Author: Larry Senn

A person’s ability to deal with uncertainty is influenced by many factors. Those who are older may be able to deal with uncertainty better because they have experienced more uncertainty and made it through, and often things turned out OK—perhaps the way they’re supposed to. Those who practice faith or religion may be comfortable in uncertainty because they have a higher power to look to.

Thoughts create our moods and behavior

If you put age and religion aside, a person’s ability to deal with uncertainty depends not so much on the external circumstances, but on what they make of the circumstances in their thinking. Our thoughts create our experience of life. Worried thoughts create worried feelings, while hopeful thoughts create hopeful feelings. Of course, there are circumstances out of our control that can cause worry and distress: natural disasters, unexpected death, financial insecurity, and other similar crises. Yet, even though these events may be out of our control, we do have control over our reaction. Our reality is based on our thoughts.

Say, for example, that you and a coworker hear that your company is planning a round of layoffs. The two of you both have mortgages, children, and other financial responsibilities, but you immediately descend into a panicked spiral. “My life is ruined, we won’t be able to keep the house, my kids won’t be able to go to college…” are some of the thoughts you go through. You look over and see you coworker, who looks unfazed by the whole issue.

Maintaining a positive outlook is essential

Your coworker could be making a conscious effort to look at the positive aspects in her life. She might turn to gratitude about her kids and that everyone is healthy. Instead of worrying about her job, she may turn to optimism when she realizes that she’s not a huge fan of her job anyway and gets excited about the potential new prospects. Both people are dealing with the exact same situation of uncertainty, but they’re having very different experiences.

“The happiness of your life depends on the quality of your thoughts.”
-Marcus Aurelius

The benefits of staying positive through uncertainty are not just about feeling better—they impact the outcome. You’ll be better able to seek support from others when you remain positive, as people tend to gravitate towards positive people. If you can stay positive and keep your mental traction through crises, you’ll be much more able to come up with solutions to problems and solve key issues. This is true in life and in business.

Advice for uncertain times

If you find yourself in an uncertain situation or crisis, consider these pointers that have worked for my team and me, and many of our clients:

• Take a moment to reflect on a few things you’re grateful for. No matter what is going on, we all have things to be grateful for—this is a powerful mood tonic. A gratitude perspective comes through a practice of looking at what we do appreciate about our lives and other people versus looking at what we lack. A grateful state of mind is a quieter, more centered mind. This mindset contributes to many aspects of a healthy workplace culture, including:
  • Better collaboration and decisions for the greater good
  • A better customer experience
  • Higher employee engagement
  • More creativity and innovation
  • Added resilience in the face of challenges
  • A positive organizational spirit

• Surround yourself with positive people. Studies have shown that moods are contagious, so by being around those who make you feel good, your mood will go up. The central finding of my doctoral dissertation on organizational culture published over 30 years ago was that an organization’s culture and climate is most greatly influenced by the shadow of its leaders. The biggest shadow we bring to work each day is our state of mind or mood. It is also the biggest one we carry home at night. That should be food for thought for all of us.
• Take care of yourself physically. You’re more likely to feel worried and anxious when you’re low on sleep, eating poorly, and not exercising. Our physical state plays a role in our thinking. When we’re tired and worn down, we’re more vulnerable to lower-quality thinking and lower moods. I am of the belief that in order to be your best mentally, you have to be your best physically.

You choose how to respond

Recognize that in life and business, a fair amount of surprises will cross your path, and some may come with immense challenges. When that happens, remember: Stop. Think. Decide. Only you can make a conscious decision to take a more effective course of action.

If you experienced a sudden crisis in business or in life, how did you overcome your circumstance?

Editor’s Note: Since its founding in 1978, Senn Delaney has had a singular focus: To create healthy, high-performance cultures. Led and chaired by Dr. Larry Senn, the premier culture-shaping consultancy celebrates 40 years of helping corporate leaders in this endeavor. Larry has shared his knowledge through our blogs (ConstructiveCulture and CultureUniversity) and at our annual culture conference. We are honored again to share his wisdom with our readers and colleagues through this blog post.

Editor’s Note: This is part two of a two-part post by Larry Senn. Part one was posted on Feb. 23^rd.

Successful mergers and acquisitions must be based primarily on strategic, financial and other objective criteria, but leaders should not lose sight of understanding and heading off the potential clash of cultures that can lead to financial failure. Far too often, cultural and leadership style differences are not considered seriously enough or systematically addressed.

A great deal of evidence indicates that the ultimate success of mergers and the amount of time it takes to get them on track is determined by how well the cultural aspects of the transition are managed. Yet executives generally spend quite a bit less of their time focused on this than other aspects of the deal.

In reality, there is much more work to be done to convince CEOs involved in these deals to put more time and effort into cultural integration. A Mercer survey two years ago found that many organizations are not well-prepared to effectively manage cultural integration issues. Nearly one quarter of companies were moving towards developing a more formal cultural integration process, but 68 percent still did not regularly use a systematic approach to identify gaps between organizational cultures of the merging companies. Only 37 percent of organizations surveyed had invested in developing leaders with the expertise to understand and lead cultural change.

WellPoint: Prescription for a healthy merger

Organizations we have worked with on cultural integration have been able to achieve higher levels of value faster from their transactions. The most notable example of a successful merger was the WellPoint-Anthem mega-merger. Anthem’s acquisition of WellPoint made it the largest healthcare management company in America.

Read the article prescription for a healthy merger

Larry Glasscock, who was CEO of the acquiring Anthem, became CEO and president of the combined company. Glasscock knew that leaders must quickly and thoroughly address the cultural issues involved in mergers, especially in mergers of equals such as this one. He acted early to minimize uncertainty, align leadership and maximize synergies to ensure that the goals for the merger were realized. He engaged Senn Delaney to help define and support the leadership in building a new, high-performance culture for the new company.

Senn Delaney began its culture-shaping work with Glasscock and his executive leadership team by diagnosing the cultures of the merging companies. The team was brought together in a culture-shaping process. They spent time connecting, understanding each other’s behavioral styles and working together to define the customer-focused culture and the new strategy. As a result, the company quickly achieved the synergy savings it envisioned from the merger.

Larry Senn shares insights about avoiding culture clash in this video update

Here are some key best practices that leadership should use to ensure greater success in a merger or major acquisition.

1 Create a merger integration team

Transition merger teams play a critical role in the success or failure of the newly merged organization. They help establish the new structure and processes, while being a key vehicle in building a new culture. In addition, they give each side their first experience of the ‘other’ company. A fulltime merger integration executive should be appointed immediately whose responsibility is solely the successful operational and cultural integration of the merged organizations.

2 Build a high-performance team at the top

There is always an acquirer and acquiree in a merger, and it is typical for the acquiring company to see themselves as the winners and the acquired company as the losers. Typically, the controlling company wants to impose changes, and people view those in the acquired company as highly resistant to change. It becomes critical for the new senior team to quickly come together as a new, high-performing team, modeling the new organizational culture.

These senior executives need to establish the cultural rules of engagement in the new entity as quickly and effectively as possible. They should spend time in a well-designed, facilitated process to consolidate and align the team on the shared values and guiding behaviors for the merged entity. The transition merger integration team should also participate in this process.

3 Establish a new set of shared values

In a true merger designed to create a new combined entity, the senior teams of each organization need to work together to clarify the new organizational mission, and the shared values or behavioral ground rules by which they are all going to play. In an assimilation acquisition, the acquiring firm needs to have a clear vision, values and guiding behaviors and a process to orient the newly acquired employees.

The senior team needs to define the new vision and values quickly, and share them with the merger integration teams. The transition merger integration teams will use the vision and values as their guide in deciding on and implementing changes as well as serving as role models for the new values.

4 Perform a culture audit

Understanding how things are seen in the other cultures, learning mutual respect, and being open to exploring different points of view are the keys to the human factor in any merger or acquisition.

If a cultural audit was not done during the due diligence phase of the merger process, then a full analysis of the culture should be conducted immediately within both organizations to identify the areas of similarity and disparity. The data provides empirical data to assist the merger integration team to utilize the best of both organizations and identify areas where behaviors need to shift.

5 Communicate benefits to reduce resistance to change

It is important to communicate the reasons and benefits of the merger. People may not like it, but if they see that it has a legitimate purpose, and the benefits are obvious, there is less resentment, fewer rumors and employees are more likely to embrace change. Successful mergers only happen when upper managers are visible and accessible to all employees affected by the merger and promote the benefits at all levels.

6 Provide a culture integration process for new teams

As new teams are created through restructuring and assimilation, they must also be given the opportunity to partake in a customized culture-shaping process. This allows them to let go of the past, focus on the new vision, strategies and values, and learn to know each other as people rather than from the legacy or acquiring company.

Have you been involved in a merger where culture was not properly addressed? Did you experience cultural clash? What are some ways you would work to bring two cultures together?

Editor’s Note: This is part one from a two part post by Larry Senn.  Part two will post on Feb. 25th.

Every day in the news lately you read about the latest mergers: airlines, pharmaceutical companies, insurance companies, large retailers like Staples and Office Depot, all consolidating for so many business reasons. Some are successful and create flourishing companies that benefit stockholders and employee’s careers. But  here’s the really scary reality: It’s been well documented over many years that up to one third of mergers fail within five years, and as many as 80 percent never live up to their full potential. The main reason for this is what has been called ‘cultural clash’.

Every company has a culture just as every person has a personality. The culture is the unwritten ground rules and the way we do things around here. Cultural clash occurs when two companies have different styles, habits and priority of values. Imagine a company in New York City that prides itself in being direct and  ‘telling it like it is’ merging with a ‘Midwest polite’ company where people live by the credo, “If you can’t say something nice don’t say anything at all.” There are bound to be cultural clashes once the marriage takes place.

Avoiding cultural clash begins with being mindful of our thinking

How can companies avoid cultural clash, and how can leaders and employees best deal with the change so it doesn’t produce undue stress and strain for them? The answer lies largely in the stories we make up in our thinking.

The prospect of a merger and the change it will bring can be exciting to many people who see change as, well, exciting. That same change can be unwelcome and downright scary to others. For many people, this major change shifts the foundation of the comfortable known to the uncomfortable unknown.

People in this camp, are likely to think things like, What happens now? What is this new company? How will I fit in? What are ‘they’ like? How am I going to be affected? Will I lose my job? Will I end up doing twice as much work?

The less they know about what will happen, the more they are likely to fill in the blanks by imagining what will happen, or what won’t. In other words, their thinking will have a big impact on how they personally adjust to a shifting business world. Since fear of the unknown is the enemy, the sooner the new game is clear the sooner things can settle down.

Leaders considering or in the process of a major merger or acquisition will find our thought paper, Culture Clash in Mergers and Acquisitions, a helpful guide.

Larry Senn shares insights about avoiding culture clash in this video update

How to navigate a merger with a healthy state of mind

Harry Levinson, a management psy­chologist and Harvard professor emeritus, stresses the psychological consequences of the merger experience. He states that even when a merger offers new oppor­tunities, it still tends to be perceived as a threat to one’s equilibrium.

Whether a merger is for the better or worse, it throws relationships, norms, work behavior and support systems out of balance. If these psychological losses are not addressed early on, chronic prob­lems in attitude and behavior can result.

Ultimately, integrating two cultures in a major merger or acquisition requires a systematic focus by the CEO and senior team on a process that includes a robust culture integration process.  But that process takes months, even years to complete, and leaders and employees have to deal with the merger in the here and now.

So, what be done to navigate a new work situation in the healthiest way possible? Here are a number of suggestions:

Learn as much as you can about the company you are merging with.

Learn everything you can about your ‘new bride’.  Getting an understanding of their values, guiding behaviors and cultural signposts will help you understand where you share common ground rather than focusing on how you are different.

Understanding how things are seen in the other culture, learning mutual respect, and being open to exploring different points of view are the keys to the human factor in any merger or acquisition.

Be aware of your thinking and where you are on what we call the ‘Mood Elevator’

Everyone in organizations, from the top to the front line, casts a ‘leadership shadow.’ People who think and behave in ways that demonstrate that they have a growth mindset, energy and vitality, and are ready to embrace change in a positive way, will be seen and felt more positively by others.

This thinking leads to feeling more energized and positive, which affects your ability to do your job well, make good decisions and even your health. On days when you feel worried, irritated, bothered or angry,  life looks a lot different, problems seem harder, solutions don’t come as easily, and you may react to situations and people in a less than positive way.

So, take a moment each day when you arrive at work and throughout your day to be aware of your state of mind. We have found that people who see that they are in lower mood states and who consciously bring their mood up to being curious or even grateful will experience higher emotional intelligence, have better relationships and a higher overall quality of life.

Build and sustain rapport

When companies are acquired or combined, people almost immediately start to focus on the differences in the companies. They also quickly begin to “keep score” on who are the winners and losers.

It is understandable to have some concerns. Some people may lose their jobs while others get promoted. The sequence of thinking most people go through is: First: Will I have a position? Second: Will I have more or less power, stature and influence?

Organizations seem to informally keep score relative to winners and losers not just for roles but for the two merging companies.

If you catch yourself thinking or talking in the we-they mode, reframe your thinking to more of being part of a bigger team on which we all win together. A good way to get into this state is first of all to remember that we are all just people, and that we mostly have good intentions for doing the right thing. We all come to work each day hoping to make a difference and contribute.

Demonstrate the value you bring to the newly merged company

It’s common once a merger occurs for a restructuring to follow. It’s easy and safe to ‘stay under the radar’ when things are shifting, but doing nothing can be a losing strategy, and it will bring you little personal satisfaction and likely cause more personal stress.

Instead of worrying about how you will fit in, keep an open mind and focus your energy on demonstrating your capabilities and raising your hand to offer a valued insight when opportunity arises. You may find a chance for promotion or a new way to learn and grow or provide greater value and have a positive impact.

Be here now

Finally, it’s easy to get ahead of yourself or distracted from your core purpose in a time of dramatic change. Try to start each day with a renewed sense of personal purpose, a thought or two of things that make you grateful, and a feeling of being committed to what matters most. Be truly in the moment when working with familiar and new colleagues. You’d be surprised at the rewards that will come your way through increased trust, people responding to you more positively and in turn being lifted by your spirit and presence.

Mergers are a fact of life in business and are part of a healthy, changing business dynamic. You have the power to make a difference.

Question for discussion: What single thing can you do to bring a healthy state of mind to your work when things are shifting all around you?

What company in the world has not been going through sudden shifts wrought from major, disruptive change? Consumer technology companies, health care companies, automakers, and smart phone manufacturers are among industries whose very foundation is more like shifting quicksand.

To survive and grow, and even regain competitive advantage, many companies are grappling with ways to transform their businesses in the face of radical change. They are responding in many predictable and time-tested ways: changing CEOs and leadership teams, shifting strategies, rolling out new product lines, amping up innovation, cutting costs and restructuring. These are all the necessary things to do to react to change, but these actions usually only treat the symptoms of a chronic illness – hardening of corporate arteries – without curing the underlying cause.

Companies may be missing out on the most important strategy of all: creating a culture of agility. This should be every CEO’s first strategic priority because it is the culture that enables companies to flex nimbly in any direction and execute any strategy. Agile cultures translate into forward thinking and innovation, eschewing the ‘this is how we do it around here’ mentality that causes companies to freeze, and then fall quickly behind.

Consider these questions as you think about your own company:

• Are we changing as fast as the world around us?
• Is our culture enabling us to be agile or impeding us?

Does this describe your organization? If so, then a comprehensive diagnostic survey of the cultural traits of your company should be considered. It is the best way to get a true picture of this and a good start at determining next steps.

In agile cultures, there is a ‘growth mindset’ of constant learning, trust and permission to take risks in order to learn from that that drives decisions, rather than a ‘fixed mindset’ that creates a myopic focus on what has made the company successful.

Nike CEO Mark Parker has been called the most creative CEO on the planet. He embodies the growth mindset I have just described. Parker thinks of it as being agile and responsive to changing customer needs and not having a myopic focus on the success your company has already built. He told Cris Beswick, author of The Road to Innovation, “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success. Companies fall apart when their model is so successful that it stifles thinking that challenges it.”

At Senn Delaney, we guide CEOs on shaping their organizational cultures. They come to us wanting to overcome many business challenges. Some want to create a customer-centric culture. Others need to align the culture to a changing strategy and structure. Many want to overcome cultural barriers that occur during mergers.

And naturally, most seek to increase innovation to be more competitive. These are all great goals, but what they are really are by-products or traits that result from shaping a culture in a desired direction. What CEOs actually need, even if they aren’t stating it in these terms, is to build a culture of agility. This is really the cornerstone of business success in today’s turbulent times of radical change.

What is organizational agility?

This is a great definition of organizational agility by Lee Dyer and Richard A. Shafer of Cornell University ILR School/Center for Advanced Human Resource Studies: “Organizational agility is the capacity to be infinitely adaptable without having to change. Agile organizations strive to develop a built-in capacity to shift, flex, and adjust, either alone or with alliance partners, as circumstances change, and to do so as a matter of course.”

Being infinitely adaptable is the key here, and there’s really only one way to do that: create the culture that has the built-in capacity for agility.

Amazon is a strong example of an agile organization. It has morphed from a Web-based bookseller to an online retail platform to a digital media powerhouse, and most recently, to a leader in cloud computing. And this continual change has taken place in the absence of a performance crisis, demonstrating an ability to envision changes and adapt instead of the reverse.

Why should companies focus on creating an agile culture?

Agility is linked to profitable growth: Massachusetts Institute of Technology research suggests that agile firms grow revenue 37% faster and generate 30% higher profits than non-agile companies.

Nearly 90% of executives surveyed by the Economist Intelligence Unit believe that organizational agility is critical for business success. Yet, most companies admit they are not agile enough to mobilize quickly, respond positively and change to compete successfully.

What are some barriers to agility?

Internal barriers – the culture — prevent organizations from being agile. The barriers include hubris, complacency and resistance to change, poor decision-making, lack of alignment around strategies, vision and values, risk-averse mindsets, siloed thinking and turf wars.

What are common traits of agile organizations?

• Agile organizations are optimistic in the face of challenge, never rest on their success, and regularly seek to improve even when they are successful.
• They embrace failure as a learning opportunity, have a strong purpose, a vitality and a learning mindset.
• There is alignment and clarity around the mission, and vision and values.
• Rapid decision making happens not just during a crisis, but every day.
• There is a strong ability to execute, high levels of accountability, customer-centric thinking and strong cross-organizational synergy.

Can you create a culture of agility?

Most executives have a sense of what agility means for their companies’ future. However, there is still a big gap between awareness of the need for agility and taking concerted action to become truly agile over the long term.

Creating a culture of agility is possible and should be the first strategic priority of the CEO and senior leadership team because it is the culture that spawns an organization’s ability to adjust in any direction and execute any strategy.

Transforming the culture requires a comprehensive approach and a focus on four key principles: purposeful leadership, personal change, broad engagement, with energy, mass and momentum, and focused sustainability.

Conclusion

Adapting to change, while good, is not a winning strategy for long-term success. To be most productive, innovative and successful, companies need to be agile. And that is something you need to bake into the cultural DNA with purpose and focus.

What do you think? Is agility a key to business success? Do you think about how you can personally remain agile in your business and as a leader? What traits do you think you should focus on to become more agile? Please comment on social media.

In a survey of top leaders by Booz and Company last year 84% said culture was critical to success and yet the majority admitted their culture was in need of a major overhaul. So, how do you transform a culture to meet your company’s needs today? How can you get employees or teams to behave the way you need them to execute your strategies and enhance your performance as well as your employee engagement and the customer experience? How do you get the innovation and agility you need in fast-changing markets? How do you get the cross-organizational collaboration that makes one plus one equal three?

You can do that only by improving the behaviors of people. That’s because culture is nothing more than the collective beliefs and habits of the people in an organization. So in the end, you can only transform cultures by facilitating personal transformation in people.

Herein lies the challenge; cultures tend to resist what they most need to change because people resist changing life-long habits and beliefs that are an engrained part of their personal and professional lives.

That was the challenge I personally faced more than 35 years ago as I set out to create a culture-shaping firm. The central question was; how do you change habits of already successful adults? How do you get a seasoned executive who is over-controlling and territorial to collaborate, delegate and coach? How do you get a culture where people blame others, are inwardly-focused, risk-averse or resistant to change to become more accountable, customer-centric, agile and innovative?

Of equal importance is how can you do that in a way that that creates an aligned set of common, healthy behaviors throughout an organization and not just within a person here and there?

Here is what we learned didn’t work

1. Telling people to be different didn’t work even if they agreed with you.
2. Sending them off to get “fixed” and then having them come back to be surrounded by others who didn’t get what they got even if they got it.
3. Hanging values on the wall and having meetings to just talk about them.
4. Conducting assessments and gaining other “outside – in” input doesn’t change most people. For example, someone may have received data saying they don’t listen throughout their whole career, yet he or she probably still doesn’t listen.
5. Expecting people to behave differently when their bosses don’t. (My boss needs this more than I do.)

Here is what we learned does work

So what has proven to work? Think of someone you know who had major shifts in behavior almost overnight. The hamburger-and-fries-eating couch potatoes who start walking regularly and eating better probably had a health scare that got their attention. They had an aha! moment. The parent with the first child that reorganizes their priorities and their life. The person who had a near-death experience, and is suddenly nicer and more grateful for life. A man who has been told repeatedly that he doesn’t listen may listen to his second wife if the first one divorced him for not listening. No one arrives at these changes intellectually. Change comes from an experience that gets people’s attention and causes them to stop and reflect and shift their mindset.

At Senn Delaney, we have demonstrated over decades of culture-shaping work with hundreds of companies that the secret to changing lies in creating those aha! moments around a set of what we call Essential Values, such as accountability, trust/respect, collaboration and innovation.

1) Unfreeze our underlying thought system

We call this key to change “unfreezing” because it challenges our underlying thought system, giving us the ability to choose a new way we want to be.

People may have developed a “for me to win, you have to lose” mindset from years of playing sports but gain the realization that inside the company that mindset no longer serves anyone. People who have been told by their moms, “If you can’t say something nice, don’t say anything at all.”, and now find it is getting in the way of developing and coaching people. (the cause of Midwest polite) Those who believe leaders shouldn’t make mistakes and thus have a habit of explaining why things are not their fault (providing excuses) and realize through a moment of insight that it’s best to acknowledge reality and get on with solutions.

We call these realizations “inside out” learning, and have demonstrated that it is far more transformational than “outside in” learning. When we get that deeper insight and make a personal commitment to a new way of being, the changed behavior is much more likely to stick, especially when reinforced.

This insight-based learning is much more effective in shifting culture than great communication programs, informational meetings or inspirational talks. People learn best when they personally experience something, as opposed to just hearing it, being told about it or reading about it.

2) Use inside-out approach with teams, starting at the top

Our other finding is this “inside out” learning approach works best when done with a leader and his or her team, starting at the top. The process has to start at the top because of the Shadow of the Leader phenomenon I wrote about in an earlier article. It works best in teams because as Kurt Lewin, the famous social scientist, said, ”The immediate social group is the greatest determinant of behavior.” When teams have collective aha!s, they tend to better hold each other accountable for the jointly agreed upon behavior changes.

The failure of most culture-shaping efforts is that organizations skip the unfreezing step in the change model. They may run diagnostics and analyze survey data. They may define core values and competencies and select a set of leadership behaviors. They may communicate them and hold educational sessions about them. What they fail to do is truly unfreeze old behaviors and connect people at a gut level to the Essential Values.

3) Help people make a personal connection to the change by understanding the reason for needed change

We have also found that change is easier when people understand the purpose or reason for shaping the culture. They need to be clear on the “from and to” of the journey. They need to understand that the changes will improve both the spirit and performance of their organization and help it better fulfill its purpose . That will help them make a stronger personal commitment to needed changes in them and their team.

The concept of rapid behavior change through insightful experiences is not new and is well documented, yet the impact is vastly underestimated. It is human nature for us to be more committed to outcomes when we decide to change ourselves.

4) Help people to connect to healthy values for work and life effectiveness by being at their best

There is one other secret to lasting change. The Essential Values for an organization are also principles of life effectiveness for people. You don’t just change work behaviors, you change life behaviors. So, when people see that their insights are leading to better relationships at home as well as work, and a better quality of life, they want that to be a part of them. I think that may be what Peter Senge meant when he said “People don’t resist change, they resist being changed.”

The behaviors needed in a healthy, high-performance culture also make great tools for people to live their lives. A winning culture includes collaboration, personal responsibility, learning and growing, respect, trust and many other important personal values.

Fortunately, it turns out that we don’t need to learn these values — we already have them. They show up automatically when we are at our best. The trick is to be at our best more often. I will address how to live life “at your best” in a future post.

Steps to start thinking about making change in your own life

These insights for changing organizational behaviors and shifting cultures can also be used by individuals to begin to examine your own habits and thinking. Here are a few action steps you can take:

1. Think of a time or life circumstance that gave you an aha! and shifted your thinking
2. What are some habits you have that you know it’s time to reflect on. What shift in thinking could you take to shift that behavior? Think about the benefits to making that change and write them down and keep them handy.
3. Once you have identified something you personally want to change, share that with a trusted friend, family member or colleague and ask them to help you commit to that change by reminding you when the behavior is showing up.

What do you think about these workplace culture insights and the importance of personal transformation?  What has worked for you to support a shift in behavior? Please comment on social media.

When the CEO of one of the nation’s largest pharmacy chains announced that the company would stop selling tobacco products in its 7,700 drug stores, he made headline news and set a powerful example for others to follow. CVS Caremark (recently renamed CVS Health) CEO Larry Merlo put a firm stake in the ground by voluntarily forgoing a source of $2 billion a year in revenue.

So, you might be wondering, what was he thinking?

CVS Health is evolving from a pharmacy into a health care company with a broader commitment to increasing access, lowering costs, improving the quality of care and driving the innovations needed to shape the future of health. As such, its mission is to help its 100 million customer-patients every day to manage such chronic conditions as high-blood pressure, high cholesterol and diabetes— maladies made worse by smoking.

Central to achieving this lofty mission was the creation of a purpose and leading through that purpose. A team at Senn Delaney worked with Merlo and his senior leadership team to define CVS Health’s purpose of ‘Helping people on their path to better health’ as part of a continuing culture-shaping journey. Merlo and his team determined that this purpose is the ‘why’ the company exists, and it is the essence of CVS Health employees’ commitment to customers, clients, stakeholders and each other. Merlo summed his rationale up by saying, “Sometimes, we all need to dust off our values and ask ourselves if we’re truly living in concert with them,” he says. “Put simply, the sale of tobacco products was inconsistent with our purpose.”

Another example of a purpose-driven leader is Gen. Joe Robles, CEO of USAA, a financial services firm serving military families. We helped him focus the organization on creating a great culture to support a high purpose of “serving those who are serving us”. That purpose-driven focus has earned USAA awards for having the highest customer loyalty in America, the best customer service in America, and being the best place to work in Technology in America. It also has among the best financial performance records in financial services. Joe has stated that ”80% of our success is due to our purpose and our work on culture.”

Purpose is an inspirational driver for engaging employees and communities

When a leader and organization establish a clear purpose for the organization (the why we exist), it will become the inspirational driver for engaging employees, clients/customers and communities. In other words, the organization’s strategies, capabilities and culture become the engine used to achieve the organization’s purpose.

As Roy Spence Jr., author of It’s Not What You Sell But What You Stand For, said, “If you have a purpose and can articulate it with clarity and passion, then everything makes sense and everything flows.”

It is important to note that higher-purpose organizations don’t sacrifice performance they enhance it. PepsiCo CEO Indra Nooyi says it well and often in communicating about purpose. In a corporate reputation study on purpose and performance, she stated: ”Performance with a purpose is based on the belief that companies can — and must — achieve business success while also achieving a lasting and positive imprint on society.”

The connection between purpose and performance is clear

There is mounting evidence that aligning an organization with a higher purpose does drive business results. A 2014 study by Deloitte found that an organizational focus on purpose leads to higher levels of confidence among stakeholders and drives business growth.

According to a 2010 Burson-Marsteller/IMD Corporate Purpose Impact study, a strong and well-communicated corporate purpose can contribute up to 17% improvements in financial performance. And that’s in the short term. The longer-term benefits of having employees aligned with a strong sense of purpose are incalculable.

While I believe the understanding by most leaders of the need for a healthy culture has reached the tipping point, broad understanding of the power of purpose is about 10 years behind. That’s partly because there is a fair amount of confusion about around the true meaning of vision, mission and purpose. While just words, they are different. Vision and mission are mostly interchangeable but neither makes the definition of purpose. They are both what we ‘do’ and/or what we want to become. One client, Pentair, wants to be or become the next great industrial organization. That is what they call their mission, not their purpose.

Purpose is the highest-order contribution to society of what we do. It is our noble cause or why we deserve to exist. Pentair’s purpose, which fits for lines of business from swimming pool equipment to water purification for cities, is “To improve the quality of life of people around the world.”

Improving the quality of life of people is Pentair’s “why”. Senn Delaney’s purpose or why is to positively impact the world by inspiring leaders to create thriving cultures.

If you haven’t seen the very widely viewed video of Simon Sinek on the power of why, it is worth watching or re-watching.

At Senn Delaney, every employee from receptionist to consultants to the mailroom, has a personal purpose that ties to our overall purpose in some way. It’s a powerful motivator. I know that personally. The reason I am at it full time after more than 40 years and well past retirement is because of my purpose, which is to help an ever-expanding number of people live life at their best mentally, emotionally, physically and spiritually. When you connect to higher purpose work, it’s not work or a job, but rather a mission to serve a purpose.

Five key questions to consider to embark on the path to purpose-driven leadership

Leaders who want to embark on this path to a more inspired workforce and purpose-driven results can begin the process by considering these five key questions:

1. Does your organization have a purpose that fits the noble cause definition?
2. If so, do all the employees really understand it and see the connection?
3. Do you and others in your organization have a purpose and do they have a personal connection to that purpose and their role in living up to it?
4. Do your clients and customers clearly understand your purpose and what it means to them?
5. Are you willing to make hard decisions to remain true to your own and your organization’s purpose as Larry Merlo did?

A company’s purpose is never fully achieved. It’s not something to be accomplished and then checked off the to-do list. Rather, purpose becomes a true north on a compass guiding each employee’s daily actions.

As Larry Merlo at CVS Health said in announcing the end of tobacco sales, “This was the right decision for our company. There was a lot of discussion among the management team – it’s a real contradiction to talk about all the things we are doing to help people on their path to health and still sell tobacco products. It’s my job as the CEO to ensure that we’re positioning the company not just for short-term success, but for the long term, as well.”

Creating the purpose statement is not the hardest part, although it takes a right-brain heart versus head process to get there. The real challenge becomes truly living that purpose, even when billions in revenue is on the line. Courageous decisions are made by leadership that casts a long shadow, guided by high-performance core values and an unshakeable belief in the purpose.

Does your company have a purpose? Do you understand how that purpose relates to what you do each day to make a difference? What examples can you share about companies with an inspiring purpose? Please comment on social media on this important topic.

I wrote about the four reasons culture-shaping efforts fail in my previous post (Organizational culture has reached a tipping point, yet many culture change initiatives fail for four key reasons). But what makes them succeed? What makes some culture-change efforts successful where others become simply another ‘flavor of the week’ training session that never translates into real change? This is a subject of great debate and many theories exist.

As we looked for the common denominator of success in the hundreds of culture-shaping efforts we have led at Senn Delaney, the level of CEO ownership and personal engagement won hands down as a key success factor. That came as no surprise to me since the central finding of my field studies of culture for my dissertation 40 years ago was that organizations tend to become “shadows of their leaders” over time. This finding led to our first of four key principles of successful culture shaping, which we call Purposeful Leadership.

It is important to understand that there is a big difference between owning and being personally engaged in a culture transformation and endorsing or blessing the initiative. The all-too-common model is that the CEO announces the culture-shaping initiative and openly supports it and then over-delegates the process to others, usually Human Resources.

To be personally engaged in leading culture change, the CEO must:

• work on leadership behaviors that they need to shift in themselves and then show up differently to the organization
• lead his or her senior team through culture-shaping sessions and activities before any other teams take part
• take ownership of the work on defining the desired and needed culture and clarifying the organization’s purpose

Why Yum! Brands Chairman and CEO David Novak and USAA CEO Joe Robles are truly connected to the Shadow of the Leader concept

Yum! Brands CEO David Novak is an excellent example of a leader who has done one of the best jobs we have seen of understanding the phenomenon of leadership shadow and of intentionally casting a powerful one. David used a focus on creating a recognition culture to build Yum! from a spin-off of PepsiCo where it was failing to a global brand across 117 countries and 1.4 million employees with remarkable international expansion and more than a decade of double-digit earnings growth. He was honored as 2012 CEO of the Year by Chief Executive magazine.

David talks about shadow of the leader and the role of culture in creating a defining global brand in this Senn Delaney video.  

Another leader who has done a remarkable job of leading culture is General Joe Robles, CEO of USAA, a financial services firm serving military families. If you ask him what his job is, Joe he will tell you, “I am the Chief Culture Officer.” USAA has won some of the most coveted awards, including the highest customer loyalty, the highest customer satisfaction and the number one place to work in technology in America. USAA is also one of the top-performing companies in the financial services sector. He attributes the majority of that success to his focus on culture.

Robles talks about his role in leading culture in this matter-of-fact video.

Elements of purposeful leadership

Starting the culture-shaping process with the CEO’s team is a key part of purposeful leadership. A full list of elements in purposeful leadership in shaping a culture include:

• The CEO and senior leadership must own and lead the culture-shaping process.
• Leaders need to have a clear, compelling purpose for themselves and their organization, coupled with a strong business rationale to inspire a Thriving organizational culture.
• The process needs to be supported by resources and a systematic execution plan, like any other business strategy.
• Leaders cast a powerful shadow; therefore, the culture needs to be explicitly defined via values and behaviors and modeled by the senior team.

This last element in purposeful leadership also speaks to shadow since the senior team needs to define and model a set of values and behaviors they create. While most all organizations have a value set, many are outdated or incomplete in defining the culture they need to win today. Since a wise old axiom is, “If you can’t define it you can’t create it.” work on better understanding what culture is and what it should be is part of the role of the CEO’s team.

In future posts I’ll describe The Essential Value Set, which provides a framework for creating a healthy, high-performing culture, and discuss the other three principles of culture shaping.

Do you agree that the leadership shadow is important in culture change? What other aspects of purposeful leadership would you add to this list? Please comment below.

My fascination with culture began more than 40 years ago when another young industrial engineer named Jim Delaney and I started a process improvement consulting firm not long after graduating from UCLA. I quickly discovered that it was easier to decide on change than to get people to change. I observed that companies, like people, had personalities, and while some were healthy, most were like dysfunctional families. They had trust issues, turf issues and resistance to change. The difference between working with Sam Walton on the supply chain at Walmart and working with Woolworths was like night and day. It was clear one company would succeed and the other would fail because of the mindset and habits of the firms.

That led me to a professor at University of Southern California who had published a book containing articles that described a phenomenon called Organizational Character. Since I had clients, he convinced me to join the doctoral program and conduct research on the phenomenon. My dissertation, published in 1969, became perhaps the first field study ever of corporate culture at the organizational level.

[Watch this video with Larry Senn describing the evolution of culture shaping as a successful strategy to improve spirit and performance.]

A central culture finding

The central finding then, which holds true today, is that organizations become ”shadows of their leaders”. We knew early on that culture change had to start at the top. If the senior team didn’t collaborate for the greater good, then the organization would have turfs and silos. If they were too hierarchical and controlling, you’d find that culture from top to bottom. We found we could diagnose the culture but the challenge we faced was, how do you change habits of adults especially successful senior leaders?

Freezing and unfreezing habits

That led to a second breakthrough finding. I had a major life event that created some epiphanies that changed how I saw the world and changed some of my behaviors. My research into change through aha moments uncovered the work of Kurt Lewin, an early social scientist. One thing he said helped create Senn Delaney as a culture-shaping firm and enabled us to shape behaviors in new more powerful ways. He said “When we are young we are like a flowing river – and then we freeze.” His theory was that we get frozen into habits, and unless there is some form of unfreezing, we stay stuck. Lewin was also a believer in the need to treat not just the leader, but the team, the organization and the whole system. As a result, we began to experiment with insight-based learning modules for CEO teams around the behaviors in a healthy, high-performing leader, team and organization. We called those the Essential Value Set.

Up until then, almost all behavior change in business was based on a behavior change model defined by American psychologist and behaviorist B. F. Skinner. Define what you want and reinforce it. It is a sound model that we employed to reinforce change after the epiphanies, but not powerful enough for embedded habits.

Interest in culture shaping emerges

There was not much interest in culture shaping when we formally launched the firm in 1978. Our first clients were retailers that wanted to have what Nordstom or Walmart had. Nordstom had the ultimate in customer service, and in those days Sam Walton had a very efficient organization with his greeters and happy boxes. Retailers intuitively got that the customer experience was a cultural thing but generally thought it was a stores issue. We stuck to our guns and when asked to create a service culture, we would say, “Only if we can start with the CEO team since the stores are the children of the whole organization.”

Major changes surface the imperative of having a healthy culture. Divestiture and the breakup of Ma Bell in the phone industry led to culture shaping there. As Ray Smith, then CEO of Bell Atlantic and later Verizon, said, “If I put my ear on the track I can hear the train coming and we are not ready — we have to change or die.” Over time, more and more industries have faced change and thereby faced what we call “the Jaws of Culture”.

The tipping point

Organizational culture has reached a tipping point. Most CEOs know that culture matters and can have a strong impact on business results. Studies now confirm it is considered as important to success as strategy, and in fact it should be a strategy in and of itself. That is the good news.

The bad news is that despite this broad executive understanding of culture, and the many studies and books written over decades to demonstrate the link between culture and performance, the fact remains that too many culture change efforts still fail or fall short of their potential.

Why culture shaping efforts fail

We have shown through our work with more than 100 Fortune 500 CEOs and hundreds of companies around the globe that successful culture transformation is possible, and we have demonstrated along the way that there are four key principles that must be followed for this to occur. I will detail those principles in future posts, but for now I’ll start by touching on the major reasons culture-shaping efforts fall short.

1. It is an HR initiative and is not led from the top. HR has a critical role in making culture change work, but as General Joe Robles, CEO of USAA, the company with the highest customer loyalty in America, says, “I’m the chief culture officer.”
2. The process doesn’t create deep personal commitment to change. It is too intellectual and not transformational. It may create some understanding through such things as 360 surveys, but does not produce transformational ahas.
3. There are too many disconnected initiatives, and lots of activity, but culture is not clearly managed as a strategy. Every system and communication process needs to be aligned with a clear definition of the desired culture, which covers the Essential Values.
4. It is not taken from top to bottom in a way that creates momentum and mass. Cultures have antibodies and lives of their own. The process has to have the feel of “the train is heading North and you better get on.

While the awareness of the importance of culture has clearly grown over the last 40 years, these reasons continue to undermine the vast majority of culture change efforts.

Has culture reached a tipping point? Do you agree with these reasons why culture change efforts fail? What can you add?  Please provide your comments and feedback on social media.

Editor’s note: this is the initial post from Dr. Larry Senn.  See the following press release regarding his addition as a distinguished faculty member. We value his contribution to the history of the organizational culture field and the sharing of his insights to help others.

Photo Credit: Christian Guthier – FlickR photo modified with quote