IN PARTNERSHIP WITH

Cultural Transformation Accelerate organisational change to drive sustainable results

AN EXCLUSIVE EVENT BY

Munich Executive Summary

IntroductionGiven the rapid and unpredictable pace of change facing

organisations today, most find themselves in need of

transforming their cultures. And many are struggling to get it

right. Organisations seeking to adapt and grow in a disruptive

world cannot force change through purely technical

approaches such as restructuring and re-engineering. Neither

can culture simply be told to change through top down

messaging.

How to steer your organisation through its cultural

transformation journey was the focus of the Center for

Creative Leadership Roundtable Meeting in partnership with

CorporateLeaders. Held in Munich, the meeting began with

keynote speeches from Joel Casse, Global Head of Executive

& Leadership Development at Nokia, and David Altman,

Executive Vice President and Managing Director (2016) at

the Center for Creative Leadership (CCL) EMEA. It was also an

opportunity to share knowledge and best practices between

executives from some of Europe’s biggest multinational

companies. An intimate roundtable meeting saw executives

share their successes, outline their challenges, and underline

the learnings from their cultural transformation journeys.

Sharing the future

Joel Casse, Global Head of Executive & Leadership Development at Nokia, outlined how Nokia’s business had transformed since selling its mobile device business to Microsoft in 2013. If you download Netflix or stream your Music from Apple, you will likely be using Nokia technology along the way, he said: “that’s what we are doing now. We are enabling society as we know it to be able to download information, music, movies and to stay connected.”

Company-wide change efforts are

12.4 times more likely to be successful when senior managers communicate continually.*

The pace of digital change is also having an impact on Nokia’s leadership and management culture. “It used to be that leaders were leaders because of their age, because of their seniority, and then it used to be because of their knowledge, because they had the data,” he said. “But nowadays, things have fundamentally changed. Employees don’t want to be told what to do. They want to be listened to and they want to have impact.”

Living in a world of social networking and online information, the relationship between employees and their employer is changing fast. “For instance, Twitter and Facebook are all about followship and sharing. You recommend, you can raise a flag or a hand or thumbs-up. What we’re seeing is that consumers alike, employees alike, want to contribute. They have the power; they have the information but they can now contribute to whatever they want to. This has an implication for leadership as well.”

Legacy leaders and managers, which even includes those with 15-plus years of experience, said Casse, still want to “contain and minimise uncertainty. They want to have a checklist of processes to control, and they want to have all the data so that they have all the knowledge.” However, the days are numbered for those kind of leaders, because they “will not create the followship or new leaders that we need. What we’re trying to get is more followship. Because technology is enabling people to have information. They want to be involved and they can be involved.”

Casse gave some examples of how he is helping to drive these changes at Nokia. First, rather than top leaders simply disseminating a strategy from the top to their teams, they are encouraged to share the strategic vision with their teams, and then brainstorm together ways that the strategy could be implemented: “It is a learning opportunity with leaders who are listening, rather than telling. The emphasis is ‘we share the future’.”

Rather than the death of an old business model, constant reinvention has always been the Nokia way: “we have reinvented ourselves a lot. Way back in 1871 we started off as a wood mill, then we went into paper mill, then believe it or not, we went into rubber boots, rubber tyres, then into the telecommunication sector, first through radios and then wireless.” Following a period of being the mobile phones market leader, Nokia has now reinvented itself again with over 100,000 employees working in wireless connectivity, virtual reality and digital health: “disruptive technology” as Casse described it.

* McKinsey - Survey April 2015: How to beat the transformation odds.

Nokia have also introduced a “one-in-90” concept where leaders have to meet with each of their direct reports for one hour every 90 days to “not talk about business, but talk about the person, relationships, development, feedback. “We’re trying to hardwire the new way of leading, supporting and challenging.”

Companies that are overly focussed on results and execution, argued Casse, create a culture where “no one dares to speak up when they have an idea that’s going against the grain. Or when they’re lost or confused and they want a challenge, no one dares to speak up because there isn’t that kind of level of psychological safety or trust. People just put their head down, just carry on and do the execution, even if it’s the wrong thing to do.”

Companies that are overly focussed on results and execution create a culture where no one dares to speak up when they have an idea that’s going against the grain, because there isn’t that kind of level of psychological safety or trust.

“At Nokia, rather than top leaders simply disseminating a strategy from the top to their teams, they are encouraged to share the strategic vision with their teams, and then brainstorm together ways that the strategy could be implemented. The emphasis is ‘we share the future’.”

The ease of implementing change and the best approach for engaging the network in change largely depend on

the match between the type of change and the network structure.*

* CCL Whitepaper - Analytics for Change

These are the worst type – they just sit there. They’re taking advantage of other people. Successful organisations are the ones filled with owners.”

This in turn ensures against bystander apathy. “There are many stories and research about the bystander apathy effect. The more people there are around, the less likely there are people to take action. This might be one reason why no one went to help the rickshaw driver in Delhi, because there were thousands of people around who thought, ‘someone else will take care of it’.”

Too many of us work in organisations or in teams where the attitude is, “someone else will take care of it? It’s not my job. Well, if everybody’s saying, somebody else will do it – nobody takes action.”

Within corporate organisations, the bystander effect is largely driven by “a fear of bad consequences - a fear that relationships would be hurt. You don’t take action because not only might it hurt you if you took action, but it could hurt relationships with other people. What we as leaders need to do is to encourage people to intervene, even if it’s not in their job description. If they see something going on – stand up. Say something.”

“Within corporate organisations, the bystander effect is largely driven by a fear of bad consequences. What we as leaders need to do is to encourage people to intervene, even if it’s not in their job description.”

The danger of being a by-stander

The damage caused by cultures where people keep their head down was also central to the presentation of David Altman, Executive Vice President and Managing Director (2016) at the Center for Creative Leadership (CCL) EMEA. He shared a shocking story of an incident that happened in Delhi in August 2016. A rickshaw driver named Matibool was a victim of a hit-and-run. “While lying in the gutter for 30 minutes, severely injured and bleeding, he was ignored by hundreds of cars, rickshaws, cyclists, pedestrians and a police emergency vehicle. One rickshaw puller stole his phone. A friend alerted the police but it took 40 minutes to reach Matibool who died on the way to the hospital.” It is an extreme story, said Altman, but it has a lot to tell us about the psychology of responsibility and apathy.

“How can it be that people sit on the side-lines like this? Culture is what affects the motivation of the people that work in the organisation, so what are those processes and activities that we as leaders engage in to increase the motivation? Because at the end of the day, if we have a motivated, engaged workforce, capabilities are going to increase. So, link culture now to motivation.”

Successful organisations are the ones filled with owners.

Any organisation can be divided into ‘owners, renters and squatters’, said Altman. “We want organisations where people feel a sense of ownership. You act as you would do at home, you care about every detail of the organisation. Then there are renters in our organisation: I’m just here to get a pay cheque, get a pension, I’ll do my job. And there are squatters.

“Culture is what affects the motivation of the people that work in the organisation.”*

* David Altman, EVP and Managing Director (2016), Center for Creative Leadership (CCL) EMEA

Building authentic cultures and values

The chance for the assembled executives in the room to share their own experiences revealed a fascinating set of stories. One of the executives explained that “our aspiration is to be an ownership culture, but I think where we are today is rather still more a process and results-focused culture”. The business is therefore saying one thing but doing the opposite. Her own analysis of teams within the business has uncovered people who “are really good in executing what they do, are very efficient, but are not good on creative ideas.” However when this information is brought to managers’ attention, too often they are happy with the findings and keep the team unchanged: “Even if we hear, ‘I want to think out of the box’ and so on, in the end it’s not what they want. I hope we get there, but it’s a massive change.”

Another executive described the culture of her organisation as being at the other end of the spectrum – creative ideas are encouraged to such an extent that the culture gives you enough rope that you have the opportunity to climb Kilimanjaro. At the same time, you can also struggle and hang yourself. “This is how I experience it. Our intention is currently to innovate and grow our business to create a culture which is inclusive, leveraging the beauty of the diversity of thinking, and which also transforms the organisation and not only the leaders but also each and every employee, into a growth mind-set, into a learning organisation.”

The ideas and solutions offered in the room as to how to achieve this, centred on ownership, empowerment and business alignment. Culture transformation should “enable the business strategy,” said one executive. “You really need to make that business connection. Not just be fluffy, but to really paint it in the context of the business and what is needed.”

Culture transformation should enable the business strategy.

This, said another delegate, comes down to “having influencers in the organisation to carry the torch for the culture deep into the organisation. What kind of values do you think would drive that kind of intrinsic culture? What are some of the key values that should link to the cultural transformation and help to drive the business?”

In a sense, authentic cultures are the ones that “really walk the talk,” said one senior leader in the room. “What we are trying to do is to be a transparent, learning organisation. It’s not saying one thing and doing something different. It’s really living it.”

There remains, therefore, an important role for values. Casse informed that when Nokia started out on its latest cultural journey, “we anchored it with the values as the very first thing we did. Everything that we’ve done has been based on that: our leadership framework, our expectations, the expected behaviors. It is values that have renewed and anchored the culture to get behaviours consistent with those that are repeatable, visible, that you identify as a culture of Nokia – to be transparent, a learning organisation, innovative, whatever the aspirations are, there has to be a core set of anchoring values.”

When senior leaders role model the behaviour changes they’re asking employees to make, transformations are

5.3 times more likely to be successful.*

“Our intention is currently to innovate and grow our business to create a culture which is inclusive, leveraging the beauty of the diversity of thinking, and which also transforms the organisation, into a growth mind-set, into a learning organisation.”

* McKinsey - Survey April 2015 : How to beat the transformation odds

Bridging the cultural divide

The roundtable meeting highlights just how difficult cultural transformation can be, and also how integral it is to business success. There is currently a potential for the divide between older leaders and a young workforce to become a chasm. A unifying culture offers to not only build a bridge between the two, but to fill in the gap completely. Top down leadership is being fundamentally challenged by this new paradigm. “Now young people or anybody can have the answers,” said Casse. “It used to be that information was top down; that’s far, far too slow. Top-down communication cannot happen, cannot exist now. We need things to go much faster. The areas where leaders are falling short in terms of skill and in terms of importance are around people development, innovation management, strategic agility, management vision and purpose.”

The best way to do this, as one executive put it during the roundtable discussion, is to “share success stories and then also allow people to share their mistakes. That gives the company really some more strength than if you’re fired because you’ve made a mistake. That’s psychological safety, and that comes down to trust and openness.” Constant communication is more easily done across flattened hierarchies than it is shouted down from ivory towers.

Conclusion

“The areas where leaders are falling short in terms of skill and in terms of importance are around people development, innovation management, strategic agility, management vision and purpose.”

Center for Creative Leadership ccl.emea@ccl.org - +32 2 679 09 10

www.ccl.org

Partner

The Center for Creative Leadership, a top-ranked global provider of executive education, offers what no one else can: an exclusive focus on leadership education, research and unparalleled expertise in solving the leadership challenges of individuals and organizations everywhere. For over 45 years (25 years in EMEA), we’ve equipped clients around the world with the skills and insight to achieve more than they thought possible through an array of leadership programs, customized products, digital learning, Coaching, Assessment, Tools and Support with nearly 750 faculty and an associate network of 1,000 members in North America, Europe, The Middle East, Africa and Asia. CCL® has consistently been ranked as one of the top 10 providers of leadership solutions by the Financial Times and Bloomberg. For the third year in a row, CCL ranks No. 4 overall in the Financial Times worldwide survey of executive education

CCL is redefining the field of leader development beyond individuals to embrace the leadership development for you, your business and the world that together set direction, obtain alignment and commit to imperious change results. CCL believes that organisations need to bring leadership development and capability to the next level of maturity while implementing strategic imperatives. Organizations who can successfully navigate these turbulent waters will be success in managing complex changes they face.

For more information visit www.ccl.org

CorporateLeaders is an exclusive independent network that inspires business and leadership by providing a trusted forum for executives to network, exchange ideas, share lessons learned and drive business forward in an ever changing environment.

We focus on providing exclusive member and partner services, intimate and content rich networking events, research, thought leadership, content marketing, and advice on leadership development with the executive needs and experiences at its core.

For more information visit www.corporate-leaders.com

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