or reaffirm the mission and vision

Ensure this picture of the future is shared by employees at all levels of the

organization

2. Identify Critical Success Factors

With this outcome in mind ask, “What are the behaviors

and competencies that will ensure we achieve this

outcome?”

3. Shape BehaviorCommunicating expectations is an important step

but it is not the only step

The old behaviors must be replaced with the new!

The primary responsibility of facilitating change in behavior is the managers, and managers have 3

tools to help “shape behavior”

Coaching and feedback. People need to know when they are on track and what areas need improvement. They are also likely to need guidance to help transition to the new behaviors.

Recognition and rewards. Help reinforce positive behavior change. It sends the message, “That’s what good looks like,” and “You can do it.”

Consequences. Just as there needs to be rewards to reinforce using the new behaviors, there also need to be consequences to discourage the use of old behaviors.

3 TOOLS TO SHAPE BEHAVIOR

4. Align Systems and Processes

Change in individual behavior is important but not sufficient

Use systems and work processes to communicate and encourage the desired

behaviors across the organization

Five critical questions leaders must be able to answer.

TAKING THE UNCERTAINTY OUT OF CHANGE

What do we want to accomplish and why is it important?

Why Is This Change Necessary?

1.

Determine how each person or department fits into the bigger picture … translate goals into behaviors.

What Will Each Person Be Expected to Do?

2.

Do we have the funding, resources and time? If not, what can we do to reallocate?Am I competent to make this change?

Will We Be Able to Do It?3.

What are the key milestones? What challenges do we expect, and how will we address them?

How Will We Manage the Transition?4.

Provide frequent updates through a shared project schedule.

Where Are We In the Process?5.

Employee statements that reflect positive reasons for supporting the change

ENCOURAGE CHANGE TALK!

● Explore importance and confidence

● Conduct a pro/con analysis

● Press for specifics

● Reinforce positive change statements

EXPLORE IMPORTANCE & CONFIDENCE!

● Ask, “How important do you think making this change is, on a scale from 1 to 10?”

● Respond by asking, “Why is it not lower?”

● Ask, “How confident are you in your ability to make this change, on a scale from 1 to 10?”

● Respond by asking, “Why is it not higher?” and then build confidence

PRO/CON ANALYSIS

1.

ENSURING CULTURAL CHANGE

ADJUST SYSTEMS & WORK PROCESSES

Systems and work processes ensure the use of new behaviors gets to “critical mass”

They outline how people should work with internal and external stakeholders—they provide guidelines in which the new behaviors are applied

They institutionalize the behavior and ensure the change moves beyond a few individuals scattered around the organization

2.

DOCUMENT THE CULTURE

Update internal & external mission documents

Encourage employees to get involved in promoting culture (for example, Motley Fool Culture Blog)

ENSURING CULTURAL CHANGE

3.

HIRE FOR CULTURAL FIT

Update job descriptions

Use behavioral-based interviews that focus on critical competencies

Ask open-ended questions that reveal how candidates deal with uncertainty and solve problems

Give employees an opportunity to interact with candidates

ENSURING CULTURAL CHANGE

THANK YOU!Questions?

Feel free to let us know.www.OnPointConsultingLLC.com | 203.533.5128