“Performance more often comes down to a cultural challenge, rather than simply a technical one.”
Lara Hogan
The Economic Importance of Conversations
Where do your employees learn the most? The boardroom, seminar room or at training sessions? Or could it be in the hallways, cafeterias, coffee stands, water dispenser stands or around their desks? Or from phrases used by their executive leaders? Whichever way we look at it, followers are great imitators of their bosses, and their everyday words and phrases set the foundation for the organisation’s culture and how well your organisation will perform. This is equally true for individuals, what you say daily determines what you become.
Lessons From IBM
IBM is a world-leading technology company founded by Thomas J. Watson in 1911. It was the pride of America. However, in the late ’80s and early ’90s, everything began to go wrong for the company. They were mounting losses upon losses. Their share price nose-dived so also did their market share. Their collapse seemed imminent. “What exactly is wrong with IBM?” everyone asked. IBM did not lack sound strategy, vision, resources or highly skilled workforce but things seemed to be working against them. In 1993, IBM hired a new CEO, Louis Gerstner from Nabisco (producer of Cookies) to manage the largest and the most complex technology company in the world after tech guys like Apple’s John Sculley, Motorola’s chairman George Fisher, and Bill Gates of Microsoft declined interest in the job.
Louis was hired because of his impressive record of success. When Gerstner started at IBM, he did not know it then, but from interactions, he came to realise that a culture of individualism and unnecessary non-conformism was prevalent at IBM. Everyone put themselves first with the language “I”. IBM was built on this individualistic culture, but changes in customer behaviour required a different approach where silos are broken down, and team spirit was promoted. He knew that the difficult task of ensuring a culture change at IBM was necessary. In his book Who Says Elephants Can’t Dance, he stated that “Culture isn’t just one aspect of the game; it is the game”. He was persuaded that a turnaround success was only possible at IBM if there was a radical transformation of the culture and without which the company was headed for self-destruction.
In the spring of 1994, Louis convened a meeting of 420 top managers of the company. At the meeting he presented two charts to them — one on customer satisfaction and the other on market share. The chart for market share showed a loss of more than half of the market share within 8years. The chart on customer satisfaction portrayed a depressing outlook. He later showed them the photos of CEOs of top competitors, Bill Gates of Microsoft, Scott McNealy of Sun Microsystem and Larry Ellison of Oracle. The pictures represented the faces of the “bad” guys who were slicing their market share. To drive home his point, he read out the statement credited to Larry Ellison who said “IBM? We don’t even think about those guys anymore. They’re not dead, but they’re irrelevant.” If that statement was not painful and depressing, then what could be more painful? Is your culture gradually pushing you toward the precipice of irrelevance? How do you recognise them and what should you do about it?
Why Organisations Overlook Culture
IBM was once first among equals (perhaps it will be right to say that at a time IBM had no equal) How did IBM find itself in that haemorrhaging situation despite having the best talents, a great strategy, mission statement, core values, and incredible assets? IBM became a company without any foreseeable future. In their book, Computer Wars Charles Morris and Charles Ferguson stated: “There is a serious possibility that IBM is finished as a force in the industry… the question for the present is whether IBM can survive. From our analysis thus far, it is clear that we think its prospects are very bleak.” Bill Gates, the founder of Microsoft, was quoted to have said that IBM ‘will fold in seven years.’
When things are going wrong, it is typical for executives to immediately begin to dig around the most natural indicators of organisation problems: corporate strategy, capacity development, performance measurement, sales and so on. Often, culture is overlooked for a variety of reasons:
- Past Success Syndrome: statements like – “it is how we do things here; it is what brought us this far and has given us a competitive edge” will hold any organisation down for long.
- Change is Difficult: the second reason is the excuse that culture change is usually problematic and difficult to identify and change.
- Leaders’ Bias: the third reason is the unwillingness on the part of the leaders. Because most times the culture is a direct reflection of the leaders’ attitude, style and tone. Therefore, except the change begins with the leader, every effort for cultural transformation may be an exercise in futility.
Getting the IBM Elephant to Dance
Louis Gerstner recognised that the power of language could become a catalyst for culture change in the organisation. To win the game at IBM, Louis apart from overseeing a cut in the overhead costs, selling assets, he changed the existing tones and the phrases used at IBM and ensured personal business commitments from each employee. He said “I’m a strong believer in the power of language. The way an organisation speaks to its various audiences says a lot about how it sees itself”. So how did he change the language at IBM? He appealed to the emotions of IBMers and used the derogatory words of Larry Ellison to spur them into thinking differently. He was passionate in his speech and its delivery. Going forward, he demanded a complete overhaul of the narratives in IBM (some of the terms in IBM vocabulary are terms as “take it offline,” “hard stop” and “pushback”)
Most of the choice of words that found their roots in the founders of the organisation needed to change because they had outlived their usefulness. IBM’s return to profitability took place within 6years, and market capitalisation rose from $29 billion to $168 billion. IBM’s turnaround was reputed to be one of the greatest turnarounds in corporate history.
How to Change Your Organisational Vocabulary
Watch out for everyday jargon in your organisation, what do you say as an executive, what language and tone do your employees use when they gather informally around the water dispenser, restroom, cafeteria, coffee stands, dinner meetings, employees’ desk or even along the walkways?
- Change “if “to “when”: Louis addressed the Managers and said, “There are no ifs in my vernacular, we are going to do it. We’re going to do it together”. There is usually a positive association with “when” rather than “if”. Begin to use “when” in your culture narratives for set goals.
- Change “later” to “when”: Procrastination usually means that critical issues are left unattended. Inculcate a sense of decent urgency, and impeccable prioritisation of tasks in the culture of your organisation. A common phrase in organisations is “I will get back to you”, and most times you never get to hear back from them until the issue is swept under the carpet. To overcome this, ensure there is a definite time for getting back. Therefore, the culture should be “I will get back to you by 10:00 am tomorrow” and ensure that both parties key the said time immediately into their calendar. The rapidity in the age of continuous and rapid disruption does not allow for a lackadaisical attitude.
- Change problems to solutions: Organisations spend an enormous amount of time on needless analysis of problems which breeds an analysis paralysis and an unnecessary magnification of problems. Change the narrative in your organisation to a solution-focused culture rather than problem-oriented sentiments. Many individuals are gifted in problem identification but very few talk about solutions. Avoid problem identification paralysis; encourage your employees to speak and breath solutions.
- Formulation to Execution: Execution is the major bane of many organisations. The death kernel of many failed institutions is not lack of strategy. They are good in strategy formulation but poor in execution that is, translating their strategy into actionable projects and measuring the results. Execution needs a detailed and deep understanding of the strategies, uncomplicated and well-structured process that carefully articulate where the organisation is now, how it plans to get to where it will be in the future. The culture must support an attitude for execution of plans and strategies.
- Change “I” to “We”: The language culture in the organisation should break down silos that will lead to unnecessary compartmentalisation and individualism. Louis told his managers “this is going to be a group of change agents—people who are imbued with the feeling of empowerment and opportunity, for ourselves and all our colleagues. Those of you who are uncomfortable with it, you should think about doing something else. Those of you who are excited about it, I welcome you to the team, because I sure can’t do it alone” Promote and reward policies and practices that facilitate team cohesiveness. The language to be encouraged should be “We made it happen” rather than “I did it”.
Conclusion
Language plays a significant role in shaping organisational culture. To ensure a culture change, leaders must communicate the change with conviction and passion and be willing to lead by example. If you do not employ the right words or phrases in your organisation, the poor language culture may undermine performance, limit potential and invariably erode the hard-won legacy.
