To change or not to change (and what) – Dealing with organisational culture in the context of a Target Operating Model

The 5 key contexts of Strategic Business Architecture series continues with a fresh look on how Strategic Business Architecture plays a critical buffering and enabling role between the internal company context and its Target Operating Model. Subtly adjusting critical aspects of underlying organisational culture gives the optimal Target Operating Model its capability and agility to deliver expected economic results through the people side of Transformation & Change equation.

Corporate culture goes beyond corporate slogans such as ‘focus on our employees, focus on our clients, focus on our company’. It permeates the very fabric of every organisation in ‘the way things are done around there’ and often transcends national cultural stereotypes. While national cultural attributes – i.e. Anglo-Saxon vs Latin way of handling human interaction in workplace will undoubtedly be present locally, other cultural aspects will spread company-wide. Sometimes also called ‘corporate behaviours’, such as whether conventional wisdom and boss’ authority can be challenged, or whether team engagement is promoted over individual ‘maverick’ performance, these corporate traits travel from London to Washington to Shanghai.

And it is good that they travel, often carried through visible behaviours displayed by company executives and by word-of-mouth. Having common corporate culture, behaviours and attitudes make it much easier to unite teams around overarching corporate objectives, move people around and across continents, and to cascade and cement change. Therefore, when architecting a Target Operating Model, one major challenge to tackle is what corporate cultural traits should be fostered and embedded everywhere and which should be visibly discouraged from taking hold. In other words, a great deal of thought ought to go into which corporate behaviours are ‘desirable’ for meeting organisation’s strategic objective and which are less so.

A word of caution – let us not confuse personal, individual culture and behaviours and corporate ones. They are not the same at all. Some companies feel reluctant to tackle behaviour challenges for fear of intruding on ‘personal territory’ – it is not that. Corporate behaviours are distinct from personal traits and can – and should – be successfully fostered to further organisational objectives.

When it comes to Target Operating Model design, many of the desired organisational cultural traits and behaviours will be fairly straightforward to identify. For example, a matrix organisation with distributed decision making will benefit from sharing and collaborative behaviours more than verticalised stand alone one. As in practically everything, less is more and fostering just five or six key desirable behaviours arising from the Target Operating Model will go a long way to ensure its successful functioning.

Naturally, starting with a clean slate, one can focus solely on desirable behaviours and build those. In reality, most Transformation & Change efforts will have to take into account pre-existing organisational culture, memories and experience. An insightful discussion with an internal HR subject matter expert will help to identify what they are.

From there, a Kaizen inspired approach is useful to to deal with what organisational traits we need to develop further in order to succeed vs organisational propensity to accept them. The figure below identifies two dimensions – Organisational cultural traits/behaviours of architectural significance and Organisational willingness to keep/pursue their development. It a classic 2×2 format, it attaches (H)igh and (L)ow extremes to each. Naturally, the heading of each axis can be modified to suit analysis need.

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Once the desired behaviours are placed in one of the matrix quadrants, it becomes much clearer as to what course of action should be taken with regards to that particular cultural trait:

  • Traits which are important architecturally and existing organisational culture strives to keep or proactively pursue are the ones to anchor and promote further. These are quick wins in the change management agenda, and should be re-emphasisied as such. The ideal situation is when most of the desired and pre-existing behaviours are in this quadrant – unfortunately, this happens only rarely.
  • The most sensitive situations occurs when architecturally significant behaviours meet with organisational resistance to pursue. Care must be therefore taken to understand stakeholder concerns while proactively challenging their reluctance to accept new traits. If organisational cultural concerns are not addressed, no desired behaviours residing in this quadrant will be successfully embedded.
  • Behaviours and traits that are important organisationally but not architecturally should be kept going as they provide a sense of stability in the transformation journey when many things change at once.
  • Hopefully, there will be no behaviours in the fourth, low priority quadrant. If there are, they can be safely ignored or even removed from Change Management agenda.

Taking into account pre-existing organisational context will create a Target Operating Model which is realistic in cultural scope and functional in its implications and implementation. Many transformation efforts fail because of people side of equation, and paying attention to corporate cultural traits and desirable organisational behaviours will help to minimise the risk of failure.

Finally, one note on enforcement. The organisation will both read the statements and watch its leaders but it will always follow its leadership example. So if new cultural traits are not supported by decisive leadership action, nothing will change further down the ranks. The new Target Operating Model may still work, but it will be severely handicapped.

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Does this article resonate with you? I would like to hear what you think – you are welcome to leave a comment or send me a message from my Contact page.

This article also appeared on the www.architectureofbusiness.com.

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