Jay W. Lorsch and Emily McTague, Review by Janet Schulz
The cover story of the April 2016 Harvard Business Review is titled “Culture is not the Culprit.” The sub-title is “When organizations are in crisis, it’s usually because the business is broken.” In the article, authors Jay W. Lorsch and Emily McTague recap interviews with four different transformational leaders, CEOs who led their organizations through complex integrations, financial difficulties, or both.
The authors’ thesis is that a common panacea for organizational ineffectiveness is to “fix the culture,” and they posit that culture isn’t something you fix. They contend that cultural change is “what you get after you put new processes or structures in place to tackle tough business challenges.”
While this may be true, my feeling as I read the article is that this is a bit of a “chicken or the egg” debate. Each year, Baird Group works with organizations to help them transform their cultures and improve the patient experience. In our view, culture can be a culprit. It can inhibit the changes in thinking and action that are needed to move forward. Cultural shifts only happen when leaders accept that culture can be changed, and that changing it is their responsibility. Leaders have to be willing to run diagnostics on the current culture. Without a diagnosis, it’s difficult to discern what those new processes or structures need to be.
The article provides a concise yet insightful recap of the business challenge each CEO faced. While the challenges were different, there is remarkable similarity in the path to success. Steps include:
- Define the vision, goals, and objectives: What is core to success, what is the current performance, and how will the organization know it’s on the right track?
- Set the pace and align the structures: These successful CEOs weighed the risks of inaction and took pains to set the right pace of change. They then set expectations and aligned recognition, pay/incentive, and reporting structures to be in sync with their vision.
- Celebrate the new: Share stories of actions and results that are consistent with the vision.
The steps above closely parallel the process Baird Group uses to help clients set a new direction. We ask them to envision their desired culture, work with them to assess gaps, and identify the necessary culture “shifts.” We then ask senior leaders three questions:
- What will success look like?
- What could get in the way?
- What do you need to do as senior leaders to mitigate those risks?
By having an open discussion of what has to change, and then doing it; transformation can indeed occur. Is that a culture fix? Is it a business fix? At the end of the day, it’s the results, rather than the definition that matters.