knowing what to change is the hard part of culture

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G00276737

Knowing What to Change Is the Hard Part ofCulture ChangePublished: 17 April 2015

Analyst(s): Leigh McMullen, Bard Papegaaij, Patrick Meehan, Ansgar Schulte

For CIOs tackling culture change, knowing what to change is often harderthan executing the changes itself.

Key Findings■ IT culture is determined by four main working styles, which in turn influence four primary

aspects of organizational culture.

■ Failure to understand the key drivers of culture and their attributes, and to make informedchoices during transformations are the main reasons for culture issues in transformations.

■ Culture clashes happen because leadership lets them happen; don't let personal preferencedictate working styles that strongly influence culture.

■ Culture change is a process of carefully choosing the desired attributes and behaviors of thefuture culture and then consistently encouraging and supporting them over a period of time.

Recommendations■ Do not define decision rights, measurement strategies, engagement methods and work styles

based solely on personal preference, or past experience. Pick the styles that will have thegreatest impact on business outcomes/mission success.

■ Don't look for a single "best" culture: Cultural attributes need to fit the nature of the challengesfaced and the outcomes desired.

■ Make sure everybody understands the choices you made and why.

■ Incorporate your chosen cultural attributes and behaviors in everybody's personal brand.

Table of Contents

Analysis..................................................................................................................................................2

Cultures Are Easy to Change and Easy to Break...............................................................................2



Organizational Culture Has Four Key Attributes...........................................................................4

Understand the Attributes of Culture to Build the Culture You Want............................................ 5

Understanding Management Style and Its Impact on Culture....................................................13

Conclusion............................................................................................................................... 15

Gartner Recommended Reading.......................................................................................................... 15

List of Tables

Table 1. Decision-Making Styles............................................................................................................. 7

Table 2. Measurement Styles..................................................................................................................9

Table 3. Engagement Styles................................................................................................................. 11

Table 4. Working Styles........................................................................................................................ 13

Table 5. Cultural Attributes and Their Effects on Management Style......................................................14

List of Figures

Figure 1. Key Attributes of Culture.......................................................................................................... 4

Figure 2. Impact of Decision-Making Styles on IT Culture........................................................................6

Figure 3. Impact of Measurement Styles on IT Culture ........................................................................... 8

Figure 4. Impact of Employee Engagement Styles on IT Culture........................................................... 10

Figure 5. Impact of Working Styles on IT Culture...................................................................................12

Analysis

Cultures Are Easy to Change and Easy to Break

As we discussed in "Culture Change Is Easier Than You Think," people are wired to adapt theirprofessional or casual social behaviors to the contexts they're in. Since culture is really just a set ofdefault organizational behaviors, this makes changing culture easier than is often assumed. Assuch, it is incumbent on CIOs to explicitly set those behaviors that will lead to success in the future.All too often, however, the reasons and opportunities for culture change, such as a largetransformation, merger or acquisition, are squandered because CIOs are focused on returning thebusiness results required of the transformation and not on changing people's behaviors. This resultsin people reverting back to their default behaviors and culture clashes. Imagine:

A small Midwestern U.S. publishing company buys another such company in Denmark. The twopublishers have very different creative styles. In the acquired company, ideas for stories are put upon a wall, and the editors and creative staff engage in a "survivalist" approach, poking holes andtearing ideas down until only the fittest remain. In the acquiring company, the process is different.

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Ideas are still put up on the wall, but the team uses an "evolutionary" approach, where they try tobuild each idea up until the best float to the top.

Which is best: survivalist or evolutionary? It is difficult to tell, since both companies are successful.Some leaders may argue that the different approaches are really just factors of differences betweenthe underlying Midwestern U.S. and Denmark cultures. That may also be true, but it should not bean excuse not to act. The one thing that we can determine for certain in the case above is that, ifour aim is to truly integrate the organizations, both creative processes cannot exist simultaneously.

The answer may be merging the best of the two processes, for example: using the survivalistapproach early in the process to narrow ideas to the best ones, and then applying the evolutionaryapproach to ensure that everyone has contributed and is bought into the ideas that remain. Or itcould simply be just picking one of them and moving on. What we cannot do is expect things willjust sort themselves out. We have to have the courage to make explicit changes to the way we dothings around here to get the culture we want. This is the hard part of culture change — knowingwhat to change.

A Word on the Word "Customer"

Using the word "customer" to describe the consumer of IT services has fallen out offashion because people believed that it created a master/servant relationship betweenIT and the rest of the enterprise. The authors would submit that, when speaking aboutthe customer experience, everyone is a customer. Organizations that are world famousfor their customer experience are also regarded as some of the best places to work.Why? Because they understand that, unless associates care for and treat each otherexceptionally well, they won't treat their customers exceptionally well.

For the remainder of this document, the word "customer" means everyone — inside oroutside of IT. The phrase "customer experience" means everyone's experience.

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Organizational Culture Has Four Key Attributes

Figure 1. Key Attributes of Culture

Source: Gartner (April 2015)

When we think of organizational culture, just trying to fix what we can and should change can beoverwhelming. However, by selecting a single anchor point, the customer experience (as werecommend in "Culture Change Is Easier Than You Think") making this decision becomes easier. Weneed but ask ourselves, which part of our culture most effects the customer experience, and ourchoices will become much clearer. Figure 1 describes the attributes of organizational culture thatmost affect the customer experience.

■ "How we make decisions" speaks to the general leadership style of IT and generally affects theoverall responsiveness or tempo of the culture.

■ "How we engage" focuses on how employees collaborate internally and with externalstakeholders, which affects the employee experience.

■ "How we measure" focuses on IT metrics and measurements and how they affect the overallfocus or direction of the IT culture.

■ "How we work" looks at the working style of IT and how IT learns, experiments or develops itssolutions for the business.




Understanding these four attributes and their characteristics helps CIOs make informed choiceswhen trying to change culture.

Understand the Attributes of Culture to Build the Culture You Want

Note: The descriptions below do not imply that there is "one best" culture or attribute that isdesirable for all organizations. Some of the language used to describe these attributes may evokenegative connotations (such as "stifles individual initiative") — they are not intended to. There areany number of organizational contexts where (in this example) stifling individual initiative may bedesirable (such as process manufacturing).

How You Make Decisions Determines Your Tempo

How organizations make decisions often has a greater impact on culture than the kinds of decisionsthe organization regularly makes. Decision styles most greatly affect the "tempo" aspect ofenterprise culture. Tempo is not just the "speed" of the organization, but also reflects its agility,ability to change direction and overall operational cadence.

Figure 2 and Table 1 break decision-making styles into four quadrants.




Figure 2. Impact of Decision-Making Styles on IT Culture





Table 1. Decision-Making Styles

Style Definition Positive Effect On Negative Effect On

Authoritarian Decision rights held by an individual withcascading rights distributed in a hierarchalmanner

AccountabilityMeasurabilityStrategic focusTactical focus

Individual initiativeReaction timeConsistencyDecision latency

Leader of One Decision rights held by the person best able tomake the decision in a given context

Individual initiativeGroup AccountabilityDecision latencyIndividual accountabilityCreativity

ConsistencyMeasurabilityQualityStrategic focus

Bureaucratic Decision rights centralized, usually intopredefined processes

ConsistencyMeasurabilityResilienceTactical focus

InitiativeReadiness for changeAccountability

Collective Decisions are made by consensus of the group Group accountabilityReaction timeSustainabilityInnovation

Strategic focusTactical focusReaction timeDecision latency


In general, organizations with a high degree of personal empowerment (regardless of thecentralization of that power) and corresponding decision-making styles (authoritarian or leader-of-one) are highly responsive. Such organizations are typically good at executing predeterminedchange, but their ability to identify needs or exploit opportunities for change depends on the degreeof centralization. That is, those with more decentralized decision making will sense changes fasterdue to more "eyes on the problem." Decentralization of authority, however, comes at a cost.Organizations with highly decentralized decision making styles often struggle to act as "onecompany."

Note: The characteristics in these charts are not absolute. For example, in Table 1, we note that theleader of one decision-making style can have a negative impact on strategic focus. This does notmean that organizations that select this style are sacrificing strategy. Instead, it suggests thatorganizations that select this style must "double down" on strategy to ensure that the strategic focusis maintained and that, even with distributed decision making, employees can still act as onecompany.

What You Measure Determines Your Direction

Measurement has one of the single greatest impacts on organizational culture. Your measurementsboth explicitly and implicitly inform the decisions people make. One can think of measurements asessentially "premade" decisions. If, in a cultural sense, decision rights determine the tempo and




speed of an organization, measurements determine the direction. Consider the following: Oneorganization measures service availability, whereas another measures service recoverability — bothmeasures are fundamentally similar in the context of business outcome (that a given service isavailable), but they are very different in implication. One implies managing risk, while the otherimplies problem solving. How would measuring one versus the other affect architecture, technicaldecisions and organizational culture?

Figure 3 and Table 2 break measurement styles into four quadrants.

Figure 3. Impact of Measurement Styles on IT Culture





Table 2. Measurement Styles

Style Definition Positive Impact On Negative ImpactOn

Just Do Things Measures accomplishments (notnecessarily business aligned)

Urgent issue resolutionTactical results

Strategic focusQualityResiliency

Do BetterThings

Measures business impact ofactivities

Strategic focusInnovationBusiness outcomesAdaptability to changing businesspriorities

QualityResiliency

Don't Do WrongThings

Measurements focus on riskavoidance

ConsistencyQualityResiliency

AgilityInnovation

Do Things Well Measures business processimprovement

Strategic accomplishmentsMeasurability against businessoutcomes

Tactical resultsAgility


How You Engage Affects Your Collaboration

Engagement styles are how problems are solved and how solutions are developed, as well as howpeople interact with one another during the course of work. As a kind of shorthand, we describe thisas how answers or solutions are found. Engagement affects culture in the context of overallcustomer experience where, again, "customer" is anyone inside or outside of IT. Engagement is alsoone of the dimensions of culture that may be different between groups within IT depending on theirmissions. For example, co-creating, which requires a lot of involvement and two-waycommunication, is often desirable in agile development shops, but it would be cumbersome in thesame IT department's desktop support area. It is recommended (as with other dimensions of culturewhere vibrant subcultures may exist) that the organization as a whole adopt a unified engagementculture, and then have explicit subcultures defined for different areas as needed.

Figure 4 and Table 3 break engagement styles into four quadrants.




Figure 4. Impact of Employee Engagement Styles on IT Culture





Table 3. Engagement Styles

Style Definition Positive Impact On Negative Impact On

Selling Solutions or answers are explainedand people motivated towardthose goals

Clarity and understanding ofpurposeBuy-inStrategic focus

AgilityDecision latency

Co-creating

Solutions or answers are createdcollaboratively

Personal commitment orengagementConsensusTime to develop the solutionInnovation

Ability to change thesolution after finalizationStrategic focus

Telling Answers or solutions are simplytoldPeople given marching orders

ClaritySustainabilityStrategic focus

Buy-inEngagementTime to develop thesolution

Testing Answers or solutions are derivedby testing possibilities scientifically

ConsensusTime to develop the solutionQuality

Personal commitmentCreativity


How You Work Determines Your Approach to Value Delivery

While working styles seem to be a result of cultural decisions in the other dimensions, CIOs canexert control in this dimension specifically by how they plan their projects or solutions. Plans thatare more iterative or experimental enforce one set of cultural behaviors; those that are more linearand progressive drive other behaviors. This is important because working styles ultimatelydetermine the quality of business outcomes that IT delivers. A highly risk-averse working style willresult in very reliable outcomes, but may suffer from a lack of innovation and may lag behindindustry leaders. A very experimental working style may drive considerable innovation, but at risk tobusiness continuity and the brand. Different IT projects or contexts may certainly require differentplanning approaches, and having built an organizational architecture around one core planning/working style doesn't preclude the use of other working styles where needed.

Figure 5 and Table 4 break working styles into four quadrants.




Figure 5. Impact of Working Styles on IT Culture





Table 4. Working Styles

Style Definition Positive Impact On Negative Impact On

Iterate Projects are planned with a specified endstate that is achieved through iterationsof learning

EngagementIncremental improvementTransition state qualityRisk

PredictabilityCostInnovation

Experiment Projects are explored though a series ofexperiments, toward an end-statehypothesis

Breakthrough innovationEngagementCreativityAgility

RiskTransition state qualityand reliabilityPredictabilityCost

Plan andExecute

Plans are developed and executed withonly major events causing plan deviationLearning is entirely upfront

PredictabilityTransition state reliabilityResilience

Innovation learningEngagementAgility

Plan and Adjust Plans are developed upfront with plannedopportunities to revisit and incorporatelearning

PredictabilityTransition state quality andreliabilityCost

AgilityInnovation


Understanding Management Style and Its Impact on Culture

As CIOs start to "turn dials" to increase different attributes of culture, this will necessitate changingsome of the underlying fabric or management philosophy of the organization. For example: High-tempo originations can't operate without a higher degree of personal empowerment. So if we wantto increase operational cadence, we need to increase empowerment and accountability whiledecreasing focus on risk and a multitude of measurements.

Table 5 reflects the management style changes that will be needed to achieve given culturaloutcomes.




Table 5. Cultural Attributes and Their Effects on Management Style

Tempo Direction Collaboration Value

Personal Empowerment

Accountability

Risk Aversion

Engagement

Process/Metrics Focus


The arrows in these charts don't suggest good or bad; rather, they show a positive or negativeeffect on several characteristics directly associated with the four attributes of culture describedpreviously. This does not suggest that increasing them should always be the goal. Each attribute isdetermined by a number of trade-offs that need to be considered. The demands and challengesposed by the organization's goals, tasks and environment determine what the optimal trade-off isfor each of the attributes.

Some organizations benefit from the more deliberate pace of lowering an attribute (for example,chemical manufacturing demands a lower tempo).

As organizations increase tempo:

■ They will require higher personal empowerment and increased personal accountability.

■ They will see a decrease in risk aversion.

■ Engagement can go either up or down (for example: in very high-tempo, very mission-criticalorganizations, people can become disengaged as the mission takes over).

■ Organizations have fewer high-impact measures, and focus on repeatable processes will godown.

As organizations increase their directedness:

■ Personal accountability and measurement against direction need to increase.




■ Risk aversion will tend to increase as willingness to stray from the core mission erodes. Numberand degree of measurements (which are a surrogate for decision making) will also increase.

As organizations increase collaboration:

■ Personal empowerment can go up or down — highly collaborative organizations can become"group think" bureaucracies or autonomous creative cells.

■ Risk aversion will decrease because of group participation in decision making.

■ Engagement will increase.

As organizations increase the focus on delivering value:

■ Personal empowerment and accountability will increase as each worker is aware of andresponsible for value.

■ Risk aversion can go either way and is largely dependent on the risks associated with valuecreation.

■ Process and metrics focus can go either way depending on the need for measurement in valuecreation.

Conclusion

For CIOs, the hard part of change is often determining what to change. Traditional approaches toorganizational change focus on process, metrics and organizational structure. These are laggingindicators to behavior, and such changes often fail to result in the desired behavioral changes.Instead, CIOs should take a hard look at decision making, engagement, measurement and workingstyles as the sources of organizational behavior and focus their change efforts on determining andsupporting changes in these styles.

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Culture Drives Digital Success at Quicken Loans"

"Maverick* Research: Living and Leading in the Brain-Aware Enterprise"

"Maverick* Research: Socially Centered Leadership"

"Digital Humanism Is a Key to Digital Success"

"Accelerate Digital Workplace Momentum by Understanding How the Brain Works"

"Peer Advocates Put a Face on Organizational Change"




"Five Must-Have Practices for Successful Organizational Change"

"Digital Workplace Organizational Change Imperatives"

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