Transforming Organizational Culture
Culture is like a shadow: You cannot change it, but it constantly changes. Culture is read-only.
A complex system is subject to cause and effect, and problems within such systems have solutions. Organizational culture should not be seen as a problem to be solved; instead, it should be nurtured as an emergent phenomenon. Legacy leaders often perceive everything through a factory lens and believe that hard work alone can fix any problem. However, our bureaucracies need to be equipped to handle the daily surprises we encounter, and they will never provide us with unexpected breakthroughs. Leaders and teams must understand that our way of working is not fixed but rather a result of our choices. We should appreciate what still serves us and be willing to change the rest. Every organization should ensure its purpose is embedded at every level, creating a fractal-like alignment.
Legacy organizations tend to obsess over measurement, using it as a control mechanism to identify and punish poor performance. However, decision-making and actions should not solely rely on metrics; a clear understanding of intent should drive them. The purpose of a team should align with the organizational goal.
It is essential to ask every team within the organization to articulate their essential intent and ensure that the purpose remains visible even three decades later. A concise roadmap for the upcoming months should be established, aligning actions with the purpose. The tendency at the top is to demand more compliance, seeking excessive specifications. At the same time, the lack of trust in leadership leads to a belief that decisions must be tightly controlled.
Many companies mistakenly use OKRs (Objectives and Key Results) as a top-down control mechanism, aligning subordinates’ OKRs with their superiors. While this may create a sense of alignment, it eliminates the possibility of divergence or serendipity. Once individuals set their OKRs, they will strive to achieve them, even if it is not beneficial for the business.
A healthy system should not cascade intent in a perfect hierarchical manner. Instead, teams should regularly gather and generate their strategy statements, focusing on what they need to succeed and making implicit factors explicit. Scenario planning should occur at every level, fostering enthusiasm and prioritizing projects aligned with the most critical goals.
The annual planning process often needs to improve the reinvention of the working method. Teams should be empowered to take ownership of their local expression of strategy and operations. By inviting colleagues to design a competitor that would surpass the organization, a sense of enthusiasm and engagement can be generated. This enthusiasm is inversely proportional to the amount of organizational debt carried.
Creating space for emergence and harnessing the full potential of team members is crucial. It is essential to align strategy with purpose, consider critical success factors and trade-offs, continuously develop and refine strategy, communicate the system effectively, and use methods to guide day-to-day activities. Recognize that sound strategy depends on the ability to perceive what is happening and accept that the strategy must be flexible and adaptable in rapidly changing areas. Sharing resources can be challenging due to the tragedy of the commons.
Acknowledging that people are not mere resources but individuals capable of directing their time and attention where they can add value is vital. Performance can be achieved without rigid targets or individual incentives. Behavior should be guided by relative targets and sharing the wealth created by the business. Predicting the future is impossible, so long-term commitments should be reduced to maximize discretionary funds. Annual rhythms should be disregarded, and resource allocation should be based on real-time information.
Maintain the discipline to make strategic decisions during both good and bad times. Workflow represents the flow of work within an organization, connecting the value-creation structure to the value-creation process. Often, project teams need to be more cohesive, leading to appointing a project manager who needs more authority to lead due to participants’ functional allegiances.
[¹]: Brave New Work: Are You Ready to Reinvent Your Organization?
