JetBlue Airways Corp. has a pronounced focus on customer service, and five values — safety, caring, integrity, fun and passion — form the backbone of its culture.
JetBlue lives this culture by empowering its staff to independently make decisions that demonstrate its core values and consider the customer in all business decisions. For example, if a passenger has a problem a flight attendant can easily fix, rather than get permission from a superior, he or she can fix the problem on the spot. Living this culture has driven JetBlue’s annual ancillary revenue growth from $190 million in 2007 to $590 million in 2012.
In 2013, Booz & Co., where the authors work, conducted its Culture and Change Management Survey, with responses from more than 2,200 employees at all levels globally, to better understand perceptions about culture and its effect on change. Data reveal that 84 percent of respondents, and 86 percent of C-suite respondents, believe their organization’s culture is critical to business success. Some 96 percent of respondents reported their organization is in need of culture change, and 60 percent said culture is more important than the company’s strategy or operating model.
With so many recognizing the importance of corporate culture in business success, it is critical that learning leaders understand their role in ensuring culture leads to positive organizational change.
How Culture Makes Things Work
Online retailer Zappos.com is one well-known example of how prioritizing culture enables business strategy and success. “Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own,” CEO Tony Hsieh told the New York Times in 2010. This level of service has been documented via anecdotes of Zappos employees sending flowers to a customer when a relative passed away, or a company representative spending eight hours on the phone with a customer because that customer needed someone to talk to.
Zappos’ culture is based on 10 core values, which include service and creating fun and a little weirdness. Taken together, these values form the culture, and that culture enables the business results that have made Zappos an online customer service leader.
Hsieh takes an inclusive approach to corporate culture, first by embodying strong ethics and standards himself, and second by ensuring he employs people who will do the same. That fit is the most important element the company considers when hiring and retaining staff. In fact, rather than spend time, money and energy training new hires who show early on they aren’t a fit, he offers them compensation to leave their positions.
However, while the Booz & Co. survey respondents clearly indicate the importance of corporate culture to business success, 47 percent do not believe corporate culture is an important part of the leadership team’s agenda, and 45 percent do not think their companies are effectively managing their corporate culture. Of even more concern, just more than half (51 percent) say their organization’s culture is in need of a “major overhaul.”
Why Employees Resist Change
Many companies struggling with particular issues related to their businesses are aware of them. In fact, they often throw good money after problems, yet only about half of transformative initiatives actually achieve and sustain their goals to create change.
According to the survey, many of these important initiatives fail because employees experience barriers that prevent sustainable change. The top barrier is too many competing priorities, which leads to change fatigue, a condition that occurs when managers ask workers to follow through on too many changes at once. As a result, employees adopt none of them.
Respondents also said they resist change because past attempts at change have failed, leading to skepticism, and they don’t feel like they are part of the change. Finally, 48 percent said other than communications and leadership alignment, they do not have the capabilities to effectively deliver change.
When managers burden employees with too many change priorities, when the employees aren’t sure how to proceed or when they don’t believe the initiative is good for the organization, they often take a wait-and-see approach. Employees will look to their supervisors for direction and to their co-workers for clues about which aspects matter the most. This sort of uncertainty can keep a change initiative from gaining momentum.
The survey data did offer one bright spot — culture can be a great enabler of organizational change. Whether the change involves digitization, faster product development or systematic cost reduction, there are always elements of a company’s existing culture that are consistent with the strategic direction; these elements can be leveraged to accelerate transformation. The survey shows when companies tap into the energy and emotional commitment within their cultures, change initiatives are far more sustainable.
In any major change initiative, it is management’s job, along with the people affected by the transition, to figure out how to harness their company’s strongest cultural attributes to build momentum and create lasting change. Companies that take a culture-led approach to change can substantially increase the speed, success and sustainability of any transformation. Based on the survey findings, the odds of success are about twice as high with culture-led change as with more conventional change management approaches.
The CLO’s Role
Aligning workforce development with a company’s business objectives is a critical component of the chief learning officer’s role. To effectively drive workforce performance to support corporate strategy, CLOs must understand, reinforce and live by the company’s culture, and know how to leverage or help evolve it to support organizational change.
There are steps — both formal, such as training, and informal, such as peer-to-peer networks — chief learning officers can take to use corporate culture to boost success rates in change initiatives.
First, the learning leader should understand a company’s culture diagnostics and assessments to gauge culture strength and associated challenges. For example, executives who don’t fully live and demonstrate cultural priorities must lead by example to create and maintain a culture that supports the vision, strategic direction and values, and delivers positive business results. Understanding a company’s cultural strengths, then effectively tapping into the energy and emotional commitment those strengths engender in employees, provides incredible momentum to accelerate transformation.
Second, a chief learning officer should identify and develop the critical behaviors that clearly demonstrate to workers what they should be doing differently. By focusing only on those few behaviors that are most vital to promote business success, the company can create targeted development programs and accelerate transformation results. When employees are asked to do only a few specific things differently, it makes expectations clear and eliminates some of the change fatigue that can come from competing priorities. Then, when employees start to see results and their peers exhibiting the behaviors, they often are more inspired to continue the transformation journey.
For example, a CLO could build a training program that explains to current and new employees how to live the culture strengths and overcome related challenges. This program should demonstrate what the critical behaviors look like in practice and the methods employees can use to exhibit those behaviors. More informally, a CLO could provide opportunities for employees with similar interests to get together to talk about their work and their experiences adopting the critical behaviors.
Third, learning leaders can instill a sense of employee pride and commitment. Look for ways to connect workers to something larger than a new policy on paper. When employees feel their work is contributing to a larger purpose they believe in — whether it’s building a fighter jet that is so well-made it keeps service members safe while protecting their countries, or delivering a health plan that helps its members to live healthier lives every day.
Fourth, create programs to help grow informal peer networks and motivators, and develop methods that empower employees to live the culture and critical few behaviors. While culture is often articulated at the top, managers reinforce it at every level in a company. CLOs may need to educate managers how to empower direct reports and praise the benefits of change in ways that lead to improved behaviors and increase rates for change adoption.
Finally, tell company stories that embody the culture, and repeat them. Stories about a strong leader in the organization or a defining moment in the company’s history are often a source of pride for employees and can be a natural way to reinforce desired behaviors.
Ideally, CLOs will include some facet of corporate culture as a part of every employee development program. For example, they should choose corporate learning strategies and allocate budgetary resources in accordance with cultural objectives, and find ways to connect employees with similar interests, capabilities and goals.
When fully aligned with the learning strategy, culture can be used to deliver the most effective learning to help employees meet the company’s strategic priorities. When a company’s culture is not aligned with the strategy, a culture-led approach to learning can help to create desired performance results more quickly and sustain them long term.
DeAnne Aguirre is a senior partner with Booz & Co. Micah Alpern is a senior associate with Booz & Co. and a member of the Katzenbach Center’s operating team. Kristy Hull is a Booz & Co. principal. Rutger von Post is a partner with Booz & Co. and head of the Katzenbach Center in North America. They can be reached at editor@CLOmedia.com.