Organizational Change is Personal

And yes...feelings matter







The Workforce Generations are Changing








The Leadership Paradox of Vulnerability







Culture Creates Lasting Value

I recently heard from my old friend and past boss Klaus Entenmann, Chairman of the Board of Daimler Financial Services. He sent me and a couple of my past colleagues an email to let us know the large-scale culture change we started in 2005 has become part of the lifestyle of the organization. Nine years after we had our first meeting to determine what would energize the culture, the company has incorporated those values and principles as its own. This culture is delivering results as proven by the fact that Daimler Financial Services is the first German company to make it into the top 25 Great Places to Work and are continuing year over year to produce strong and impressive business results.

This is the challenge of culture change. Often leaders are focused on an immediate need and as a result, read some new leadership book and then buy into the idea that changing the culture will fix that immediate need. In most cases, it doesn’t work that way. Culture is established over a long period of time. The rules of the new culture have to be established and then tested over and over again. If we say that we are now customer-focused, we have to have those hard moments when customer-focus is difficult. When we say we will only accept integrity, we have to have those moments where costly decisions are made in the name of protecting integrity. This is how we determine if the new value is real

With a short-term focus, these “values” end up being seen for what they are…great ideas, aspirational goals, and transitory. Leaders who are playing the long game and truly trying to change the way their organization lives and breathes understand this. They actually look for those opportunities to show their followers they mean exactly what they say and they are willing not only to invest in this new direction but to pay the price of their commitment.

The other lesson to gain from this is that culture change is enabled from the top. Sometimes it starts there, sometimes it starts at the grassroots level, but in either case, if the leadership of the organization does not commit, it just isn’t going to happen. In the case of Daimler Financial, a huge investment was made in bringing the senior leadership along into this new culture. For some, it was no longer a good fit and they moved on to other things. For others, it was exactly what they had envisioned when they first decided they wanted to become leaders.

Culture is hard to understand and to wrap your arms around. It’s that white space between decisions, it’s a belief system and it’s a set of rules that are unspoken but understood. Culture requires faith in your own leadership and in the abilities of your followers. And rather than a management function, creating the environment where a strong culture can evolve is pure leadership. To be a small part of a significant and lasting culture change is a unique experience but well worth the effort.

Does your culture create value? We would love to hear about it so please share!

Strategy versus Structure

There has long been a debate when looking at the effective organizational approach to change.  The question is this. For effective change to take place, does one first change the organizational structure and systems and then adapt a strategy (and human strategy as well) to fit the new structure and system, or does one start with the strategy and mindset changes and then adapt the systems and structure to fit it?

This is one of those interesting leadership questions because, if you have an answer, you probably believe it is the only logical answer to have. Of course my answer is one of those amazingly frustrating answers for many people. I believe it depends on the change being instituted and the context of the specific leadership and organizational challenge.

In my opinion, it is possible for a full scale and successful change initiative to be instigated by the recognition that current systems, hierarchies and processes are either producing less than desirable results or, more likely, are not creating results quickly enough. This is a carry over from the industrial age that we haven’t quite settled yet. Systems that create efficiency and run at the lowest cost are not necessarily the same systems that create the greatest speed or quality. As I’ve written here before, the obsession with cost reduction has created many organizations that now find themselves able to do things inexpensively, but without innovation or speed to market.

On the other hand, organizations that have flat structures, few complex processes and an innovative mindset are not immune to dealing with change. Many of these innovative companies (Google, 3M, Apple) have come to recognize that their cowboy mindset worked well in good times, but did not prepare them for the more team-oriented approach that may be necessary today. Yes, these companies have had teams forever, but the kind of collaboration that is necessary now is so entirely cross functional and focused that few organizations are accustomed to it. These aren’t organizational design issues…these are internal issues. In these cases, the mindset has to change first, and the design will follow.

I believe what is most important is the manner in which the change process is approached. First of all, we should quit acting as if the “change process” is a unique and perhaps frequent stand alone event. In the current environment, change is not separate from leadership…it IS leadership. Second, for either design driven or internal driven change to work, stakeholders have to be enlisted early in the game. We have become a complex environment and diverse perspectives will provide the framework for understanding what and how change will enable the new corporate.

Finally, we have to get away from believing that there is one way to either make change happen or even to describe the phenomenon that occurs during change within an organization. We have become comfortable with approaches and theories that date back to a much more stable and industrial age. For change to work, leaders have to have open minds and hearts and be willing to understand that they don’t understand.


Mayer vs Gillard—A contrast in leadership success

An interesting pairing of events has occurred recently which brings up a good question. On the one hand, the first prime minister of Australia,  Julia Gillard, lost her position in a barrage of what appear to be just poor decisions, bad timing, and bad communication. While she herself has argued that it’s more than just gender, others have decided to make it an example of how female leaders are set up to fail. Ms. Gillard stated, ” The reaction to being the first female PM does not explain everything about my prime ministership, nor does it explain nothing about my prime ministership.”

Marissa Mayer

Mayer had a good year

Julia Gillard

Gillard not so much

At the same time, Marissa Mayer celebrated her first year as CEO of Yahoo! on July 16th. For the most part, she has been successful, even with some tough press regarding some of her more aggressive decisions (like bringing workers back into the office). Yahoo!’s stock (sorry—the brand and the apostrophe just look silly don’t they?) has risen over 70% since she has taken the helm and although Yahoo! is still not a major threat to Google, she is also only a year in. Her focus has been on culture change but she has managed to shore up earnings at the same time. That’s pretty impressive.

So, is the failure of Gillard a result of gender? Is the success of Mayer a result of gender? Is it possible to even tell?

The problem with a bully pulpit is that it always oversimplifies the situation. To imagine the Ms. Gillard failed only because the system defeats female leaders is to ignore all of the other elements that play a role in a leader’s success. To imagine that Mayer has been successful, even though she is a woman, is the same type of limited thinking. Of course these leaders have had to deal with specific constraints and battles because of their gender, but they have also battled against market and political forces that are gender neutral.

To reduce the debate to a single factor, whether it is gender, generation, ethnicity, whatever not only oversimplifies the situation but it takes away from the true leadership abilities of the person in question. Gillard may turn out to be a strong politician and moving force in Australia yet…she’s fearless and focused. Mayer may yet struggle, but she also has strong capabilities for which she deserves credit regardless of gender. We need leaders, whether women or men, and we should celebrate when we find them and learn from them regardless of their chromosomes.

What do you think?