Organization culture is a big intangible concept. And transforming cultures is even harder to grasp. Nevertheless, here is our six-step approach towards creating a learning organization with an iterative and experimental thinking at its core.
Having worked with tens of corporations in different phases of digital transformations we decided to pool our experiences and observations and share the results (PDF). Based on our experience there is a need for a framework of what are the key topics to address in a cultural transformation. Especially, a transformation towards a learning based, experimental and iterative culture.
A key observation we had made during our work was that there is often a gap between the top management’s change agenda and the grassroots’ desire for change. Therefore, we wanted to bridge this gap.
Many large organisations have an active culture change happening in the grassroots level: product owners, designers, developers, architects, project managers etc are changing the ways in which people think and behave. However, for a professional working on the trenches and vanguard of change it is sometimes hard to see what is required for change from the perspective of corporate management.
And vice versa. For the top executive driving for change it might be difficult to understand the daily work, thinking, and challenges of the change agents working in the front lines.
Therefore, our hope is that this simple infograph provides a shared language and framework to make the transformation a reality. Because no change will happen unless there an understanding in all levels.
Top Level Desire for Change
Nothing happens unless the leader (or leaders) in charge of the organisation sees a need for change and wants the change herself. Typically, this requires that the top executive and her management team take a leap of faith from traditional management principles towards a more experimental, iterative and learning based philosophy. Naturally this means that each individual takes these principles and considers what they mean for them as a professional and for their work and leadership. Typically, the following questions gauge how the executives see experimentation and learning in relation to traditional management & leadership.
- Do you see learning and experiments as an investment, or are they a cost to minimise?
- Is failure an inherent part in taking risks, and therefore, a good way to measure whether people are experimenting enough?
- How easy is it to give away decision making to others? Can you identify the few places where you should make decisions, and let others make the less important ones?
- If the budgeting cycle is one year, it is impossible to create an organisation that makes major decisions more often than annually. Are you ready to overhaul the way budgeting and investments are done?
- Once you accept that a new type of culture is required, how will you personally showcase experimentation, iteration and learning in the daily work you do?
A Strategy and A Vision to Follow
Once the leadership has a vision for the cultural change the next task is to communicate this vision and the strategy to get there. It is good to bear in mind that change is never a goal in itself. Change is required to reach a strategic goal, and a cultural change is required to create a certain kind of organisation culture. Therefore, the strategy and vision is not about the change as such. They are about the objectives the organisation has to achieve to remain, for example, competitive.
A good strategy and vision are understandable, functional and actionable. The world is full of strategies and objectives that are too vague or abstract, and that is often the reason that any learning based approach is difficult to implement. Learning, iterations, and experiments need a clear objective to pursue, otherwise they are empty tasks with no focus. As a checklist, here are some hard questions for the strategy to answer.
- How is the industry changing, and who is driving the change?
- Are you shaping the market or adapting to it? Why?
- Who do your customers want to become? What are the goals, strategies and objectives of your customers?
- What are your unique competences? At the end of the day, what are you uniquely good at?
- An actionable strategy has a clear focus. What will you do and what will you leave out? Why?
Supportive Structures
It is obvious that a good leader creates an environment that enables people to work towards the strategic goal. The next step in our foundation stones is to build some critical scaffolding to support the new ways of working and reaching the goal of the organisation. It is these structures that form the basis for the cultural transformation, because these structures have a huge impact in promoting new kind of thinking and doing. If the goal is to create an organisation where people value learning, iterative ways of working and experimentation, then structures such as governance models, investment principles, and guidelines for decision-making become the tools to make that change happen. Here are some questions to ask about the scaffolding.
- What are your decision-making principles? How are they made visible and usable to everyone?
- What are your organisation structures and reporting models to create the new culture?
- What are your measurements of success? What is celebrated and awarded?
- How do the governance models and portfolios support experimentation? Do they promote risk-taking and learning?
- What are your critical ways of working, tools, and operating models?
Capabilities and Competences
Like we mentioned above, structures such as governance models are only scaffolding to support and encourage people to think, act and work in a certain way. Therefore, the next critical step is to understand what are the capabilities and competences of the people to take the strategy forward in an iterative, experimental and learning-based way.
Some of the skills required are technical skills and process skills, but mostly they are about team working, such as, leadership, co-creation, and skills to focus on getting things done. Also, part of the capabilities is to identify major bottlenecks in change, such as legacy systems and infrastructures that hinder rather than enable change. Ask your management team the following questions to get started.
- Which legacy systems you need to work with? Which ones can you ignore and re-build from scratch?
- What kind of new people must you recruit? What is your strategy for recruitment and the “war for talent”?
- How will you level-up your existing experts and knowhow? What is your strategy for training and education?
- How mature is your design, development, and devops? Do you need new training or recruitments?
- What is the role of AI, data science, machine learning etc? Are they relevant for your strategy and how?
Spearheads, Pilots, and Ambassadors
Now you have planned your structures and identified the key competencies & capabilities. However, a cultural transformation doesn’t happen with powerpoints and some deep thinking. The new ways of working, governing, and decision-making must be adapted to the actual organisation. Rather than overhauling the whole culture overnight, you should experiment in a smaller sample, learn from that, and iterate.
Therefore, the next step is to launch and oversee strategic new initiatives that demonstrate to everyone how the new culture, structures and strategy work in practice. However, this is not only a demonstration. Treat it as the launch of the new culture, and the participants in these initiatives as your new ambassadors who take the transformation forward. It is these ambassadors who will gain and learn first hand what works and what doesn’t work about the culture, structures, capabilities, and strategy. Before launching, you might want to answer the following.
- Are the initiatives you launch strategically important to give them the muscle and priority they need?
- How will your spearhead teams adapt agile, design, and the lean startup philosophies?
- How big are your spearheads? What's your plan for creating innovation hubs and labs?
- What else are you doing? Are you organising outside hackathons, competitions, or sprints?
- How will you communicate the spearheads internally, to the outside world, to customers?
Scale Up and Organise Change
The steps above are the first steps towards your strategic goals and a transformation into a new kind of working culture. You might have done these steps in a one-day workshop, where you scratched the surface of all these topics. Or you might have spent half-a-year in implementing the changes. Either way, Rome was not built in a single iteration and now is the point to leverage the successes from your spearheads, gather learnings about all the changes, and to plan the next cycle.
Typically, at this stage, the change in itself becomes bigger and requires organisation work. In other words, the change initiatives turn into a proper change programme. Perhaps even a team of its own. However, keep in mind that this change programme must be founded on the principles of change it is promoting – there is a fundamental problem if the change for a new culture is ran as a traditional project. Before turning the next bigger wheel of change, ask the following questions.
- How will you communicate the results, success, and failures from the previous iteration?
- How will you communicate the change companywide? Why is the change done?
- Have you gathered learnings from the first round?
- Is this serious enough? Have you made sure that culture change is on the board members' agenda?
- Have you created goals, metrics and success criteria for the change?
You Made It! Now do it again
Congratulations. If you did all of the above, answered all the questions, and most importantly, adopted and adapted everything to your own expertise and vision, then you have begun the transformation. The thing about cultural change in a large organisation is that everyone knows that it is difficult and takes time. In our experience, the key is to have a clear strategy and the cultural transformation plan tightly coupled to that strategy. And the culture transformation plan in itself has to be iterative, experimental and focuses on learning. An organisation culture is such a complex and intangible creature that it can’t be addressed with strict and traditional ways of leadership.
Authors
Risto Sarvas is a service designer who has in the past years worked with corporations and their culture transformations He also works as an Adjunct Professor at Aalto University.
Sami Loikala is the Head of Customer Experience & Design at BearingPoint Helsinki. He has experienced, designed and implemented several corporate culture programs during his career.