Philip Houghton: Successful culture change begins with the CEO

Many leaders recognise the ongoing and urgent need to build more agile organisations; especially if they’re to ensure a long term, sustainable future for their business. The challenges brought about by more aggressive and innovative competition, globalised markets, digital disruption, the 24/7 nature and transparency of social media, as well as continued failures of corporate governance (think Carillion), mean that survival requires rapid and continuous adaptability and change. Yet while this agility comes ‘in-built’ with start-ups and smaller enterprises, it is frequently alien to most large and established organisations.

Our research tells us there are a number of critical factors that help ‘big corporates’ to successfully embrace change. These include:

Ownership at the top

Many CEO’s don’t own the link between the top leadership’s growth and development, and the growth and development of the enterprise. If the organisation is to grow, adapt and evolve then its people must grow, adapt and evolve too – and if the top team are to be ‘leaders’ then surely they must actively model this and – to quote Ghandi – “Be the change they want to see in the world”.

The CEO plays a critical role here in challenging their top team to own the culture agenda, and to start to see themselves as the most critical enablers of culture change.

A change of mind

Many leaders forget that ‘what got us here’ probably won’t ‘get us there’. They often see ‘logic and process’ as the answer and try to ‘manage’ their organisations towards their end goals. But our experience of working with hundreds of top teams is that this process-driven mindset doesn’t deliver significant change at all.

A different mindset focuses on ‘creating the environment’ for the right things to happen. This culture-driven approach requires the CEO and top team to focus much less on ‘performance’ (the role of management) and much more on energising people around their vision and ‘organisational learning journey’.

As the French writer Antoine de Saint-Exupery says, “If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”

Acts of leadership

By creating the ‘right environment’, organisations learn to adapt and change naturally and holistically through lots of individual and collective “acts of leadership”, or leadership moments. In this way, anyone can be a leader because leadership is simply the act of taking responsibility, or doing the right thing. An organisation that gives people vision, helps them learn and grow, and encourages them to take responsibility, will see change happen every day. Not because it’s been mandated from on high, but because people feel motivated and energised to continually improve and deliver for their customers.

Of course, the leader must set the tone and the CEO does this through his or her own acts of leadership (or ‘signature actions’) which demonstrate “things are really changing around here”. The leader’s role then becomes simply to ‘catch people doing things right’ and to ‘tell powerful stories’ that continually bring the change to life.

Putting culture at the heart of the business

In turn, this helps to ‘put culture’ front and centre of the organisational agenda – right alongside the vision and strategy. Only the CEO can do this. Indeed, without the CEO’s leadership and commitment, culture development becomes another ‘initiative’ rather than an ongoing dialogue about ‘how we create the right environment for success’, ‘how we evolve and adapt to deliver our business objectives’ and ‘how we respond to the changing world we operate in’. Essentially this is about making the “how” as important as the “what”.

Seven ways a CEO can lead culture change

As the driving inspiration behind setting the culture tone in an organisation, a successful CEO…

1. Clearly expresses why culture development is critical to organisational success, performance and sustainability
2. Helps to shape the culture tone and aspiration, through consistent messaging and story-telling – and especially through signature actions that demonstrate ‘things really are changing’
3. Hires executives who share values that support and enable the wanted culture, and holds executives to account for ‘being the change’
4. Creates an environment at the top table in which culture can be openly debated. Owns the link between top team growth and behaviours, and wider organisational culture challenges
5. Invests appropriate leadership energy and financial resources behind culture aspirations – leading key initiatives and conversations
6. Celebrates culture strengths and actively recognises ‘acts of leadership’ and those who model the wanted culture
7. Openly shares personal development aspirations and challenges, being seen as ‘human’, accessible and authentic.

In my next post, I’ll look more deeply at the role of an organisation’s executive team in shaping the culture strategy.