Category Archives: Management

How you change a corporate culture (at a large company)

It is extremely hard to change a large company’s culture for the better.  (It is relatively easy to change the culture for worse.)
So first, let’s assume you are trying to change a company’s culture for the better.

Given that, you first need to assess the current company’s culture.  There are two vectors to assess:
1. Do the employees have high expectations of themselves?
2. Do the employees have high expectations of the other employees?

If the answer to both questions is “yes,” then you likely have a good culture already and it just needs some tweaking.  It is a High Performance culture.  This is the ideal state and pretty much every high-performing company (whether large or small) in history fits in this category.  

If the answer to both questions is “no,” then you might as well not even try.  The company is a lost cause and will eventually become a discarded fossil.  Unfortunately, even some of the best companies can evolve to this state over time.  If you find yourself working for one of these companies, find a new job immediately.  

The harder discussion is what happens if your company answers “yes” to one question and “no” to another.  Let’s explore this.

The Hero Syndrome
If the culture is defined by employees having high expectations of themselves but low expectations of their colleagues (“yes” to #1 and “no” to #2), then you have a culture of hero syndrome.  It means that some people feel it is their duty to carry the team.  It also means there is a lack of trust that others in company will do a great job.  It causes the high performers to work longer and longer hours to carry everyone else.  And it means that there are way too many low performers in the company because there are few consequences for free-riding.  

In the Hero Syndrome scenario, you have the ability to change the culture to become a high performance culture (getting to “yes” answers to both questions).  It is extremely hard work and most companies fail to make the transition, but it is possible.  The main thing you need to do is upgrade your team and promote trust.  Here are the things you need to do to make the changes:

1. Upgrade your executives.  Most CEOs are afraid to upgrade their executives because they are worried (1) about how the rest of the organization will feel if “Bob” leaves; (2) worried about how the street or investors will think; or (3) worried that if Bob leaves before his replacement starts, the CEO will have to jump in and do the work.

If Bob is an executive and is not a high-performer, he is a cancer in the organization.  You cannot upgrade your talent without starting at the top. 

Of course, this assumes that you (the CEO) is a high-performer.  If you are not, there is no chance for transition.

2. Lay off the low-performing people.  This is obvious but so many companies forget this step.  And when you lay off the low performers, you need to signal to everyone else in the company that you laid these people off BECAUSE they are low performers.  Too often when companies do lay-offs, they tell a story that people were “redundant,” or they are making cuts in a division.  Or it was “market forces.”  And while this explanation makes the people being laid off feel better, it makes the people remaining at your company feel insecure.  A high performing person could interpret the layoff to think that their job could be at risk if market forces change.   So simply, when you lay off low-performers, communicate to everyone in your organization that you laid them off BECAUSE they were low performers.

2a. Never, ever, lay off a high performer.  If the employee is awesome and their job becomes “redundant,” move that person somewhere else in the organization (even if the move ruffles feathers).  Once you identify a superstar, do everything to make sure they continue to work in your company.

3. Change your internal policies to promote trust.  You cannot move to “yes” on questions #2 if people in your organization do not trust each other.  You need to do everything that promotes trust.  Some ways to promote trust:

  • Moving your HR, IT, and reimbursement policies to mimic the “Netflix HR Model” — see Reed Hasting’s slides on the Netflix Culture
  • Let people know that you trust them by stopping to micro-manage them.  The only reason to micro-manage someone is because you do not have full faith in them.  If you find yourself micro-managing someone, you need to take a step back and think about if you have the right person.
  • Decentralize as many decisions in your organization as possible.  This is especially true in IT — empower the people using a software product to buy the software product directly (and not be dictated by IT). 
  • Eliminate necessary meetings and reporting that have been put in place because trust is low.

The good news is, you CAN move from the Hero Syndrome to a High Performance culture … but it is just really hard.

The Hypocrite Syndrome
The opposite of the Hero Syndrome is the Hypocrite Syndrome — employees having low expectations of themselves but high expectations of their colleagues (“no” to #1 and “yes” to #2).  

In this case, I think it is almost impossible to change the culture to a high performance culture.  You are going to be stuck in a nasty loop.  

Unless what you are doing is a matter of world peace, I would suggest you leave the company and try to join one that already has a high performance culture.  Being in the Hypocrite culture is often about nasty politics, blame, and stagnation.

Summation:
All high performing companies have employees that have both high expectations of themselves AND high expectations of their colleagues.  If your company does not have that, the only other redeemable scenario is a company with employees that have high expectations of themselves and low expectations of their colleagues.

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