The Journey at a Glance

The Journey at a Glance

In broad terms, your culture journey will look like this.

§ Assess
§ Define > Implementation - Behaviours, Symbols, Systems
§ Commit
§ Plan = Communication + Process Of Management



You first understand the culture you have, and its impact on your performance. Then you describe the culture you need, and the values which underpin it, and set goals for its achievement. You then build and implement a plan, based on behaviours, symbols and systems. Throughout, you must have a communication strategy, and ensure the process is managed with discipline and rigour.

Plan for three years to make a serious, measurable, palpable shift in your culture. Your will get movement in less time than this, but to start this process with less than a three year time frame is to risk your investment. A cultural transformation in a large organization will take longer than that.

This means three years from the time you make the decision to tackle culture in a conscious, funded and focused fashion. You have already been on this path for some considerable time
Most organisations that make the conscious choice to invest in the culture option have made a series of decision over previous years, which in themselves have moved the culture. In fact to be in a position to make a conscious decision about culture you have to have moved some way down the path of self-awareness.

A client came into his organisation as a CEO and immediately saw that there were a number of changes he wanted to make. His first three years as CEO was about making tough decision. He cleared out a lot of dead wood, he sold off several businesses, re-structured the company to give a greater line of sight with regard to accountability, at least in the senior levels.

But he still wanted to achieve more. He wanted to create a customer focus; he wanted to take his instinctive approach to accountability right through the organisation , he wanted to leave a cultural legacy that would live beyond him. We planned his three year journey with him from the time he made that decision.

A Typical Journey

There isn’t a cookie cutter formula for changing a culture. However, there are some elements which are essential for everyone. Think of these as phases, each will take a year or two; some organizations get through the first phase quickly and then take much longer on the rest. Or vise versa. It depends on the size of the company, the level of commitment, and the strength of your case for change. I’ll tell you a story of a company which transformed their culture in a period of around six years.

Lion is a drinks company with brewing, wine and spirits divisions across Australia, New Zealand and China. At the time of going to press (2004) they had a market capitalisation of around A$3.4billion, revenue of A1.8billion, profits of A$180m and 5000 employees. In the seven years since they started their work on culture, their TDR has increased by 180 per cent (15.8 per cent annualized) compared to a TSR of 99.8 per cent (10.1 per cent annualised) for the ASX200 Index, which contains the top companies on the Australian stock exchange.

TSR (Total Shareholders Return) is sum of the share price appreciation plus dividends, and generally considered a good measure of performance over a sustained period of time.

In this period they added A$42.2billion to their market capitalization. The growth in their performance closely parallels their improvement in culture.

Working with Lion Nathan since 1996 when the company started on this path, and our organisation introduced their staff to the mind-sets, methodologies and tools which started
them on their way. As they built on those foundations, we have been brought back in to play
other roles, or top up their learning. When speaking with different people we saw for the first time the whole picture of what they have done, and what have been the critical elements of their success. It was also apparent that this journey never ends they have plans for the next stage which are as ambitious as those they developed in 1996.

Talking from many people from Lion, I have walked alongside the cultural journeys of many organizations. There are few who have moved so far, so fast. I looked for the factors that made the difference. What was it about this approach that gave it the edge on so many of the others? Four factors made the difference in Lions journey.

§ Consistency
§ Focus on leadership
§ Link with the strategy and product
§ A mind-set of perpetual learning

The Journey Itself.
Looking back, you may have the impression the journey is a straight line. It doesn’t feel that way when you’re at the beginning. I want to describe the Lion experience because I think it will encourage you. From where you sit right now it may feel that you are not making much progress. As you will see, just taking one step is not making much progress. As you will see, just taking one step and then another.

My organization was brought in to help this process, and it was at this point that we first met the Lion Nathan team. Our first step was a workshop with the top team at which they defined values for the company, as well as holding the mirror up to their own behaviour.

The three values:

§ Act with integrity
§ Face reality
§ Passion for the business

Still stand today. Helping Lion Nathan design and run a series of Change Workshops, part of the Lion Nathan way for change this leadership programme introduced the company to the mind-sets and behaviours leaders would need to take this change forward.

The Programme included:

§ Personal responsibility (above and below the line)
§ For things to change first I must change
§ A 360-degree leadership feedback tool which distinguishes between constructive and defensive styles of behaviour

How Do Values Drive Culture?

Your culture work will give you new insight, into how organisations tick. Above all, it will teach you to see your world in terms of ‘cause’ and ‘effect’. As a leader of a cultural journey, you will learn to operate on the balcony and the dance floor simultaneously to observe what is happening and see both the underlying value-set that is driving what is occurring and how others are interpreting this action.

To lead culture change, you will need to know how values actually work and how they play out through the behaviours, symbols and systems of your organisation.


What are Values?
When you work with culture, you need to be very clear on what is meant by the word ‘value’ because you will be using it a lot. Logically the word ‘value’ describes exactly what a value is. It is ‘what we value’. What is important to us? As a society, we value ‘integrity’ we are likely to take actions which benefit the larger whole. On a closer examination, these values contain an ingredient which puts the whole ahead of, or at least alongside, the good of the individual.

But here’s the tricky bit. Through our behaviour we show that we actually place value on a different set of attributes. We say we value honesty, but we also value being liked, and through our behaviour we hold back from telling the truth if we feel it will make us unpopular – thus the verb ‘value’, which ultimately guides our actions, and has come to mean ‘that which is important to us’.

It encompasses a much wider set of attributes than those normally described as ‘values’. This is not an argument in semantics. It lies at the heart of the challenge leader’s face in influencing culture. Culture is the manifestation of what is rarely valued. If an organisation values being nice to each other more than they value honesty, their culture will reflect this and it will play out, for example, in the way performance reviews are conducted, We can sit here and argue that honesty is a higher order value than being nice, but this is just talk. The walk shows that being nice is more important.

It is more useful to use the word ‘value’ to embrace a broader set of attributes than would normally be the case. This line of thinking results in two types of values, the first set will be familiar to you, they are more characteristics that enrich and benefit the whole and which most organisations would like to value.

Enriching Values include: Performance, Customer focus, Teamwork ,Integrity ,Honesty, Safety,
Innovation, Doing what we say we will, Environmental awareness, Developing our people,
Risk management, Pursuit of excellence, Service, Relationships, Growth, Balance

This list is inspiring in terms of its ambition. It describes our desire to set standards around what is and is not acceptable. It develops a framework for how we should behave. These values usually benefit others as well as us, and are thus enriching values.

To understand the whole picture however we have to create another list. Another set of things that we value, that are important to us. These are not talked about as values, and yet we do value them.

We call them Selfish Values, which include: Money, Status, Independence, Staying out of trouble, Avoiding conflict, Power, Winning over others, Looking good, Keeping everyone on side,
Popularity, Control, Being right.

The first list benefits me, but also others. The second benefits me but potentially at the expense of others. Your organisations desired values will undoubtedly be drawn from the first list. But to understand how your organisation ticks, you have to understand how both sets play out to create the culture that correctly drives behaviour in your organisation.

Many cultures demonstrate that the second list is more important than the first. Others struggle to decide on which list to place profit, and believe it can belong on either. Contributing to the good of the organisation as a whole, rather than simply one's own personal gain, is a values-based approach. However, for some organisations profit has become the only real value, and can therefore be self-serving espcially for those who gain personally from its achievement.


A question to consider is: What would your organisation not be prepared to do in the name of profit?

What is Culture?

Culture is what is created from the messages that are received about how people are expected to behave. Cultures develop in any community of people who spend time together and who are bound together through shared goals, beliefs, routines, needs or values. Culture exists in nations, corporations, sporting clubs, schools, families, religious communities and
social groups.

Humans are tribal animals; we are hard-wired to fit in with our tribe. We read the signals about what it takes to fit in, and we adapt our behaviour accordingly. This is a survival strategy. If we cannot do this, we either leave the tribe, or the tribe rejects us. As we adapt to fit in with our new tribe, we in turn reinforce these tribal norms, or accepted behaviours, and thus reinforce the culture.

The process is supported by peer pressure. Existing tribe member’s work together to ensure that the new member does not rock the boat, and thus expose weaknesses in individual members. Behavioural norms evolve over long periods of time, and are influenced by many factors including the values or beliefs which brought the community together in the first place, the nature of the activity carried out by the group, past and present leaders and heroes, historical events, successes and traumas, physical and geographical conditions, the demands and behaviour of external parties customers, owners, enemies and many others.

We have observed cultures which lift people to operate at the highest level of their intellectual and emotional potential, where the group really does exceed the sum of its parts and individuals seem to become ‘better people’, contributing more, whilst simultaneously supporting the success of their colleagues. Such groups deliver extraordinary results from ordinary people. We have seen others which turn fairly normal and well-meaning individuals into selfish, political, backstabbing monsters.

Behavioural norms become subconscious, they remain long after their original purpose disappears, and eventually may not be particularly useful in relation to the goals the community is seeking to achieve. This is often the case in organisations, because established behaviour influences the behaviour of new members, therefore cultures perpetuate themselves. They require extraordinarily strong and focused leadership and/or a co-ordinated effort from a group of influential members to change quickly.

While behavioural norms may be subconscious, amongst existing members, new members notice them most acutely, but if they are to survive, they quickly adapt to the prevailing culture. Where members may be aware of the cultural tendencies, they rarely understand enough about their source, nor have sufficient confidence, power and determination to cause change. Holding ones own behaviour on a course which is at odds with that of one’s community requires great resilience, self-belief and mettle.

In the scheme of things in a work setting, and assuming the required behaviour does not go beyond a certain personal point of integrity, most people adapt to the norm. If you are used to a culture where everyone speaks their mind in meetings, and you arrive in a new organisation where the norm is not to do so, over time you are likely to speak up less frequently, you get tired of being the only one to object. You find colleagues use you and your outspokenness to further their own ends. Your voice becomes less credible, and you build a reputation for negativity. At this point, most people adapt, or leave.

Cultures are maintained through the messages that are sent and received about what behaviour is expected. These come from many sources, and most of these are non-verbal. An early myth to dispel is that an organisation’s culture has very much at all to do with the values statement, which appears in the Annual Report. Unless the organisation has worked very actively on living its values over a period of time, the statement will be one of intent. A very fine intent, and a good thing to have, but it almost certainly dose not describe the culture as it is.

So culture is about messages sent. These messages demonstrate what is valued, what is important, what people do around here to fit in, to be accepted and to be rewarded.

They come from three broad areas:

a. Behaviours – The behaviours of others, especially those who appear to be important
b. Symbols – observable events, artifacts and decisions to which people attribute meaning
c. Systems – mechanisms for managing people and tasks.

Two things to remember from this:

Culture is about messages – culture management is about message management. If you can find, and change, enough of the sources of these messages, you will change the culture.

Culture is about what is really valued – demonstrated through what people do, rather than what they say. When the walk and the talk do not line up, it is the walk that shapes the culture.

Read more on culture and how to approach integrated culture change.

FORTUNE ‘Best 100’ Gives Nod To Human Capital Risk Management

For decades business leaders have been sceptical of the role culture plays in reducing the risks associated with human capital. FORTUNE magazine, however, recently featured the ‘100 best companies to work for’ who have provided a higher return than the S&P 500 over seven years, showing a positive relationship between a strong, affirming culture and performance.

Until now, the biggest challenge has been measurement of human capital management. Unlike revenues and profits, ‘soft’ data is difficult to compile and interpret and few measures are softer than customer and employee mindsets or satisfaction. As a result, many companies have not been willing to invest the time, energy and resources to do it effectively. However, a few business leaders are challenging the status quo with results suggesting nonfinancial measures can be every bit as rigorous and tangible as financial ones. For instance, former CEO of Westpac Dr. David Morgan attributed a great deal of Wesptac’s success to his investment in human capital. The results speak for themselves: Westpac’s staff turnover fell from 17 to 14 percent in five years which translated to a $50 million cut in recruitment costs. Sears Roebuck and Company (with a 4% increase in employee satisfaction) gained an extra $200 million in revenues. Virgin Airlines also contributes the secret to their success to culture in stating: “They can copy our planes, they can copy our fares, but they can’t copy our culture” and, as Brett Godfrey, CEO, says “While business strategy is an important factor, it’s the way our team members deal with dramatic changes on a day-to- day basis that is the determining factor for success or failure. Basically it comes down to our corporate culture.”

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Not one of us, Mate! Diversity - Changing Mindset

There is a severe skills shortage in the Western World, driven by demographics. Clearly the talent pool needs to be deepened, but the question is how.

And it is not just a matter of recruiting talented people in all their many permutations; it is also a matter of how an organisation can create an inclusive environment and culture in which diverse people flourish and stay. Rene Nathan, Executive Coach consults to Mettle Group on Diversity in the Workplace – its not just about Gender and spoke recently on this topic at the AIM (NSW) Leadership Special Interest Group.

It is apparent to me that in order to create such an environment we need to address the obstacle of exclusion. This reveals itself in behaviours that are largely unconscious and hard wired by long social practice. These unconscious drivers of exclusion are powerful and are difficult to address and change unless they can be explained in a way that is rational, unemotional and clear. In this article I propose not only a way of ‘seeing’ the dynamics of exclusion at work, but also how organisations can address the issue and effect change in behaviours, mindset and the culture from one of exclusion to one of inclusion.

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The Neuroscience of Leadership and Culture

We live in a world that at last is attempting to learn between disciplines: religion informing science, science informing business, business informing psychology, psychology informing marketing, marketing informing technology, among others.

A few years ago, Daniel Goleman, the author of Emotional Intelligence and many other leadership books, gathered together a group of physicists, Buddhists, psychiatrists and neuroscientists so that they could learn from each other about how the mind works. Each year in Australia well-known CEOs and board members gather for two days in retreat with Sogyal Rinpoche (author of The Tibetan Book of Living and Dying) to learn about the Buddhist philosophy, focusing on how to calm their minds more effectively so that they can think more innovatively and be more effective leaders for their people.

Harvard and Insead Business Schools talk about the two most potent tools of the 21st Century being intuition and meditation. The Harvard Business Review writes about executives and their new attention deficit trait—overloaded circuits in their minds. With the use of functional MRI and other technologies, we are able to glean more information about how the mind works, helping us to understand how behaviours can be changed and innovative thinking can be improved in our organisational cultures.

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Human Capital Measurement and the ASX Top 50 - How do you rank?

The quality of Human Capital Management (HCM) disclosure was the subject of a recently completed research project, reported in The Australian Financial Review today. The project looked specifically at how Australia's 50 largest ASX-listed corporations reported on how they managed their people in 2007.

The results show great discrepancy between the top performers and those companies that are yet to see value in reporting on measures succh as staff satisfaction, culture, personal development and leadership competencies/attributes.

Form companies that managed to get a handle on what has traditionally been referred to as a 'soft' and 'feel-good' exercise, the pay-offs are very real. Employess look to HCM disclosures for assurance about the type of workplace a potential employer provides and investors have begun factoring HCM disclosures into their decision making.

There is much evidence to support the impact of nurturing the 'soft' skills has on the financial performance, i.e.

• "Happy staff equals happy customers equals happy shareholders. Staff turnover at Westpac has fallen from 17 to 14 percent in the past five years, which translates to $50 million cut in recruitment costs and is reflected in fewer sick days and better productivity. Seven years averaging 11 percent compound earnings-per-share growth and returns on equity averaging 20 percent, tell you that CEO Dr David Morgan has performed." The AFR, 13 April 2006


• "Fortune 100 'Best companies to work for' have provided a higher than the S&P over seven years, showing a positive relationship between a strong, affirming culture and performance." Great Place to Work Institute & Frank Russell Company, 2005 - The Fortune '100 Best Companies to Work For'


• Other evidence can be found at: http://www.mettle.com.au/our_approach/default.aspx

How does your company manage its Human Capital and do your report on your HCM?

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An M&A Culture Due Diligence Solution: It’s not just the wedding, it’s the marriage

Hearts and Minds - The Key to Successful Mergers

The merger and acquisition (M&A) boom of the last few years shows few signs of easing up. Most acquirers have the wherewithal to continue making deals and paying fat premiums. The implication however is clear: the executives doing the deals are bullish that they can realize synergistic value.”

Many observers and many independent studies question whether M&A’s truely add value. Executives also point to the unfulfilled realisation of synergies. Only half of the senior executives polled in a 2006 Intelligence Unit survey believed that their companies had achieved the revenue synergies they had expected from their M&A activities, and just 45% affirmed that expected cost synergies had been captured.

Although acquirers are getting better at identifying and capturing synergies, many deals still do not recover their acquisition premiums and others fail to achieve the long list of benefits touted by management as the rationales for doing the deals in the first place. Some of these failures are clearly the result of overpaying for targets, but others are due to an incorrect understanding of what exactly synergies are, and how they should be captured. There are several factors that are easy to overlook, or under-appreciate when deal-making and emotions run high...

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M & A's: Making the marriage last

The corporate world is littered with M&As that have crashed and burned for failing to consider one crucial element: corporate culture. Iain Hopkins investigates why this eternal intangible is so important.

Despite countless organisations spruiking the motto, 'our people are the key to our success', it's interesting to note that when it comes to major corporate upheavals such as M&As, the people are often neglected. It's assumed everyone will simply go along for the ride, wherever that ride may be heading.

According to research by A.T Kearney, organisations neglecting this aspect of their due diligence are destined for failure. Of 115 global M&A deals researched, failed merger integration was not due to poor operational, financial or commercial planning. Instead, one of the top reasons for failed mergers, cited by 35% of respondents, was cultural differences and how they were addressed in the integration process.

what can go wrong?

Simon Mezger, vice president, strategy practice at A.T Kearney, notes that there are three major pitfalls that organisations fall into when it comes to M&As. Firstly, he says that in the lead-up to Day 1, there is a huge focus on business continuity, which tends to be independent of culture...

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How are Engagement Survey's different from Cultural Survey's

There is a costly confusion between measuring climate rather than measuring critical components of corporate culture. Engagement scores and employee opinions surveys essentially measure how happy employees are with the organisation. Employees happiness is an important but not sufficient ingredient for executing the strategy...

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Culture can be nurtured...and must not be purely organic

One of the biggest mistakes organisations make around culture is assuming culture is purely values. Culture will change over time to suit your strategy which changes to suit market trends and so forth. Your company values on the other hand do not change - they are the companies core purpose for existing.

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How Systems and Structure Link to Culture

Its official…systems and structures must link to corporate culture – but how do you do it and what does this really mean to business... and, why do so many companies get it wrong?

"Culture is about how things are done around your organisation" says Heather Carmody, Director Mettle Consulting. Your culture and your organisational structures are not mutually exclusive.

It is a common perception that culture is intangible, something "just" in people’s heads’. As Catherine Glass, Director Mettle Consulting UK says, "to ignore culture is to ignore another tool you can use to drive your business." As such, being able to understand and utilise your organisation’s culture is crucial in developing effective business strategy to drive your competitive advantage. Mettle has developed tools your organisation can use to understand, analyse and shift the cultures inherent to your organisation...

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Designing a culture to attract, retain and develop talent

As leaders, we are responsible for ensuring the culture is established and maintained in such a way that we attract, retain and develop talent that will not only stay and commit to the organisation, but will also achieve the strategy. What then does it take to do this?

Retaining current staff through your culture, supported by structured programs to build the capability of existing human capital, allows organisations to control reward blow-outs, recruitment costs, and maintain consistency and quality of service. In effect, it is up to HR to play a critical role in executing the organisations strategy and developing and attracting talent. However, everyone in the organisation needs to be made aware of the important role they play in identifying and nurturing talent within. Talent management is critical in ensuring an organisation meets its end goals.

The true costs of losing talent through poor management or lack of nurturing are numerous. These can include impact on client relationships, recruitment, training costs, induction programs, workplace morale and overall effectiveness...

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How to Make Good People Great Leaders…and Reap the Rewards

A speech by Craig McCallum, General Manager Marketing at Mettle Consulting presented at the Australian Insitute of Management Leadership Special Interest Group that outlines how people can become great leaders and reap the rewards. A fantastic insight into some practical ways every day people can lead.

Why is it that we are so infatuated by the term leadership? Why do we find leadership so interesting, so challenging, so difficult, so inspiring? Thousands of companies, including many that are represented here tonight, spend millions of dollars on leadership development – only to get luke warm results…Why? Is it because they rely on leadership competency models that identify generic traits such as vision, direction and energy, for example, then they attempt to find and build next generation leaders who fit this model? One key criteria of leadership for you to perhaps consider as managers and leaders is the building of a leadership brand within your organisation that encourages people within your organisation to live the brand of the organisation and learn leadership styles and behaviours that are aligned to the promises the organisation makes to its customers, thus enabling leaders to respond to company centric challenges...

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Purpose of this blog

Leadership is a topic that receives a lot of attention - numerous people who have opinions and vast amounts of experience of what 'leadership' is and what it takes to be a leader. The purpose of this blog is to discuss these ideas and concepts and to look at how they work for you and others.

I would like to see this blog be used as a forum where people can post and share ideas on:

1. Leadership challenges
2. Concepts that worked or did not work in improving self or others leadership
3. Debate leadership concepts, tools and methodologies
4. What people are doing to improve their leadership
5. What others expect of leaders
6. How leaders deliver on their promises
7. Much much more

I invite you to join this blog that will be updated regularly by members with articles, commentary and suggested readings. Look forward to blogging with you.