Shaping Corporate Culture: For Sustainable Business Success 3662653265, 9783662653265

Table of contents :
Preface
Contents
List of Figures
List of Tables
1: Corporate Culture: The Central Success Factor
1.1 What Is Corporate Culture Anyway?
1.1.1 In-Depth Illustrations of the Concept of Corporate Culture
1.1.2 Functions of Corporate Culture
1.1.3 Where Are the Starting Points?
1.2 When Is a Corporate Culture Good?
1.3 Corporate Culture as a Success Factor
1.3.1 A Strong Corporate Culture Leads to Financially More Successful Companies
1.3.2 Corporate Culture as the Most Important Cause of Corporate Success
1.4 What Are the Drivers of Corporate Culture?
1.5 New Approaches to Corporate Culture
1.5.1 Behavioural Economics Approaches
1.5.1.1 Cooperation and Feedback as the Key to Optimising Corporate Culture
1.5.1.2 Trust as the Key
1.5.1.3 Role Model Function of Managers
1.5.1.4 The Importance of Peer Feedback
1.5.1.5 Nudging or Positively Intended Influence
1.5.2 Neuroscience Approaches
1.6 Good Practices Make the Difference: An Analogy
1.7 To Get You in the Right Frame of Mind: How Important Is Corporate Culture Management to You? A Self-Test
1.8 The Path Is Worthwhile: Create the Corporate Culture with Which You Will Become Successful in the Long Term
1.9 Key Points
References
2: Corporate Culture Can Be Shaped
2.1 On the Dynamics of the Phenomenon of Corporate Culture
2.2 Simultaneity of Different Corporate Cultures
2.3 Ambidextry: Consciously Using Different Parallel Corporate Cultures
2.4 Integration and Adaptation: Central Approaches to Developing Corporate Culture
2.5 On the “Feasibility” of Corporate Culture: Systemic Reservations and the Courage to Act
2.6 Key Points
References
3: Architecture of Corporate Culture: An Operational Design Approach
3.1 Meeting the Complexity of Corporate Culture Through a Systematic Approach
3.2 The Integrative Corporate Culture Architecture Model
3.2.1 The Strategic Level: Vision and Strategies
3.2.1.1 Focus: Vision
3.2.1.2 Level: Strategy
3.2.1.3 Approach: Mindset
3.2.1.4 Prerequisite: Common Values
3.2.1.5 Methods: Mission Statement, Audit and Strategy
3.2.1.6 Success Tendency
3.2.1.7 Effect
3.2.2 The Action Level: Measures and Processes
3.2.2.1 Focus: Selected Areas of Culture Change
3.2.2.2 Level: Action
3.2.2.3 Approach: Behaviour
3.2.2.4 Prerequisite: Direct Approach in the Area of Responsibility
3.2.2.5 Methods: Culture Change Processes and KPIs
3.2.2.6 Success Tendency
3.2.2.7 Effect
3.2.3 The Level of Reflection: Culture Hacks as a Constant Compass
3.2.3.1 Focus: Lived Everyday Life
3.2.3.2 Level: Reflection
3.2.3.3 Approach: Mindset
3.2.3.4 Prerequisite: Clarity and Courage
3.2.3.5 Methods: Culture Hacks
3.2.3.6 Success Tendency
3.2.3.7 Effect
3.3 An Approach to Shaping Corporate Culture: The Culture Excellence Process
3.3.1 The Individual Phases of the Culture Excellence Process
3.3.1.1 Model Development
3.3.1.2 Audit Concept
3.3.1.3 Maturity Model
3.3.1.4 Strategy Development
3.3.1.5 Method Selection
3.3.1.6 Implement & Control
3.3.2 The Culture Excellence Process as a Central Management Tool for Shaping Corporate Culture
3.4 Key Points
References
4: Developing Your Own Culture Model
4.1 Why Is a Model Essential for Discussing Corporate Culture?
4.2 Brief Synopsis of Different Corporate Culture Models
4.2.1 Development-Oriented Models: The Graves Model
4.2.2 Generic Models: Denison’s Organisational Culture Model and the OCI Model
4.2.3 Problem-Based and Specified Models
4.3 Developing Your Own Model of Corporate Culture: Integrating Different Perspectives
4.3.1 Taking Account of Different Perspectives
4.3.1.1 The Perspective of the Company as a Whole
4.3.1.2 The Company as a System of Value Adding Activities
4.3.1.3 High-Performance Organisation as a Result of Individual and Collaborative Value Adding Activities
4.3.2 Integration of the Views: Basis of the Own Corporate Culture Model
4.4 The Culture-Diamond-Model: Procedural Concept for the Identification of the Own Corporate Culture
4.4.1 An Example: Recording Culturally Relevant Factors
4.4.1.1 The Culture Diamond Model: Company Perspective
4.4.1.2 The Culture Diamond Model: Internal System Perspective
4.4.1.3 The Culture Diamond Model: Individual Perspective
4.4.2 An Example: Condensation to Company-Specific Culture Factors
4.5 Alignment of Corporate Culture with Corporate Strategy
4.6 Key Points
References
5: Analysis and Diagnosis of the Corporate Culture
5.1 The Corporate Culture Audit: On the Term and Concept
5.2 Survey and Evaluation
5.3 Derivation and Prioritisation of Objectives
5.4 An Example to Illustrate
5.5 Key Points
References
6: Corporate Culture in the Maturity Model
6.1 Meaning and Function of Maturity Models
6.2 Concept of the Maturity Model
6.2.1 Stages in the Maturity Model
6.2.2 Options for Carrying Out the Determination of the Degree of Maturity
6.3 Procedure Model for Strategic Positioning
6.4 Example of a Maturity Model for Corporate Culture
6.5 Key Points
Reference
7: Development of Corporate Culture: Strategy Generation
7.1 Systematics for the Development of Strategies
7.1.1 Generic Strategies
7.1.2 Specific Strategies
7.2 Strategy Options for Cultural Change
7.3 Controlling the Strategy Premises
7.4 Key Points
8: Methods for Cultural Development: Levels and Measures of Intervention
8.1 Use of Interventions and Methods in the Architecture Model
8.1.1 Mindset and Behaviour: The Strategic Level of the Architecture Model
8.1.2 Moving from Strategy to Action: The Operational Level of the Architecture Model
8.1.2.1 Putting Corporate Culture into Practice: Culture Lives in Everyday Life!
8.1.2.2 The Procedure Model for Sustainable Implementation
8.1.2.3 Working Out the “Why”
8.1.2.4 Working Out the “Where To”
8.1.2.5 Working Out the “Where From”
8.1.2.6 Schematic Representation
8.1.2.7 Implementation in Daily Practice
8.1.3 Culture Hacks: The Punctual Level of the Architecture Model
8.1.3.1 What Are Culture Hacks?
8.1.3.2 An Urgent Warning Beforehand!
8.1.3.3 Culture Hacks in Daily Use: Some Examples
8.1.3.4 Culture Hacks: The Link Between Mindset and Behavior
8.2 Classic Approaches to Changing Corporate Culture
8.3 Recent Approaches to Changing Corporate Culture
8.3.1 Interventions and Methods: A Characterisation
8.3.2 Suitability Potential for the Own Company
8.4 Key Points
References
9: Setting Up Culture Change Projects the Right Way: Implementation and Controlling
9.1 Determine Procedure Concept
9.2 Evaluate Interdependencies Between Measures
9.3 Moving from a Portfolio of Methods to a Roadmap
9.4 Install Project Management
9.5 Measure and Evaluate Implementation Success
9.6 Ensure Roll-Out
9.7 Collecting and Processing Learnings
9.8 A Warning and Encouragement at the Same Time!
9.9 Key Points
Reference
10: Integrative View: The Concept of Culture Excellence
10.1 The Individual Building Blocks of Culture Excellence
10.2 Integration of the Individual Building Blocks into the Concept of Culture Excellence: Approach and Advantages
10.3 The Cultural Design Process as a Recursive Model
10.4 Key Points
Reference
11: Don’t Fail in the Culture Change Project: Do’s and Don’ts
11.1 Why Is Shaping a Corporate Culture a Sensitive Undertaking?
11.2 Do’s: These Approaches Promise Success
11.3 Don’ts: It’s Best to Avoid These Practices
11.4 Key Points
12: The Special Role of Leadership
12.1 Importance of Leadership: Leadership and Management
12.2 Role Model Behaviour as the Most Important Influencing Factor in the Development of Corporate Culture
12.3 Management in a Sandwich
12.4 Who Is a Role Model in the Democratic Enterprise?
12.5 Key Points
References
13: Living Corporate Culture
13.1 Forming Habits
13.2 Reflecting on the Corporate Culture in Everyday Life
13.3 Allowing Corporate Culture to Be a Dynamic Development
13.4 Corporate Culture: Between a “Never Ending Story” or “Life Still Offers Many Exciting Moments”
13.5 Consciously Celebrate Corporate Culture: And Develop Pride
13.6 Key Points
References
14: Challenges to Corporate Culture: Today and Tomorrow
14.1 What Are the Future Challenges for Corporate Culture?
14.2 Key Points
References

Citation preview

Josef Herget

Shaping Corporate Culture For Sustainable Business Success

Shaping Corporate Culture

Josef Herget

Shaping Corporate Culture For Sustainable Business Success

Josef Herget Excellence Institute Wien, Austria

ISBN 978-3-662-65326-5    ISBN 978-3-662-65327-2 (eBook) https://doi.org/10.1007/978-3-662-65327-2 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer-Verlag GmbH, DE, part of Springer Nature 2023 This book is a translation of the original German edition „Unternehmenskultur gestalten“ by Herget, Josef, published by Springer-Verlag GmbH, DE in 2020. The translation was done with the help of artificial intelligence (machine translation by the service DeepL.com). A subsequent human revision was done primarily in terms of content, so that the book will read stylistically differently from a conventional translation. Springer Nature works continuously to further the development of tools for the production of books and on the related technologies to support the authors. This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer-Verlag GmbH, DE, part of Springer Nature. The registered company address is: Heidelberger Platz 3, 14197 Berlin, Germany

Preface

We live in a volatile, uncertain, complex, and ambiguous world. This description of the state of affairs no longer frightens anyone these days, as it has become a general characteristic of everyday life experience and perception. This is especially true in the entrepreneurial and economic context. Consequently, the central challenge for companies, and in particular for the managers working there at all hierarchical levels, is the question of how they can operate successfully in this world – and not just for a few quarters, but if possible for many years. “Culture eats strategy for breakfast”: This often-quoted bon mot points the way: it is the corporate culture that sustainably determines how companies develop in the future. The corporate culture is the basis, the humus, so to speak, that creates and opens up the opportunity space for companies: Innovation, customer orientation, trust, appreciation, and efficiency – exemplary factors of a corporate culture – can distinguish it. Corporate culture either promotes them or prevents them. The message “Work on corporate culture” sounds simple. But what does the reality of this look like? Let’s look at some figures from a study by Deloitte (2016). According to this study, only 28% of managers believe they have a good understanding of their own corporate culture. Just 19% assume that their organization has the “right” corporate culture, although 82% of the executives surveyed consider corporate culture to be a relevant competitive factor. What a contradiction between aspiration and reality! The digital transformation of our entire economic life that is taking place right now is adding to this dilemma, as numerous other studies have shown. Executives are thirsting for concepts on how they can sustainably support the digital transformation through a supportive corporate culture! There is an obvious lack of knowledge and competence on how to develop and implement a sustainable corporate culture. Glossy brochures on mission statements and values abound in companies, but what is often lacking in practice are concrete models, methods, and approaches on how to directly change and shape the corporate culture. This is where this practice-oriented book comes in: After a brief introduction to the terminology and concepts of corporate culture, its importance for corporate success is elaborated. For this purpose, corporate culture is viewed in an architectural model on three levels: in addition to a strategic level and its importance for the relevant mindset, the immediate implementation as practiced behavior in the work processes and cooperation is recalled. The third level of so-called “culture hacks” serves as a bracket between these two v

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Preface

levels. This direct reflection instrument ensures the expression of the desired corporate culture, which is experienced in daily actions and experiences, because a new corporate culture must first become a habit. A six-phase process is then presented, which systematically starts from the determination of the most important factors of the company’s individual culture, shows their diagnostic possibilities, enables a maturity classification, supports a strategy derivation, presents possible methods and intervention options, and outlines a change process via a roadmap, with which a successful culture change can be controlled. An accompanying illustrative example clarifies the individual phases and illustrates the possible implementation in one’s own corporate practice. Recommendations for the successful implementation of culture change projects and the importance of leadership follow. The book concludes with remarks on the sustainable establishment of a living corporate culture and takes a look at future-relevant developments in the context of corporate culture. It is advisable to work through the entire book first, because many tips for successful culture change projects can be found in the back chapters, the consideration of which should already be helpful during planning and implementation. Afterwards, the relevant chapters can be used directly as possible advice and guidance for specific projects. The entire context and the classification of the individual work steps should then hopefully be of great benefit during successful implementation. The credo of this book is: corporate culture can be shaped, it can be changed and developed in a desired direction. However, this is usually not an easy and often not a quick undertaking. Nevertheless, this process can be successful. It seems important to have a systematic approach that offers a structured orientation and can be followed immediately. And this should be supported by methods that are as easy to apply as possible. So much for the claim of this book: theoretically sound and pragmatically oriented to contribute to a sustainable corporate culture that is fit for the future and ultimately results in greater corporate success. Corporate culture is the most important and central success factor for sustainably successful organizations. It affects all managers working in the company at all levels of the hierarchy. If one understands corporate culture as a shapable reality of life in companies, it advances to become a decisive management tool for all managers. Many exciting insights while reading and most of all, every success in the implementation I wish you many Josef Herget www.excellence-­institute.at Vienna, Austria

Josef Herget

Reference Deloitte (2016) Global human capital trends 2016. https://www2.deloitte.com/content/ dam/Deloitte/at/Documents/human-­capital/hc-­trends-­2016.pdf. Accessed 17 Nov 2019

Contents

1 Corporate  Culture: The Central Success Factor   1 1.1 What Is Corporate Culture Anyway?������������������������������������������������������������   2 1.1.1 In-Depth Illustrations of the Concept of Corporate Culture ������������   4 1.1.2 Functions of Corporate Culture��������������������������������������������������������   7 1.1.3 Where Are the Starting Points?��������������������������������������������������������   8 1.2 When Is a Corporate Culture Good?������������������������������������������������������������   9 1.3 Corporate Culture as a Success Factor����������������������������������������������������������  10 1.3.1 A Strong Corporate Culture Leads to Financially More Successful Companies����������������������������������������������������������������������  11 1.3.2 Corporate Culture as the Most Important Cause of Corporate Success����������������������������������������������������������������������������������������������  12 1.4 What Are the Drivers of Corporate Culture?������������������������������������������������  13 1.5 New Approaches to Corporate Culture ��������������������������������������������������������  15 1.5.1 Behavioural Economics Approaches������������������������������������������������  15 1.5.2 Neuroscience Approaches����������������������������������������������������������������  18 1.6 Good Practices Make the Difference: An Analogy��������������������������������������  19 1.7 To Get You in the Right Frame of Mind: How Important Is Corporate Culture Management to You? A Self-Test����������������������������������������������������  20 1.8 The Path Is Worthwhile: Create the Corporate Culture with Which You Will Become Successful in the Long Term ������������������������������������������  22 1.9 Key Points ����������������������������������������������������������������������������������������������������  22 References��������������������������������������������������������������������������������������������������������������  23 2 Corporate  Culture Can Be Shaped  25 2.1 On the Dynamics of the Phenomenon of Corporate Culture������������������������  26 2.2 Simultaneity of Different Corporate Cultures����������������������������������������������  27 2.3 Ambidextry: Consciously Using Different Parallel Corporate Cultures����������  28 2.4 Integration and Adaptation: Central Approaches to Developing Corporate Culture������������������������������������������������������������������������������������������  30 2.5 On the “Feasibility” of Corporate Culture: Systemic Reservations and the Courage to Act����������������������������������������������������������������������������������  31 vii

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2.6 Key Points ����������������������������������������������������������������������������������������������������  31 References��������������������������������������������������������������������������������������������������������������  32 3 Architecture  of Corporate Culture: An Operational Design Approach  33 3.1 Meeting the Complexity of Corporate Culture Through a Systematic Approach������������������������������������������������������������������������������������������������������  34 3.2 The Integrative Corporate Culture Architecture Model��������������������������������  34 3.2.1 The Strategic Level: Vision and Strategies ��������������������������������������  35 3.2.2 The Action Level: Measures and Processes��������������������������������������  38 3.2.3 The Level of Reflection: Culture Hacks as a Constant Compass ����������  39 3.3 An Approach to Shaping Corporate Culture: The Culture Excellence Process����������������������������������������������������������������������������������������������������������  43 3.3.1 The Individual Phases of the Culture Excellence Process����������������  43 3.3.2 The Culture Excellence Process as a Central Management Tool for Shaping Corporate Culture ������������������������������������������������  45 3.4 Key Points ����������������������������������������������������������������������������������������������������  46 References��������������������������������������������������������������������������������������������������������������  46 4 Developing  Your Own Culture Model  47 4.1 Why Is a Model Essential for Discussing Corporate Culture? ��������������������  48 4.2 Brief Synopsis of Different Corporate Culture Models��������������������������������  48 4.2.1 Development-Oriented Models: The Graves Model������������������������  48 4.2.2 Generic Models: Denison’s Organisational Culture Model and the OCI Model����������������������������������������������������������������  49 4.2.3 Problem-Based and Specified Models����������������������������������������������  50 4.3 Developing Your Own Model of Corporate Culture: Integrating Different Perspectives��������������������������������������������������������������������������������������������������  51 4.3.1 Taking Account of Different Perspectives����������������������������������������  51 4.3.2 Integration of the Views: Basis of the Own Corporate Culture Model������������������������������������������������������������������������������������������������  53 4.4 The Culture-Diamond-Model: Procedural Concept for the Identification of the Own Corporate Culture������������������������������������������������  54 4.4.1 An Example: Recording Culturally Relevant Factors����������������������  58 4.4.2 An Example: Condensation to Company-Specific Culture Factors����������������������������������������������������������������������������������  60 4.5 Alignment of Corporate Culture with Corporate Strategy����������������������������  60 4.6 Key Points ����������������������������������������������������������������������������������������������������  62 References��������������������������������������������������������������������������������������������������������������  63 5 Analysis  and Diagnosis of the Corporate Culture  65 5.1 The Corporate Culture Audit: On the Term and Concept ����������������������������  66 5.2 Survey and Evaluation����������������������������������������������������������������������������������  67 5.3 Derivation and Prioritisation of Objectives��������������������������������������������������  69

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5.4 An Example to Illustrate ������������������������������������������������������������������������������  69 5.5 Key Points ����������������������������������������������������������������������������������������������������  72 References��������������������������������������������������������������������������������������������������������������  72 6 Corporate  Culture in the Maturity Model  73 6.1 Meaning and Function of Maturity Models��������������������������������������������������  74 6.2 Concept of the Maturity Model��������������������������������������������������������������������  75 6.2.1 Stages in the Maturity Model������������������������������������������������������������  76 6.2.2 Options for Carrying Out the Determination of the Degree of Maturity����������������������������������������������������������������������������������������  77 6.3 Procedure Model for Strategic Positioning��������������������������������������������������  79 6.4 Example of a Maturity Model for Corporate Culture ����������������������������������  82 6.5 Key Points ����������������������������������������������������������������������������������������������������  85 Reference ��������������������������������������������������������������������������������������������������������������  85 7 Development  of Corporate Culture: Strategy Generation  87 7.1 Systematics for the Development of Strategies��������������������������������������������  88 7.1.1 Generic Strategies ����������������������������������������������������������������������������  89 7.1.2 Specific Strategies����������������������������������������������������������������������������  91 7.2 Strategy Options for Cultural Change����������������������������������������������������������  91 7.3 Controlling the Strategy Premises����������������������������������������������������������������  93 7.4 Key Points ����������������������������������������������������������������������������������������������������  93 8 Methods  for Cultural Development: Levels and Measures of Intervention  95 8.1 Use of Interventions and Methods in the Architecture Model����������������������  96 8.1.1 Mindset and Behaviour: The Strategic Level of the Architecture Model ��������������������������������������������������������������������������  96 8.1.2 Moving from Strategy to Action: The Operational Level of the Architecture Model ����������������������������������������������������������������  97 8.1.3 Culture Hacks: The Punctual Level of the Architecture Model ����������� 100 8.2 Classic Approaches to Changing Corporate Culture������������������������������������ 104 8.3 Recent Approaches to Changing Corporate Culture������������������������������������ 105 8.3.1 Interventions and Methods: A Characterisation�������������������������������� 106 8.3.2 Suitability Potential for the Own Company�������������������������������������� 111 8.4 Key Points ���������������������������������������������������������������������������������������������������� 113 References�������������������������������������������������������������������������������������������������������������� 113 9 Setting  Up Culture Change Projects the Right Way: Implementation and Controlling 115 9.1 Determine Procedure Concept���������������������������������������������������������������������� 116 9.2 Evaluate Interdependencies Between Measures ������������������������������������������ 118 9.3 Moving from a Portfolio of Methods to a Roadmap������������������������������������ 118 9.4 Install Project Management�������������������������������������������������������������������������� 120

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9.5 Measure and Evaluate Implementation Success ������������������������������������������ 120 9.6 Ensure Roll-Out�������������������������������������������������������������������������������������������� 121 9.7 Collecting and Processing Learnings������������������������������������������������������������ 122 9.8 A Warning and Encouragement at the Same Time!�������������������������������������� 122 9.9 Key Points ���������������������������������������������������������������������������������������������������� 123 Reference �������������������������������������������������������������������������������������������������������������� 123 10 Integrative  View: The Concept of Culture Excellence 125 10.1 The Individual Building Blocks of Culture Excellence������������������������������ 126 10.2 Integration of the Individual Building Blocks into the Concept of Culture Excellence: Approach and Advantages�������������������������������������� 126 10.3 The Cultural Design Process as a Recursive Model ���������������������������������� 128 10.4 Key Points �������������������������������������������������������������������������������������������������� 128 Reference �������������������������������������������������������������������������������������������������������������� 129 11 Don’t  Fail in the Culture Change Project: Do’s and Don’ts 131 11.1 Why Is Shaping a Corporate Culture a Sensitive Undertaking? ���������������� 132 11.2 Do’s: These Approaches Promise Success�������������������������������������������������� 132 11.3 Don’ts: It’s Best to Avoid These Practices�������������������������������������������������� 134 11.4 Key Points �������������������������������������������������������������������������������������������������� 136 12 The  Special Role of Leadership 137 12.1 Importance of Leadership: Leadership and Management�������������������������� 137 12.2 Role Model Behaviour as the Most Important Influencing Factor in the Development of Corporate Culture���������������������������������������� 138 12.3 Management in a Sandwich������������������������������������������������������������������������ 139 12.4 Who Is a Role Model in the Democratic Enterprise? �������������������������������� 140 12.5 Key Points �������������������������������������������������������������������������������������������������� 142 References�������������������������������������������������������������������������������������������������������������� 142 13 Living Corporate Culture 143 13.1 Forming Habits ������������������������������������������������������������������������������������������ 144 13.2 Reflecting on the Corporate Culture in Everyday Life ������������������������������ 144 13.3 Allowing Corporate Culture to Be a Dynamic Development �������������������� 145 13.4 Corporate Culture: Between a “Never Ending Story” or “Life Still Offers Many Exciting Moments”�������������������������������������������������������� 145 13.5 Consciously Celebrate Corporate Culture: And Develop Pride������������������ 146 13.6 Key Points �������������������������������������������������������������������������������������������������� 146 References�������������������������������������������������������������������������������������������������������������� 147 14 Challenges  to Corporate Culture: Today and Tomorrow 149 14.1 What Are the Future Challenges for Corporate Culture?���������������������������� 150 14.2 Key Points �������������������������������������������������������������������������������������������������� 156 References�������������������������������������������������������������������������������������������������������������� 157

List of Figures

Fig. 1.1 Levels of corporate culture. (Based on Schein 1995, p. 30; Sackmann 2004, p. 27) ���������������������������������������������������������������������������������� 5 Fig. 1.2 Drivers of corporate culture. (Based on Jost 2003) �������������������������������������� 14 Fig. 1.3 Influence of “doing” on the implementation of corporate culture. (Source: Gartner 2018)���������������������������������������������������������������������������������� 14 Fig. 3.1 The architecture model for culture change���������������������������������������������������� 35 Fig. 3.2 The Culture Excellence process�������������������������������������������������������������������� 43 Fig. 3.3 Cascading adaptation of the Culture Excellence process������������������������������ 46 Fig. 4.1 Triptych excellence model – pathways to high performance. (Herget 2018)������������������������������������������������������������������������������������������������ 54 Fig. 4.2 The culture diamond model�������������������������������������������������������������������������� 55 Fig. 4.3 Culture model of the example company�������������������������������������������������������� 62 Fig. 5.1 Corporate Culture Audit Template (sample templates from a project)��������� 68 Fig. 5.2 Evaluation methods Quadrant system or radar chart������������������������������������ 69 Fig. 6.1 Concept of the maturity model���������������������������������������������������������������������� 77 Fig. 6.2 Procedure model for positioning ������������������������������������������������������������������ 79 Fig. 6.3 Corporate culture in the maturity model ������������������������������������������������������ 84 Fig. 6.4 Corporate culture in the net diagram ������������������������������������������������������������ 84 Fig. 7.1 Exemplary strategy scenario�������������������������������������������������������������������������� 92 Fig. 7.2 Strategy roadmap������������������������������������������������������������������������������������������ 93 Fig. 8.1 Translating corporate culture into action������������������������������������������������������ 99 Fig. 8.2 Change model of corporate culture ������������������������������������������������������������ 111 Fig. 8.3 Evaluation portfolio for the classification of agile methods������������������������ 112 Fig. 9.1 Procedure concept for the implementation of measures and methods�������� 117 Fig. 9.2 Example of a cross-linking matrix�������������������������������������������������������������� 119 Fig. 9.3 Simplified method roadmap������������������������������������������������������������������������ 120 Fig. 10.1 The concept of culture excellence �������������������������������������������������������������� 127 Fig. 13.1 Facebook posting���������������������������������������������������������������������������������������� 147

xi

List of Tables

Table 1.1 Effect of a “good” corporate culture on selected key figures over a period of 11 years������������������������������������������������������������������������������ 12 Table 1.2 Self-test: management of corporate culture�������������������������������������������������� 21 Table 5.1 Evaluation of a corporate culture audit (rating on a scale of 10)������������������ 71 Table 6.1 Options for determining the degree of maturity (morphological systematics)�������������������������������������������������������������������������������������������������� 78 Table 6.2 The culture factor “Living internal collaboration” in the maturity model�����������81

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Corporate Culture: The Central Success Factor

Abstract

Every company, every organization has a corporate culture. The corporate culture defines the scope of possibilities and the options for action of companies. It is therefore of elementary importance for successful entrepreneurial development. At the same time, an inadequate corporate culture limits the prospects of prosperity for companies. Dealing with corporate culture is therefore important for every company. The central responsibility for corporate culture lies with top management. However, it is evident at all levels of the company, so all managers are equally responsible and accountable for the prevailing corporate culture. This chapter introduces the topic of corporate culture and clarifies its economic relevance. The complexity of the topic calls for focus: corporate culture is understood as a business-organizational phenomenon that is open to analysis, design, and development. This pragmatic view opens up an approach that allows managers to understand corporate culture as the inner workings of organizations that are capable of change and adaptation. This is linked to the possibility of developing interventions to achieve a desired corporate culture. An introductory self-test to analyse one’s own activities with regard to corporate culture shows the current status and clarifies the possible need for action in the company.

There is no such thing as a company without its own corporate culture. But which corporate culture prevails, how did it come into being, is it the “right” and conducive one, how can it be changed, how can it be shaped? Managers should address these questions for the entire company and also for their own area of responsibility. At the beginning, however, there is often a lack of a common basis for discussion: basically, everyone knows what corporate culture feels like and everyone has an idea of it. But, are these assumptions easy © The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_1

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to communicate? Do we all have similar semantic interpretations? Creating these is the concern of this chapter.

1.1 What Is Corporate Culture Anyway? Hardly any management term is used as often as corporate culture. The importance of corporate culture as a central factor of successful companies is quickly agreed upon and has been known for a long time. For years, corporate culture has ranked at the top of various studies as one of the most important topics in corporate management. Currently, 47% of decision-makers in German-speaking countries consider the further development of corporate culture to be the top issue (Hays 2017, p. 10). A study by Deloitte (2016) on the importance of human capital trends illustrates this even more clearly: 82% of the managers surveyed consider corporate culture to be a potential competitive factor. For almost 40 years now, corporate culture has been the focus of scientific and practical scrutiny. Time enough, one would think, to have illuminated all facets of the concept and to have operationalized it in the best possible way for practical purposes. In any case, there is no lack of popularity of the term in linguistic usage. Correspondingly, it is easy to use the term corporate culture for everything and anything  – it is so wonderfully noncommittal. The semantic scope for interpretation of the term seems to be wide, the responsibility is shared, and so the responsibility, especially for failures, can be readily blamed on the corporate culture, for which one is not (solely) responsible. The consistent misuse of the term and also of the concept for all shortcomings is enormous. Note at this point: The term corporate culture does not only apply to the corporate sector; administrations, non-profit organisations, churches, political parties, associations … also have their own organisational culture, which is intended to ensure the fulfilment of the purpose for the existence of these organisations. The terms corporate and organisational culture are therefore used synonymously, but for the sake of simplicity the term corporate culture is mostly used. At the same time, it is astonishing how few companies have concrete, overall initiatives on the topic of corporate culture. A look at the Deloitte study (ibid.) reveals it: only 28% of the managers surveyed believe they have a good understanding of their own corporate culture and just 19% assume that their organisation has the “right” corporate culture. Gartner (2018) also comes to a similar conclusion: according to this, only 31% of HR managers assume that they have the right culture to ensure future business success, and only 32% of HR managers are convinced that their company is able to implement the right corporate culture in its daily operations. Just 24% of employees confirm that their company culture drives their daily actions. However, the picture becomes even more inadequate: 69% of employees do not know what culture the company should have, 87% do not believe in the propagated corporate culture and as many as 90% of employees also do not

1.1  What Is Corporate Culture Anyway?

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make any efforts to promote the necessary corporate culture with their behaviour (Gartner 2018). What a Contradiction Between Aspiration and Reality! If something is perceived as so important for the success of companies, why is it surprising that so little is done to systematically develop corporate culture? An obvious answer lies in the diffuse concept; it is very difficult to find concrete clues as to how and with what the corporate culture could be influenced and shaped. In most cases, the objective is already missing – which culture do you want to have? Or to put it another way, is the culture that has developed – if it is known at all – the right one? What is a good corporate culture anyway? What characterizes it and does it always apply everywhere? A corporate culture ensures the functioning of a company, that is the everyday normal case. If we now consider Darwin’s theory of evolution (1859), however, we know that only those who can adapt to their respective environment (“survival of the fittest”) survive as a species and open up further opportunities for the future. This metaphor borrowed from evolution fits well for corporate practice: a “normal” corporate culture enables companies to survive. A “good” corporate culture creates special added value compared to other companies in the competitive environment – but does anyone in the companies know what the special thing should be that could secure competitive advantages for the company? Is it a corporate culture that enables particularly high levels of creativity, innovation, quality, customer proximity, cost thinking, speed, security, reliability, trust, agility …? What are the characteristics of such a culture and how can they be developed? These are questions to which those responsible in companies should have an answer. The corporate culture defines the possibility space in which something can happen – or not happen. It defines the positively sanctioned behavior – and the negatively sanctioned behavior. It creates the space for the tried and tested and the new. The corporate culture decides how and in which direction an organism, such as a company or an organization, will develop in the future. Corporate culture represents norms, values and behaviour that are accepted and shared by a large number of employees in an organisation. Corporate culture thus represents a social norm that rewards desirable behavior and sanctions undesirable behavior. It is viewed as an expectation of the behavior of organizational members. The power of corporate culture is made clear by the following frequently quoted bon mot: “Culture eats strategy for breakfast”. It is therefore the corporate culture that sustainably determines how companies develop in the future. The corporate culture provides the basis, the humus, so to speak, which creates and opens up the possibility space for companies. The culture promotes certain ways of thinking and behaving or it hinders or even prevents them. So the message is as simple as this: “If you want to be successful in the long

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term, work on your corporate culture”. Factual practice, as the figures above reveal, conveys a different, a very sobering reality. There are huge gaps between the perceived importance of corporate culture and the targeted influencing and development of it. There is an obvious lack of knowledge and competence on how to develop and implement a sustainable corporate culture.

1.1.1 In-Depth Illustrations of the Concept of Corporate Culture Corporate culture describes the living space of an organization. Living space encompasses the microcosm as it is experienced and lived by the members of the organization. This is of course in constant exchange with connected environments, but specific, collective mindsets crystallize in the sense of prevailing patterns of thought and interpretation that affect the behavior of organizational members. These mindsets lead to organizational patterns of behavior (accepted or disapproved). This highlights the central importance of organizational culture: it defines the space in which ideas are generated or suppressed, initiative is promoted or stifled, motivation is encouraged or destroyed, commitment is rewarded or discouraged, and collaboration is supported or hindered. In short, corporate culture creates the basic conditions under which successful work is enabled or made impossible. Definitions Lead to Applicability By corporate culture we mean the sum of all qualities, i.e. values, attitudes, norms, behaviours, rituals, manners, right down to visible characteristics such as building and office furnishings or the conduct of meetings, which have developed and become distinct in social organisations. It therefore represents the lived and often unconsciously perceived reality. Only a part, the much smaller one, can be observed from the outside. It is above all the stories as existing interpretative filters and the collective patterns of perception and interpretation that make up the respective corporate culture of an organisation. It is therefore the narratives that establish a corporate culture. The starting point for consideration is first a look at what constitutes corporate culture. In doing so, we consider five levels that manifest a corporate culture (Fig. 1.1). The bearers of corporate culture are people with their basic assumptions about the meaning of life, work, the existence of the company, interpersonal relationships in working life, priorities, roles, authorities and position in the company. These assumptions are consolidated by collective structures that have been formed through communicative exchange, by stories, experiences and lessons learned that form a shared organizational memory. These assumptions are mostly unconscious, they correspond to the feeling: “This is who we are”. Values are explicit self-interpretations, which are often recorded in the mission statement, vision, mission or in value catalogues. They are explicit proclamations of how the

1.1  What Is Corporate Culture Anyway?

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Artifacts

that's how it is here and that's how it works here

Behavior

this is how we do it

Standards

Values

Basic assumptions

this is how we should do it

this is how we want to be seen

we are like this

Fig. 1.1  Levels of corporate culture. (Based on Schein 1995, p. 30; Sackmann 2004, p. 27)

company would like to see and shape itself, its own position in the economy and society, its contribution to society and the market, and the interaction of people within the company and with partners outside: “This is how we want to be seen”. Standards and rules form the framework for daily activities in companies. They are the positive as well as negative sanction systems, behavioural guidelines, contracts documenting the contribution to performance and remuneration, but also instructions on how to do the job: “This is how we should do it”. Schein (1995) treats values and norms as one category. Extending the classical model of Schein (1995) and Sackmann (2004), we deliberately introduce an additional level, behavior, into our model as a separate level of consideration. The behaviour of the members of the organisation is reflected in their visible actions in the pursuit of their tasks and goals. It can be directly addressed with many intervention methods and is thus the adequate starting point for influencing the everyday life of the company. This predestines it to be highlighted as a category of its own. Behaviour follows “practised” practice – hence the term practices is often used –, solidifies and is guided or changed by confirmation or rejection. The behaviour corresponds to the positively sanctioned “this is how we do it”. Finally, artifacts are the visible signs, such as manners, clothing, language, rituals, myths, office space, equipment, and other perceptible forms of institutionalization, characterized by “this is how it is here and this is how it works”. With this basic concept of corporate culture, two aspects become clear:

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• the five levels work from the bottom up, but can also influence from the top down and thus trigger an interaction; • the characteristics of the individual levels correspond to different degrees of formation and rigidity, they exhibit unequal stability and their changeability requires differentiated measures in terms of time and content. In the following, this definitional approach, which is predominant in the literature, is considered in a concentrated manner and thus manageable for operational practice. Gartner (2018) groups the dimensions into two areas: mindset and behavior. Mindset comprises the first three levels of our more differentiated model, while behavior comprises levels 4 and 5. Behind it are the constructs: Attitude, way of thinking, mental attitude or also mentality. If we follow the Gartner approach, the various characteristics can certainly be grouped into these two categories: Basic assumptions, values and norms represent the individual and collective mindset, while behavior and artifacts correspond to the behavior category (Gartner speaks of practices, for the sake of simplicity we will leave it at the term behavior). Any corporate culture can therefore be summed up in the equation:

Culture   Mindset  Behavior 

describe. In order to change the corporate culture, the mindset and/or the behavior can be addressed. Furthermore, methods in the sense of interventions, instruments, tools or technologies lead to changing the way of working together and thus the corporate culture. This ultimately results in new capabilities of the organization, which can lead to improved results of the company: (Mindset  Behavior)  Methods  Increased Capabilities of an Organization to Perform Better This equation (Gartner 2018) is quite fruitful, as it immediately becomes clear that any culture change measures will be unsuccessful without an adjustment of mindset and/ or behaviour. Short-term effects are possible, of course, but without being driven by mindset, and without a change in behaviour, any new method deployed will fail. This emphatically raises awareness of the triad between thinking (mindset), acting (behaviour) and methods: these are the levels that need to be addressed in the context of cultural change processes in order to develop companies accordingly. Simplifying further, the mindset could also be referred to as the “want”, the behaviour as the “can” and finally the methods as the “may”, which refer to the environment in which the “want” and “can” are to be brought to bear. This view can be helpful when discussing corporate culture and these striking terms bring it to the ground.

1.1  What Is Corporate Culture Anyway?

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1.1.2 Functions of Corporate Culture What is the function of corporate culture in the first place, and why is a discussion of it not only helpful, but necessary for companies? On the one hand, a corporate culture cannot be avoided; all social systems have a certain culture. A company cannot have no culture. Due to their specific framework conditions and the interaction of different subjects, all institutionalized social subsystems  – companies and other organizations are nothing else  – always develop individual cultures that differ from other corporate cultures. The goal of companies should therefore be to establish a culture in which their own potential can best unfold. This brings us closer to the question of the goodness, the quality of corporate culture – when does it enable the provision of sustainably demanded services for the market, as the ultimate instance and basis of existence that ensures survival? This already crystallizes a necessary condition for the quality of a corporate culture. The corporate culture must enable adaptation to changes in the social and economic system. Adaptability means that environmental conditions and changes within the organisation are perceived, reflected upon and countered by adequate developments – companies are thus kept adaptable in exchange with the environment. It should therefore have an openness to the relevant surrounding systems: a complex and differentiated environment therefore requires an equally complex and differentiated adaptability, if possible, which is to be guaranteed by the internal culture. At a minimum, it should have the capacity to correspond with this environment in the sense of Ashby’s Law (1956): Dynamics and change coming from outside require capabilities inside the company to absorb and thus cope with the new demands – the variety of the two systems should be comparable. This is, of course, not an easy requirement to implement for individual companies. However, a much more simply structured or rigid internal culture will hardly be able to adequately deal with complex external conditions. Developing an appropriately disposed, enabling culture remains an important challenge for every company. The advantage of an organization is, of course, that it can act in a more focused manner than the environment and will therefore also be more controllable. This brings up the second and complementary meaning and function of corporate culture, that of integration. If possible, it integrates internal structures and processes into a common orientation of all activities – a basic prerequisite for being able to cope with new dynamics and changes at all. The more effectively and efficiently it achieves this, the “better” the corporate culture. Companies are thus faced with the following questions: • What corporate culture is necessary to meet the current and future challenges of the market, technologies and society and to be able to realize one’s own vision and mission – its raison d’être – by offering products or services? • What corporate culture does the company currently have at all and does it correspond to the image that is considered adequate for the future?

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1  Corporate Culture: The Central Success Factor

• If there is a “gap” between the target and the actual culture, what measures can be taken to adjust and further develop it? • How can these measures be implemented successfully and sustainably? • How can a permanent system for adaptation and integration be institutionalized to enable the long-term survival of the company? How can the path from a repair shop (the first four questions) to a self-emergently adapting system be promoted?

1.1.3 Where Are the Starting Points? The problem why corporate culture is often neither understood nor shaped as a management tool lies in its diffuse meaning: both in terms of the term and understanding as well as the possible starting points. Every company, every organisation has developed its own corporate culture, usually without any conscious intervention. However, there are clear mechanisms how a culture is created and how it is influenced – and if we understand this, we can also change it and shape it in a desired direction. However, this does not mean that we are subject to a naïve belief in change; corporate culture cannot simply be shaped directly, it must be viewed systemically and not only do numerous factors and variables have an effect on it, often enough it eludes direct shaping measures. It cannot simply be decreed. However, any capitulation to the ability to change would be misplaced – corporate culture has emerged and grown, it can therefore also be developed further and thus shaped. Unfortunately, in practice, starting points, methods and instruments that can be used systematically and in a structured way are often still too little known. Only a few organizations know which corporate culture currently characterizes them and even fewer know which corporate culture they should actually strive for in order to become sustainably successful. Complicating matters further is the fact that, of course, several parallel corporate cultures may prevail within a single company; the larger the company, the more likely the internal diversity of cultures. But even within departments there can be different (sub-) cultures. If it is postulated here that the corporate culture represents the generally accepted norms, it is equally clear that different employees will not necessarily share the same culture. Therefore, it is necessary for each manager to take on his or her own part and to respond individually to the employees in order to establish a corporate culture that is as homogeneous as possible in his or her own area of responsibility. The primary starting points for actively shaping cultural change are therefore: • the mindset of the employees, i.e. the perception and interpretation of the “world” from the company’s perspective, • the conduct and respective practices in the exercise of the business processes, • the methods that determine the way of working and collaboration.

1.2  When Is a Corporate Culture Good?

9

These are the basic pillars that the culture change measures will target. Before that, however, the “right” culture factors must be determined, which can then be operationalized.

1.2 When Is a Corporate Culture Good? Kotter and Heskett (1992) were able to convincingly demonstrate in their “classic” that the question of a good corporate culture must be differentiated. In their study, they found that 1. companies with a strong corporate culture tended to have higher economic success. At the same time, however, they also found that companies with a strong corporate culture could be less successful. A strong corporate culture can therefore also mean that the companies were able to move in the wrong direction. Let us first note here that strong corporate cultures tend to be more successful than companies with weak corporate cultures. At the same time, however, strong corporate cultures can weaken or even jeopardise corporate success by failing to adapt to the relevant environments. 2. The second thesis examined then asked whether there is a positive correlation between strategically adequate corporate cultures and corporate success. In other words, corporate cultures that are able to react to changing framework conditions. This proof was successful. Companies with a strong corporate culture, which was also classified as “strategically adequate”, were represented in the group of economically successful companies. In contrast, companies that had a strong corporate culture but whose “fit” with the general conditions (markets, customers, technologies, employees, financial markets and capital providers) was not rated as adequate were also the economically less successful. Long-term success requires a strong corporate culture that is, however, strategically adequate in relation to the relevant competitive framework conditions. However, the now less successful companies were quite successful in the past. What is it that makes companies better able to adapt their culture to the rapidly changing framework conditions and to develop successfully in contrast to companies that do not manage this adaptation change? 3. This led to the third thesis that only corporate cultures that support companies in proactively addressing changing framework conditions in an anticipatory manner and enable them to adapt to them will show superior economic results in the long term. In the sample of 22 companies studied, all with strong corporate cultures, but only 12 of them with above-average long-term success and 10 with below-average success, this thesis was impressively supported. So what are the characteristics of the companies that have a strong and adaptive corporate culture? This can be determined by the following characteristics: A corporate culture leads to long-term successful companies when the company puts balanced in its focus: • The customers and their needs,

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1  Corporate Culture: The Central Success Factor

• the employees and their needs, • the investors with their return on investment expectations. • Leadership plays a central role in this. Management at all hierarchical levels must exemplify these values and initiate constant change. The close interlinking of these four areas also minimizes the risk of tackling change just for the sake of change. What is wrong with companies that have a strong corporate culture but fail to adapt it to changing conditions? Kotter and Heskett (1992) provide a clear answer to this as well: the company is preoccupied with itself or the managers are primarily concerned with their own careers or areas of responsibility. Similarly, there may be a focus on only one technology, limiting one’s own focus with the consequence of jeopardizing long-term prosperity. A look at the current state of the German automotive industry provides textbook evidence of the relevance of this finding. Conclusion Even in times of agility and digitalization, we know the ingredients of a good corporate culture. The individual components are above all: 1. The customers and markets with their changing needs. This ensures innovation and growth. 2. The employees with their needs for meaningful, motivating and fair working conditions. This ensures participation and high productivity. 3. The capital providers with their expectations of a profitable investment. This ensures efficiency and sensible allocation of resources. 4. A management that exemplifies active entrepreneurship at all hierarchical levels. It looks for the need for change and proactively initiates change. The responsibility for this begins at the top level – or is destroyed from there. A good corporate culture starts with one or very few formative individuals and must permeate all levels of management. Management must ensure strict adherence to values and not tolerate deviations. Long-standing economic success in particular can lead to arrogance, bureaucratization and “self-occupation” (“resting on one’s laurels”). This must be resolutely countered.

1.3 Corporate Culture as a Success Factor The paramount importance of corporate culture in the perception of managers for corporate success has already been mentioned. But can this also be empirically proven and, if so, interpreted not only as a correlative relationship, but also causally? We can examine the influence of corporate culture on corporate success in two strands of reasoning: on the one hand, as directly readable in the financial success of companies. We compare companies that have a “stronger” corporate culture with companies whose

1.3  Corporate Culture as a Success Factor

11

culture is rated as “weaker”. Secondly, we present explanatory models that statistically determine the effect and explanatory content of corporate culture on corporate success. There is convincing evidence on both lines of reasoning. For a detailed review on the topic, see also Baetge et al. (2007); Bauschke (2014) and Sackmann (2006).

1.3.1 A Strong Corporate Culture Leads to Financially More Successful Companies Sackmann’s (2006) analysis of a large number of studies on the relationship between corporate culture and corporate success led to a condensation to 12 dimensions. These dimensions, we can also speak of factors (or factor bundles), show an empirical connection between a “strong” corporate culture and the effects on financial key figures. Consequently, there is a correlation between these factors and corporate culture. Sackmann (ibid., p. 7) breaks this down into a content dimension and measures of quality that describe the functionality or quality of a corporate culture. These twelve dimensions – which are, however, not independent of each other – can be captured with a number of different indicators. However, they provide a very good overview of which factors have a demonstrable impact on corporate success. Content Dimensions 1. 2. 3. 4. 5. 6. 7. 8. 9.

Clear and communicated identity Consistent strategic (target) orientation Customer orientation Ability to learn and adapt Innovative capacity Utilizing the potential of employees Leadership based on partnership and culture – open communication Performance orientation/willingness and ability to perform Balanced stakeholder orientation

Dimensions 10. Strategic fit (high degree of congruence between the existing corporate culture and the necessary strategic orientation) 11. Multidimensional orientation (simultaneous consideration and expression of different factor constellations) 12. Consistency between normative aspirations and lived behaviour.

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Another study will be presented in more detail as a representative example in order to illustrate the results in their concreteness. Kotter and Heskett (1992), who have already been cited, provide convincing arguments for paying particular attention to corporate culture. In an extensive study, they examined the effects of different cultures on corporate success. In doing so, they examined the question of what actually characterizes a good corporate culture, i.e., a prevailing corporate culture that can ultimately be reflected in corporate performance. In their research approach, Kotter and Heskett compared 207 US companies from a wide range of industries over a long-term period (11 years) and developed an index of cultural strength. Their model suggests that a strong corporate culture can develop primarily when certain values are shared by the majority of employees. Accordingly, companies with a “strong” as opposed to a “less strong” corporate culture differ significantly with regard to key business parameters, as can be seen in Table 1.1. An active shaping of the corporate culture is therefore clearly measurably reflected in positive corporate results. We have already addressed the reason for this above: a “strong” corporate culture is characterised by good internal cooperation (integration) and a high level of adaptation to changing environmental conditions.

1.3.2 Corporate Culture as the Most Important Cause of Corporate Success Another direction of explanation is based on a plausible cause-effect relationship. Here, we measure how much statistical variance is attributable to corporate culture – as an independent variable  – as an attribution for corporate success. The following three studies provide us with results: According to a study by the Federal Ministry of Labour and Social Affairs (BMAS 2008), 31% of the variance in corporate success can be attributed to corporate culture. In other words, corporate culture can explain almost one third of corporate success as a causative factor. According to another study by Herrmann et  al. (2004), 23% of the variance in firm performance is explained by cultural variables.

Table 1.1  Effect of a “good” corporate culture on selected key figures over a period of 11 years Sales Staff Share price Net profit

Stronger culture (%) +682 +282 +901 +756

After Kotter and Heskett (1992, p. 11)

Weaker culture (%) +166 +36 +74 +1

1.4  What Are the Drivers of Corporate Culture?

13

Similarly, the international study by Bailom et al. (2013, p. 43 ff.) leads to further interesting results. Using a statistical approach based on Partial Least Square (PLS), the authors develop a model that is intended to determine causalities between various success variables examined. Through the model as a total construct of eight different success factors, a total of “only” 48% of the company’s success can be explained, but the authors’ interpretation is clear. The variables examined included two cultural aspects, one being the entrepreneurship culture and the other the strength of the corporate culture. Although both factors could not be brought into a direct causal relationship with corporate success using this method, their significance as “upstream” drivers for other variables relevant to success is nevertheless clear. Bailom et al. (2013, p. 50): “The success of a company is not so much decided on the market, but inside the company” and further, it is “not individual management methods and instruments, but ultimately it is the attitudes, values, thought patterns and behaviours of the top management team that form the foundations for sustainable success” (ibid., p. 51). The role of corporate culture and top management is thus also considered central in the results of this comprehensive empirical study. The importance of corporate culture as an integral factor of successful companies is strongly confirmed by the results of numerous studies.

1.4 What Are the Drivers of Corporate Culture? An interesting addition to the economic relevance of corporate culture is provided by Guiso et al. (2015) in their analysis. First, they conclude that the mere proclamation of a company’s values had no impact on measurable corporate performance. Publicly proclaimed values such as integrity, teamwork, innovation, respect, quality, safety, corporate social responsibility, communication and performance showed no correlation with corporate performance (ibid., pp. 63–65). In contrast, a positive correlation of the value integrity (synonym used for: Ethics, Responsibility, Trust, Honesty, Transparency, etc.) expressed by the variable “Management’s activities are consistent with their values” to the company’s financial performance could be established (ibid., pp. 72–75). This analysis referred to the evaluation by employees as they take place annually in the “Great Place to Work” studies. The data here refers to the USA and includes companies with more than 1000 employees. The impact on financial performance was even more pronounced for non-­ publicly listed companies. With these results, the prominent role of management, as already pointed out by Kotter and Heskett (1992), is also emphasized by more recent research. Management’s role model behaviour has an impact on employees and subsequently also on the company’s success. Another study by Jost (2003) also highlights the role model effect of superiors as a driver of corporate culture (Fig. 1.2).

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Drivers of corporate culture Mentions in %

Role model effect of superiors

72 44

Possibilities for self-organisation

43

internal communication 33

regular management meetings/coaching interesting, exciting work

26

Development of social competence

23 10

20

30

40

50

60

70

80

90

100

Fig. 1.2  Drivers of corporate culture. (Based on Jost 2003) "Say"

"Do"

"Implement"

Managers communicate The importance of corporate culture

Managers adjust their Behavior to be consistent with corporate culture

Managers shape the Processes, budgets, structures and measures based on the corporate culture

Percentage of organizations in which managers consistently use these activities

83 %

29 %

19 %

Impact on employeecorporate culture alignment

1%

5%

18 %

Fig. 1.3  Influence of “doing” on the implementation of corporate culture. (Source: Gartner 2018)

Gartner (2018) offers a further and very insightful differentiation on this topic, which leads to a significant deepening of the previous results. Setting an example remains a necessity, but the greatest effect in the implementation of a new corporate culture comes from operationalizing the desired behavior in daily work. Only by breaking down the desired cultural characteristics into concretely measurable indicators and establishing these as a yardstick for evaluating the respective processes can the greatest implementation effect be achieved by far (Fig. 1.3). The methodology for this is presented later in Chap. 3. It becomes clear that most managers limit themselves to communicating the importance of corporate culture and assume that their behavior is sufficient as a role model. However, this is not the case; only the consistent implementation of the desired culture parameters into daily practice in concrete behavior and practices with measurable

1.5  New Approaches to Corporate Culture

15

priorities and metrics lead to significant culture change. Mere communication has the least effect. Leaders, to maximize the impact on performance, must walk the triad: Say, Do, and Implement (Gartner, ibid.). The results presented indicate that the importance attributed to this “soft” topic by managers is also justified by the actual significance for “hard” facts. A highly developed corporate culture obviously leads to better economic results. Nevertheless, we need to clarify here again, every company has its own history, mission, structure, strategy as well as product or service offering and operates in different industry and competitive environments. A culture that is successful in stable, less dynamic markets can be dysfunctional in volatile and dynamic markets. What is needed here is not a culture that promotes stability, but an agile and flexible one that is able to react quickly to market changes. However, living in volatile times also means that stable markets can radically change their conditions very quickly as a result of disruptions, such as those currently being caused by the Corona crisis and the digital transformation. The recipes for success of yesterday and today can thus jeopardize the success of tomorrow. However, anticipating such developments in good time is the hallmark of a good corporate culture.

1.5 New Approaches to Corporate Culture 1.5.1 Behavioural Economics Approaches Behavioral economics has contributed some interesting approaches to the topic of corporate culture in recent years. In the following, five of these approaches will be examined in more detail.

1.5.1.1 Cooperation and Feedback as the Key to Optimising Corporate Culture The basis of the behavioural economics view lies in the understanding of corporate culture as expected social norms in companies. This postulates the anchoring of corporate culture in the mutual expectation of the respective behaviour. The normative principles expressed therein are expressed in the respective characteristics of the corporate culture. At the same time, the importance of perceptible interaction  – and its influenceability through real behaviour – becomes clear. Negative and positive deviations from desired behaviour have consequences for future behaviour. The willingness to cooperate within organizations is therefore conceived as a design space that can be influenced by actions. Ernst Fehr (2018) emphasizes the importance of sanction mechanisms to maintain and increase willingness to cooperate. He shows that without appropriate mechanisms, the willingness of organizational members to cooperate almost inevitably decreases. As a regulatory mechanism, he particularly emphasizes constructive feedback as a necessary measure to strengthen the willingness to cooperate. The possible approaches to feedback will be presented in more detail in the methods section (Chap. 8). Similarly, Fehr (ibid.) emphasises the importance

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of personnel selection, in which above all applicants who are willing to cooperate should be selected. This fact has already been pointed out by the legendary Jack Welch, former CEO of General Electric, with his much quoted saying: “Hire for character, train for skills”. In addition, this approach also assigns an important role to the role model behavior of managers.

1.5.1.2 Trust as the Key Behavioural economist Michael Kosfeld places trust as a precondition for cooperation at the centre of his research. The starting point is the hypothesis that trust represents a critical advance performance with the consequence that the parties concerned generate a common advantage as a result. In general, empirical studies have identified both the type of the “free rider”, who wants to maximize his individual benefit, and the type of the “cooperator”, who wants to maximize the common benefit. Both phenomena can be found in reality. In organizations with shared purpose, it is therefore important to foster a climate that prioritizes trust, because trust motivates, while mistrust demotivates (Kosfeld 2018). It is important for management – itself one of the most formative factors – to motivate the non-cooperative without demotivating the cooperative. In this regard, the paradox holds true that those who do not trust will not encounter a trustworthy person (Kosfeld 2018). It equally remains to be noted that cooperation is unstable over time. It is also more pronounced in teams with known colleagues than with strangers, as empirical studies suggest. For companies, the conclusion remains, on the one hand, to discipline the “free riders”, then the “conditionally willing to cooperate” will also continue to cooperate voluntarily (Kosfeld 2018). Thus, consequence management, understood as the sanctioning of non-­ cooperative behaviour, moves to the centre of organisational management as a leadership task. Trust therefore complements control and represents a meaningful precondition of joint activities in organizations. In a nutshell, this is: “Trust as an advance is worthwhile”. 1.5.1.3 Role Model Function of Managers However, the role model effect of top management is not so self-evident in practice: the misconduct of top managers in the upper echelons of large corporations is numerous. In a study, Price and Waterhouse estimate the proportion of international executives who had to vacate the executive chair due to legal or ethical missteps at around 5% in 2017 (PWC 2017). In the German-speaking region, the proportion is estimated to be lower, at only 2%. The proportion of executives at smaller companies, which are not so much in the public spotlight, is also unlikely to be lower. Often, in the minds and perceptions of employees, the missteps are not blamed on the managers alone, but also on the structures that enabled the misconduct. A loss of trust in the entire company can then be the consequence; obviously, governance and compliance have not produced the desirable effects and the mutual “control”, also in management, no longer stands as a positive example of a feedback culture.

1.5  New Approaches to Corporate Culture

17

1.5.1.4 The Importance of Peer Feedback Not only the behaviour of managers, as already described, but also that of colleagues (peers) plays a major role in the shaping of corporate culture. As desirable as the establishment of high internal community standards may be, the opposite effect can also occur. Increasingly, the influence of “negative” minded employees and their destructive effect on a positive corporate culture is being discussed. In their study on the effect of bad examples, Dimmock and Gerken (2018) come to the following conclusion: “Among co-workers, it appears easier to learn bad behavior than good”. What approaches to “curing” “toxic” employees are successful? Curnow-Chavez (2018) highlights the quality of relationships in a team as a critical factor. Seventy percent of the variance between poor- and best-functioning teams could be explained by the differences in their totality. She also highlights, “It breeds cynicism when companies espouse values and norms of behavior, but don’t hold some employees to the same standards.” That management must act here through the sanctioning power is evident. However, what can peers themselves do to “cure” the behavior of these employees? Curnow-Chavez recommends the following four courses of action: 1 . Have an honest candid conversation with the person 2. Raise your own game, and keep your ego in check 3. Talk with your boss 4. Take care of yourself According to Cornerstone (2015), just one toxic employee on a team results in a 30–40% drop in performance for the entire team. So how prevalent are toxic employees in the real world? Cornerstone (2015) estimates the percentage of toxic employees in their research to be in the range of 3–5% of all employees.

1.5.1.5 Nudging or Positively Intended Influence The dilemma of individual freedom of choice and the “right” decision is addressed by the concept of nudging, which was introduced primarily by Richard Thaler and Cass Sunstein (2008) a good decade ago. In this process, the framework of decision options (decision architectures) is changed so that a desired course of action is chosen for one’s own and the community’s benefit. Thereby, this sublime “decision support” should not be understood as manipulation. Nevertheless, this concept also encounters criticism because of its inherent manipulative character. According to this view, nudging basically implies a libertarian paternalism in which the decision alternatives are presented to the subject, who is only capable of “limited rational decision-making”, with different incentives in order to ultimately influence his choice of a decision. The concept of nudging, for which Robert Thaler received the Nobel Prize in 2017, is enjoying increasing popularity, especially in political consulting, but it is also receiving greater attention and use in the field of corporate culture. Its application is intended to influence some factors of corporate culture, for example, in the context of innovation

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activities, appropriate spaces are colored to increase creativity, spaces in the buildings (e.g., restrooms, cafeterias) are arranged in such a way that they provide employees with the opportunity of chance meetings, or in which the duration of meetings are shortened and concentrated, in which only standing tables are found in the meeting rooms. For an overview of the benefits of nudging in operational settings, see Güntner et al. (2019).

1.5.2 Neuroscience Approaches For a good 10 years now, the findings of neuroscience have also been increasingly discussed and fruitfully adapted for management. In his numerous publications, the well-­ known neuroscientist Gerald Hüther (2013, 2018) tirelessly reminds us of the importance of belonging and personal growth as the driving force of healthy social systems. Purps-­ Pardigol (2015) takes the brain-based leadership approach further, which focuses on people and their needs as identified by neuroscience. Reisyan (2013) as another representative of this approach deals with neuroscientific foundations, such as perception, memory and learning and familiarizes with constructs, such as emotion, stress, cognitive dissonance, intelligence, attention and creativity in a neurobiological context. Thus, it provides an understanding of cultural phenomena and human behavior that can be used for cultural work. Fabritius and Hagemann (2017) integrate the findings of neuroscience research into leadership work with a focus on achieving high performance in teams. Amy Edmondson (2018), in particular, emphasizes the importance of psychological safety in organizations, allowing individuals to contribute to their full potential and leading teams to achieve their full potential. Creating fear-free organizations is essentially the task of an appropriate corporate culture. Peters and Ghadiri (2011) focused on the following basic human needs in their publication: • • • •

Pleasure gain and displeasure avoidance Bonding and belonging Orientation and control Self-esteem enhancement and protection.

This clearly shows the importance of anchoring these needs in the corporate culture, which constitutes them and reflects back on them. The neuroscientific approaches complement the knowledge of the impact of individual factors on the shaping of a particular corporate culture. Especially the striated approaches to trust, affiliation and self-efficacy deserve special attention in cultural contexts. Some of these phenomena already refer to older approaches, such as Antonovsky’s (1997) approach to salutogenesis, which he already presented in the 1980s. The concept of salutogenesis focuses on comprehensibility, manageability and meaningfulness as the basis of health-enhancing work contexts. Recent results of neuroscientific research seem to confirm the validity of this model.

1.6  Good Practices Make the Difference: An Analogy

19

1.6 Good Practices Make the Difference: An Analogy Why Is “Good Management” of Corporate Culture Important? Current research suggests that productivity differences between firms can be attributed to differences in the use of advanced management practices. Bloom et al. (2012) refer to this competitive advantage through the use of advanced management techniques (practices) as “management capital”. What is particularly eye-catching is that according to self-­ assessment, 79% of all companies (out of over 8000 companies studied in 20 countries) describe their management practices as above average. However, according to the analysis of the researchers, who evaluated 18 management practices from the three categories of objectives, incentives and monitoring, only 15% of the US and even less than 5% of the others were above the value of 4 on a 5-level scale measuring the quality of management practices. This result suggests a bias of overestimating oneself (Bloom et al. 2012). The industries studied in the sample included manufacturing, retail, health and education. However, improving the quality of management practices has resulted in significant improvements in earnings: for manufacturing companies, an improvement of one level on the 5-level scale has already resulted in 23% higher productivity, 14% higher market capitalisation and 1.4% higher annual sales growth rate. Comparing the 10% best performing companies with the 10% worst performing companies in terms of company success, good management practices account for 18% of the difference, compared to research and development explaining 17%, employee skills 11% and IT spending 8%. Consequently, “good management” explains the largest difference in company success (Bloom et al. 2017). To sum up: • qualitatively better use of management practices increases the profitability of companies • the self-assessment deviates considerably from an “objective” external assessment, a dangerous overestimation of one’s own management practices prevails to a not inconsiderable extent • an increase in management quality leads to significant improvements in profitability. We transfer these empirically valid results to corporate culture and venture the plausible hypothesis: a well-managed corporate culture leads to more successful companies. In the next section, you can now assess the state of management practices regarding corporate culture in your company.

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1.7 To Get You in the Right Frame of Mind: How Important Is Corporate Culture Management to You? A Self-Test The following test provides an initial overview of how well (or poorly) the corporate culture in your company has been managed to date. The questions asked can be answered on a 7-point scale. The value 1 is the lowest, the value 7 the best. The gradations can be based on the legend: Legend for the Answer Scale (To Be Adapted Analogously) 1 Corporate culture is not addressed and not understood as a shaping factor. 3 The management is aware of the importance of the corporate culture, but neither the current nor the desired state is known. The first reflections on the design of the corporate culture are taking place. 5 Corporate culture is recognized as a success and design factor, it is consciously addressed, measures are taken, and it is given high priority in the selection and development of employees. 7 The management sees the corporate culture as the most important success factor. The corporate culture is systematically managed and strategically developed, measures are set and evaluated, a stringent corporate culture is lived throughout the company. The company has the desired corporate culture. The values in fields 2, 4 and 6 are intermediate values and are to be evaluated as a continuum to the other expressions. The 20 questions asked are assigned to four levels (Table  1.2), which are self-explanatory. Get Started! Now you have a first rough overview of where your company stands with regard to the management of corporate culture. It also becomes clear in which levels there are particular strengths – or more often, where there are particular deficits that need to be changed. This analysis can be used to get the company in the right frame of mind for the topic. The need for a good management of the corporate culture can become evident and be taken into focus. The project “corporate culture” can be prioritized and put on the agenda. This self-­ test can be repeated at certain intervals, the result can show on which levels there is a particular need for action. How all this can be planned, organized and implemented is the subject of the following chapters. The journey can begin.

1.7  To Get You in the Right Frame of Mind: How Important Is Corporate Culture…

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Table 1.2  Self-test: management of corporate culture 1 2 3 4 5 6 7 1. Policy, objectives, strategies, monitoring 1.1 In the minds of managers, corporate culture is a key factor in the success of business management 1.2 The culture factors specific to the company are known 1.3 Strategies for developing the corporate culture are in place and anchored 1.4 The current state of the corporate culture is known, the target state has been determined 1.5 The management of corporate culture exists as a “Center of Competence” (or similar competence center) with the necessary internal/external know-how Average value at 1 2. Transposition and implementation 2.1 A culture design and change project is written 2.2 Methods and instruments for evaluating and developing the corporate culture are used systematically 2.3 There is a roadmap for concrete change/design of the corporate culture, which is being worked through 2.4 Pilot applications and/or roll-outs on corporate culture are systematically planned 2.5 Obstacles to the corporate culture are systematically identified, analysed and countermeasures are developed and implemented Average value at 2 3. Organisational development and human resources development 3.1 Corporate culture is discussed, reflected and sanctioned (e.g. consequence management) 3.2 Corporate culture is addressed in continuing education 3.3 Corporate culture is explicitly taken into account in team building 3.4 Corporate culture and personal “fit” is explicitly taken into account in recruiting, personal career planning and development 3.5 Personally experienced corporate culture is an integral part of appraisal systems Average value at 3 4. Impacts and competences 4.1 The corporate culture is measured and compared as a benchmark, internally and, if possible, externally 4.2 Commitment, fluctuation and sickness levels are correlated with the prevailing corporate culture 4.3 Employer branding and corporate culture are used consciously 4.4 Innovation capacity and corporate culture are systematically aligned 4.5 Corporate culture is anchored in the company as a KPI Average value at 4 Overall rating (1–4)

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1  Corporate Culture: The Central Success Factor

1.8 The Path Is Worthwhile: Create the Corporate Culture with Which You Will Become Successful in the Long Term Dealing with corporate culture is elementary for companies and will become even more important in the future. Despite all the described inadequacies in description, modelling and a – so it seems – limited, rather indirect potential for intervention, the shaping of corporate culture remains a permanent and intrinsic task of management at all levels. However, this also requires reflection on one’s own person, one’s own behaviour, one’s own values and basic assumptions – and how these relate to other people and to the system of the organisation as a whole. Compatibility is necessary for successful cooperation, otherwise there will be collateral damage – for the company or the person. This book includes numerous starting points and many suggestions on how to approach and accomplish this task. It is a journey that can also include sprints. And this journey also starts with a first step.

1.9 Key Points 1. The significance, importance and relevance for success of corporate culture is generally acknowledged today. What is still missing above all are well-tested approaches to shaping corporate culture. 2. Both employees and managers largely do not believe in the correctness of the current corporate culture. 3. Organizational culture represents the accepted expectations for the behavior of organizational members. 4. “Culture Eats Strategy for Breakfast” 5. The mindset and the behavior represent, in a nutshell, the corporate culture – they are the starting points for valid changes. 6. The corporate culture must be able to absorb the complexity of the environment in an agile and coherent way; diversity requires diversity. 7. A good corporate culture is characterized by an integrating focus on customers, markets and the environment, employees, investors and management. 8. A good corporate culture leads to economically superior results and it represents the most important success factor. 9. Cooperation, trust, role model behaviour, feedback and nudging are to be considered as new behaviourally motivated forms of influencing culture. 10. From a neuroscientific perspective, attachment, belonging, orientation and personal growth are of great importance. 11. Good management of corporate culture is an important prerequisite for maintaining the culture that is being sought. 12. Managers usually overestimate the quality of their practices.

References

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References Antonovsky A (1997) Salutogenese: Zur Entmystifizierung der Gesundheit. dgvt, Tübingen Ashby WR (1956) An introduction to cybernetics. Wiley, New York Baetge J et  al (2007) Unternehmenskultur und Unternehmenserfolg: Stand der empirischen Forschung und Konsequenzen für die Entwicklung eines Messkonzeptes. J Betriebswirtsch 57(3–4):183–219 Bailom F, Matzler K, Tschermernjak D (2013) Was Top-Unternehmen anders machen: Mit Strategie, Innovation und Leadership zum nachhaltigen Erfolg. Linde, Wien Bauschke R (2014) Unternehmenskutlur und Unternehmenserfolg. In: Homma N et  al (Hrsg) Einführung in die Unternehmenskultur. Springer, Wiesbaden Bloom N, Sadun R, van Reenen J (2012) Does Management really work? Harv Bus Rev 90(11):70–80, 82, 148 Bloom N, Van Reenen J, Brynjolfsson E (2017) Good management predicts a firm’s success better than IT, R&D, or even employee skills. Harvard Bus Rev, April 10 BMAS (2008) Bundesministerium für Arbeit und Soziales. Unternehmenskultur, Arbeitsqualität und Mitarbeiterengagement in den Unternehmen in Deutschland. Abschlussbericht Forschungsprojekt Nr. 18/05, Berlin Cornerstone (2015) Toxic employees in the workplace. Hidden costs and how to spot them. Conerstone on demand research, Santa Monica Curnow-Chavez A (2018) 4 ways to deal with a toxic coworker. Harv Bus Rev, April 10 Darwin C (1859) On the origin of species. Faksimile der Erstausgabe. Harvard University Press, Cambridge, MA, 1974 Deloitte (2016) Global human capital trends 2016. https://www2.deloitte.com/content/dam/Deloitte/ at/Documents/human-­capital/hc-­trends-­2016.pdf. Accessed on 17 Nov 2019 Dimmock S, Gerken WC (2018) How one bad employee can corrupt a whole team. Har Bus Rev (March 05) Edmondson AC (2018) The fearless organization: creating psychological safety in the workplace for learning, innovation, and growth. Wiley, Hoboken Fabritius F, Hagemann HW (2017) The leading brain. Powerful science-based strategies for achieving peak performance. Penguin Random House, New York Fehr E (2018) Behavioral foundations of corporate culture. UBS center public paper no. 7, Zurich Gartner (2018) Culture in action. The role of leaders in making culture perform. https://www.gartner.com/en/executive-­guidance/culture.html. Accessed on 22 Aug 2019 Guiso L, Sapienza P, Zingales L (2015) The value of corporate culture. J Financ Econ 117(1):60–76 Güntner A, Lucks K, Sperling-Magro J (2019) Lessons from the front line of corporate nudging, McKinsey Quarterly, January. https://www.mckinsey.com/business-­functions/organization/our-­ insights/lessons-­from-­the-­front-­line-­of-­corporate-­nudging. Accessed 21 Aug 2019 Hays: HR-Report (2017) Schwerpunkt Kompetenzen für eine digitale Welt. Herausgegeben von Hays AG und Institut für Beschäftigung und Employability IBE Herrmann A, Schönborn G, Peetz S (2004) Von den Besten lernen: der Einfluss der Wertekultur auf den Unternehmenserfolg. In: Bentele G, Piwinger M, Schönborn G (Hrsg) Kommunikationsmanagement. Strategien, Wissen, Lösungen (Loseblattwerk). Einzelbeiträge KM. Luchterhand, Neuwied/Kriftel Hüther G (2013) Was wir sind und was wir sein könnten: Ein neurobiologischer Mutmacher. Fischer, Berlin Hüther G (2018) Würde: Was uns stark macht – als Einzelne und als Gesellschaft. Knaus, München Jost HR (2003) Unternehmenskultur: Wie weiche Faktoren zu harten Fakten werden. Orell Fuessli, Zürich

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Kosfeld M (2018) Wieso Vertrauen? Vortrag, Vienna Behavioral Economics Network (VBEN), (11.09.2018). https://www.youtube.com/watch?v=HM0anjrvPO0. Accessed 17 Nov 2019 Kotter JP, Heskett JL (1992) Corporate culture and performance. Free Press, New York Peters T, Ghadiri A (2011) Neuroleadership – Grundlagen, Konzepte, Beispiele: Erkenntnisse der Neurowissenschaften für die Mitarbeiterführung. Gabler, Wiesbaden Purps-Pardigol S (2015) Führen mit Hirn: Mitarbeiter begeistern und Unternehmenserfolg steigern. Campus, Frankfurt am Main PWC (2017) CEO success study 2017. https://www.strategyand.pwc.com/at/de/presse/oesterreichs-­ ceos.html. Accessed 17 Nov 2019 Reisyan GD (2013) Neuro-Organisationskultur. Moderne Führung orientiert an Hirn- und Emotionsforschung. Springer Gabler, Wiesbaden Sackmann SA (2004) Erfolgsfaktor Unternehmenskultur. Gabler, Wiesbaden Sackmann SA (2006) Welche kulturellen Faktoren beeinflussen den Unternehmenserfolg? https:// www.dgfp.de/hr-­wiki/Betriebsvergleich_Unternehmenskultur_-­_Welche_kulturellen_Faktoren_ beeinflussen_den_Unternehmenserfolg_.pdf. Accessed 17 Nov 2019 Schein E (1995) Unternehmenskultur: Ein Handbuch für Führungskräfte. Campus, Frankfurt am Main Thaler RH, Sunstein CR (2008) Nudge: improving decisions about health, wealth, and happiness. Yale University Press, New Haven

2

Corporate Culture Can Be Shaped

Abstract

Every company has an individual corporate culture. Corporate culture develops over time. It emerges with the founding of the company, changes, adapts, is developed further. It is invisible, but to a certain extent observable. Corporate culture is not static, it develops dynamically. The postulate of changeability is essential – corporate culture is not a given, it emerges through the interaction of numerous people in an organization. For companies, the crucial question remains whether the prevailing corporate culture is also the one that best supports the company in its specific situation and in the future. This leaves the central question of whether, how and in what time frame a corporate culture can be shaped and developed. Depending on the size and complexity of the company, a company can have different parallel corporate cultures at the same time. Especially in times of digital transformation, ambidexterity, the symbiosis of such different corporate cultures that exists at the same time and, if possible, synergistically stimulates each other, is of great importance.

Corporate culture is a dynamic phenomenon. It is important to understand its genesis, because through this understanding the possibility of shaping and changing it also becomes clear. Cultures emerge and evolve. How this process takes place is addressed in this chapter.

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_2

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2.1 On the Dynamics of the Phenomenon of Corporate Culture How does corporate culture actually come into being? And how is it that every company has its own corporate culture? There will hardly be two companies with completely identical corporate cultures. This makes it clear that corporate cultures are always individual, in the sense of being organization-specific. The emergence of a corporate culture already takes place when a company is founded, mostly shaped by the founders, i.e. people who have an idea and want to use it to satisfy an existing or latent demand on the market. This becomes clear in the guiding principle of Adi Dassler, the founder of Adidas: “Every athlete should get the best fitting shoe for his discipline”. Even after almost 100 years, Adidas is committed to this guiding principle, which provides orientation and a framework. The actions of the founders, their dealings with each other and with other employees, the prevailing communication style internally, with partners and customers, their decision-­ making behavior, all this shapes the corporate culture. The new employees who join the company orient themselves above all to the people who are given the power to implement ideas. Repetition of successful behavior leads to the formation of habits that are no longer questioned. Stories and narratives are formed, an awareness emerges of how life works best in this organization, what behavior is valued, what is disapproved. Learning experiences, be they successes or failures, offer further opportunities to question what has been practiced so far and, if necessary, to relearn. Growth disruptions in a company, be it takeovers, new locations, new or additional capital owners, new product lines, new customer segments, new technologies and processes, and the like, can call into question what has gone before. Situations can arise in which uncertainties take hold or established patterns of generally accepted behavior are not yet entrenched. These are phases in which new corporate cultures can emerge more easily. It becomes more difficult when there is no external or internal reason why the established routines of togetherness should no longer work in the future. Questioning established routines for their appropriateness remains a constant challenge. Here, management is called upon to sensitize and influence the mindset and behavior of employees accordingly in order to enable further development. The typical standard phrases: “We have never done it this way before” or: “We have always done it this way” characterize this resistant constellation. However, it is clear that there are always opportunities or developments that make it possible to adapt or change the corporate culture. These can come from the outside, but also from within. It is the task of the executives, here above all the top management, to create the need for change and the will to change. The credo to be internalized for shaping the corporate culture should therefore be: What Emerges Changes and Can Consequently Also Be Consciously Changed Corporate culture is therefore the real-life result of the often unconscious or conscious assumptions, premises, values, norms, behaviours and artefacts in an organisation. So far so good. The central question for those concerned with cultural issues in organisations – and that includes all managers at least – is how a desired (or even considered necessary)

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corporate culture can be developed if the current one is not considered adequate to the requirements. This raises the question of a process of cultural change, which is the subject of this book. Different approaches to changing corporate culture abound in the literature. With pragmatic intentions, Kotter and Heskett (1992), for example, focus primarily on systems that act as reward and sanction systems or process flows that are established in organizations and thus have a strong direct influence on behavior in companies. Radatz (2009) takes an almost radical approach. With her relational approach she claims an immediate changeability of structures and processes in organizations. So we see that corporate cultures are changeable, because they are created primarily by the interpersonal dynamics in organizations and in process flows. Storytelling, i.e. the stories that are told to each other, the example and behaviour (“walk your talk”) of the managers, the management systems used and a clear picture of how one would like to shape reality together – as a few selected levers – show how corporate cultures can be influenced in their direction of development. What is created can therefore also be further developed or even changed in the further course. Communication is the constituting element of social systems, as Luhmann (1984) already pointed out.

2.2 Simultaneity of Different Corporate Cultures The assumption that there is only one corporate culture in an organization would generally be an inaccurate assumption. At best, this may still be the case in small and medium-sized enterprises, but if the organisation differentiates into different departments or locations, these then form subsystems that are more interrelated and interdependent, and these develop their own specific corporate culture from this. As a rule, there is a dominant and determining corporate culture as a framework culture, but then it depends above all on the size, heterogeneity and differentiation of an organization: In general, it can be said that the larger an organization, the more locations, the more comprehensive the depth and breadth of value creation, the more customer segments, the more diverse the assembled professions, the more complex the structure, the more divergent corporate cultures will exist in parallel. In small, mainly owner-managed companies with up to about 50 employees, one corporate culture will very likely prevail. In a group with more than 10,000 employees with locations in different countries and an extensive product range, several dozen subcultures may be found in parallel. Nevertheless, it remains important to establish a corporate culture that can be perceived by everyone, that overlaps everything, as a unifying bond that conveys togetherness – also to the outside world – and that can subsequently be felt perceptibly. This challenge is particularly evident in mergers and acquisitions, for example. Here, two companies with different cultures are united. Of course, this involves numerous conflicts, since there is usually a more dominant partner whose culture mutates into the reference culture.

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On the other hand, a parallelism of different cultures is currently increasingly being consciously not only permitted but even encouraged. For example, in individual departments or projects, which then spin off sub-units from the classic hierarchy and call them “labs” or “hubs”. Similarly, takeovers of start-ups take place with the aim, in addition to gaining access to new, innovative products, of deliberately establishing a different culture (the “spirit” of departure) at least in sub-areas, with all the risks and potential for conflict that this entails. The advantages of start-ups, such as speed, informal communication and cooperation, cross-hierarchical understanding and the empowerment of individual employees, are to be integrated with the advantages of larger companies, such as stability, established processes, scalability, etc. What Facets Can Subcultures Now Take On? We can distinguish (cf. also Schein 2010, p. 1 f.): (a) Macro-cultures: these differ, for example, according to countries, ethnic groups, religious affiliation or even professional groups. These macro-cultures have commonalities, as is clearly evident, for example, in the case of engineers, doctors or lawyers. (b) Organizational subcultures: these are primarily understood as location-based cultures in multinational or global companies. However, distinctive divisional or departmental thinking can also lead to organisational subcultures. (c) Micro-cultures: these are groupings within organizations whose frequency of interaction produces more evolved structures internally and demarcations externally: Teams, departments, divisions, sites, informal groups, hierarchical levels, etc. The challenge is to create a common framework, to establish certain elements of the corporate culture everywhere and to avoid “against each other”. The goal must be to enable productive togetherness, to make unifying visions and strategies for the future tangible. The metaphor “We are all in the same boat” is very helpful here. Despite different framework conditions and functions, common intentions and goals must be emphasized. The set of guiding, specific corporate culture factors will have to be negotiated in a cascade from top management down to the lower management levels. The methodological procedure for this follows in Chap. 4.

2.3 Ambidextry: Consciously Using Different Parallel Corporate Cultures Ambidextry has become a fashionable term, especially in connection with the start-up culture and the innovative behavior of large companies. In recent years, it has also increasingly come into focus in the area of digital transformation. Ambidextry refers to the aspect that a company should have different corporate cultures in different (or even the same)

2.3  Ambidextry: Consciously Using Different Parallel Corporate Cultures

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functional areas in order to be successful, based on its original meaning as ambidexterity or the high dexterity of both hands. A similar construct has been introduced under the term bimodality for the IT field, which can become equally fruitful here. Bimodality means, in addition to an IT infrastructure designed to keep operations running smoothly, a second area that can be agile and experimental away from the requirements of keeping operations running, designing and testing new and innovative applications. This model can also be used in the corporate culture: for example, where fast, agile teams should very quickly realize (still experimental) applications for the market. A different corporate culture may be recommended for these development teams. When the new systems or processes are finally adopted in regular operation, a more stable culture can come into play again. The difference between this and grown sub- or micro-cultures is that ambidextry can often be consciously applied in similar areas. In addition to IT, for example, innovation departments, marketing and communications departments, or even certain staff activities are likely to exhibit two different modes of practiced corporate culture. Why Is Ambidextry Mainly Discussed in the Field of Innovation? In the fast-moving competitive environment, it can be observed, especially in the area of innovation, that methods developed over many years in large companies have simply become too slow to be able to react promptly to market changes and keep up with the development speed of agile start-ups. Prevailing hierarchies, necessary decision-making processes, methods used, market tests trimmed for reliability often lead to a multiple time requirement in the project timeline. At a time when speed is becoming the decisive competitive factor, there is therefore a conscious attempt to establish, promote or allow different cultures in some teams or departments at the same time (for example, after acquisitions or cooperations with start-ups). The problems potentially associated with this are obvious: the attractiveness of the cultures for employees can differ, mutual understanding dwindles or different expectations with conflict potential arise, which unnecessarily complicate cooperation. Nevertheless, new impulses can be helpful and parallel corporate cultures can prove to be a possible source of mutual learning. It is important that this process is also well planned in order to limit conflicts in advance. In contrast to the developed subcultures described above, we subsume the various facets of corporate culture within the framework of ambidextry as planned, intended and wanted. Many large companies can thus benefit from this learning detour to enrich their corporate culture, which may have become somewhat stolid, with fresh impulses and to change it as a result. In any case, the Boston Consulting Group (2013) expects that the ability for ambidextry will prove to be increasingly necessary for companies in the future in order to be able to successfully use rapid technological change and the increasing dynamics of the business environment. Eder (2013) highlights ways in which organic, decentralised, flat and agile organisational structures with rapid decision-making, can enter into constructive collaboration with established, evolved organisational units that are more hierarchically structured and have comprehensive quality requirements. By minimizing routine, creativity, spontaneity and independence are to be preserved.

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2.4 Integration and Adaptation: Central Approaches to Developing Corporate Culture Corporate culture is based – as already explained earlier – primarily on two different areas: on the one hand, on internal integration, i.e. the way in which the handling of business processes and everyday life function inside an organisation; consequently, it concerns the structures and processes. Here it is mainly about the “inner life” and the mutual coordination and development. Thus, this area of design is particularly suitable when deficits in the way work is done in the company are identified. Much can be achieved through change, based on the mindset, the behaviour or the methods used. In contrast, the term adaptation encompasses the adjustment to external conditions as represented by the environment. So to the market, customers, technologies, partners, platforms and so on. It is about the interface from inside to outside or from outside to inside. An organization can only survive if it can reflect external developments internally. If the exchange is lost, i.e. if signals from the environment are no longer perceived and processed in terms of their relevance for the company, the company will develop past the developments of the market or miss them. This becomes particularly clear when a technology is missed: there are numerous examples from the watch industry, photo development, smartphone touch screens or now digitalization and e-mobility. Failure to adapt to technologies or customer expectations in good time can lead directly to the disappearance of entire companies, some of which have dominated an industry for decades, simply because the relevance of a development for the company’s own business is not recognized or is recognized too late. The second approach to adapting corporate culture must therefore focus on the exchange with the environment. In this context, too, the mindset, the behavior, and the methods used play an important role: closer cooperation in adequate ecosystems with customers, suppliers, partners, research institutions, universities, etc. can provide important impulses. The importance of diversity for corporate success, for example, also finds justification here: bringing together different genders, age groups, educational backgrounds, lifestyles, ethnicities, mentalities and so on is much more likely to represent society as a whole. This creates better conditions for adapting to developments in the environment. The external signals can be received more easily in the organization. Diversity creates more channels to the outside, the chance to perceive external developments increases through this very diversity. In shaping corporate culture, we must therefore open up these two central lines of vision: • What changes are necessary, important and desirable within the organisation? • How can we ensure adaptability to the developments of the environment inside the company? These two views have their justification and they are not congruent in approach, so a respective focus seems productive.

2.6  Key Points

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As a rule, of course, both areas are always affected by processes of cultural change and are also addressed simultaneously.

2.5 On the “Feasibility” of Corporate Culture: Systemic Reservations and the Courage to Act Corporate culture can be influenced anew at any point in time. On the one hand, it is the result of a learned process that is supported by narratives, prevailing mindsets and habits and represents the previous life and experiences in an organization. On the other hand, an organizational culture can learn through new stories and events or can be deliberately shaped and changed through interventions. The willingness to change tends to decrease over time, routines and habits continuously evolve, had and have their justification, but increasingly manifest a resistance to change. Nevertheless: Despite the numerous interdependencies and mutual influence, mindsets can be reoriented, behaviour can be changed. New methods and interventions have an effect on behaviour and new habits can develop from this. It seems important to have a systematic approach that develops both at the strategic level and clearly communicates at the operational level what culture is being sought. Breaking down the desired culture and embedding it in the daily processes of each employee, combined with the visualization of culture-compliant behavior, ensures successful change processes. The consideration of systemic aspects (Daimler 2008, pp. 43–62; Gaudart and Herget 2018, pp. 234–236) in the construction of new work and social realities should be a matter of course. How this can be done in detail is the subject of the next chapter.

2.6 Key Points 1. Corporate culture is shaped by the interactions of those endowed with formal and informal power. 2. Upheavals offer the opportunity to change and adapt the corporate culture. 3. Various possibilities and approaches for changing the corporate culture can be addressed; the role model behaviour of superiors in particular is considered to have a strong culture-building effect. 4. There is no one corporate culture; companies above a certain size have several subcultures. 5. The concept of ambidextry specifically uses the potential of different corporate cultures to increase competitiveness. 6. The internal integration of structures and processes creates efficiency. 7. Adaptation ensures the exchange of the company with the corporate environment. 8. Corporate culture can be shaped at any time! However, this does not mean that it is easy to achieve. Courageous action is definitely required.

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References Boston Consulting Group (2013) Ambidexterity: the art of thriving in complex environments. https://www.bcg.com/publications/2013/strategy-­growth-­ambidexterity-­art-­thriving-­complex-­ environments.aspx. Accessed 17 Nov 2019 Daimler R (2008) Basics der Systemischen Strukturaufstellungen. Kösel, München Eder M (2013) Organisationale Ambidextrie. Conference paper: conference: disruptive technologies & innovation minds. https://www.researchgate.net/publication/292298897_ ORGANISATIONALE_AMBIDEXTRIE. Accessed 17 Nov 2019 Gaudart A, Herget J (2018) Organisationsaufstellungen – Eine systemische Methode zur Diagnose von Konflikten, Treibern und Barrieren im Kulturentwicklungsprozess. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best Practices. Springer, Wiesbaden Kotter JP, Heskett JL (1992) Corporate culture and performance. Free Press, New York Luhmann N (1984) Soziale Systeme. Suhrkamp, Frankfurt Radatz S (2009) Veränderung verändern: Das relationale Veränderungsmanagement: Die zukunftsweisende 4. Schule des Veränderungsmanagements. Literatur VSM, Wien Schein E (2010) Organizational culture and leadership, 4. Aufl. Jossey-Bass, San Francisco

3

Architecture of Corporate Culture: An Operational Design Approach

Abstract

Corporate culture can be designed and developed. In this chapter, we first develop a guiding architecture model for corporate culture. This model and its implementation form the basis for a targeted and sustainable design of the corporate culture. We distinguish between three levels: the first level, here called the strategic level, identifies the totality and the individual elements of the desired corporate culture. The view is holistic, encompassing the entire company. We refer to the second level as the action level, where incremental, partial or overall measures are taken to shape the corporate culture. This is where the individual objectives from the strategic level are transferred into daily practice. It therefore takes into account the processes, framework conditions, structures and evaluation systems. We refer to the third level as the selective level. This encompasses the concept of culture hacks, whose task is to repeatedly focus on the day-to-day work in terms of its conformity with the goals of the corporate culture, to review it and, if necessary, to take corrective action. These three levels should always be thought of together, and only their interaction yields the maximum benefit. Finally, a generic process model is presented. This offers a systematic approach that comprehensively considers all aspects of change processes, from conception, planning and implementation to evaluation and controlling. In this chapter, the various phases are described and discussed. The Culture Excellence process has been proven in practice and provides the basis for the concept developed in this book for shaping corporate culture.

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A planned approach to change processes requires clear premises and a systematic approach. Reference models fulfill this task: They provide an orientation framework that can be used as a basis and blueprint in corresponding projects. A clear architecture of the chosen model also creates an overview and conveys the interrelationships between the individual levels. Finally, a generic process model provides certainty in the individual phases. These fundamentals are laid out in this chapter.

3.1 Meeting the Complexity of Corporate Culture Through a Systematic Approach Corporate culture can be shaped and developed. However, in order to move from arbitrariness and randomness of development to a consciously controlled management process, it is recommended to use conceptual and methodical building blocks that are theoretically justified on the one hand and have proven themselves in practice on the other. This systematic approach and its implementation are of fundamental importance for the strategic design of corporate culture. Corporate culture is rightly regarded as diffuse and not easy to grasp. It is therefore all the more important to separate the individual levels of corporate culture analytically so that they can be addressed precisely. If concepts for shaping corporate culture remain on a general level, there is a risk of getting lost in partial aspects and mixing up strategic and operational aspects. As a result, a clear picture of the appropriate level of action can easily be lost. For this reason, the focus here is on the architecture of the phenomenon of corporate culture as it appears from a design perspective. At the same time, it is also a framework, i.e. a theoretical frame of reference that clearly locates the individual initiatives, strategies, measures and evaluations and thus assigns them to the various levels of action in a comprehensible manner. On this basis, a generic process model is developed. The process documented in it offers a systematic approach that comprehensively takes into account all aspects of change processes, from conception, planning and implementation to evaluation and controlling. This overall view of the process of culture development clarifies the various phases with their respective goals and tasks. The Culture Excellence Process has already been used frequently in practice, it has proven its value and provides the basis for the concept developed in this book for shaping corporate culture.

3.2 The Integrative Corporate Culture Architecture Model The integrated architecture model of corporate culture consists of three levels. At first glance, these levels appear to be relatively independent of one another, but if you want to achieve the greatest possible effect in sustainable cultural change, they should be viewed in an integrated manner – because they only develop their full potential when they work

3.2 The Integrative Corporate Culture Architecture Model

Focus

Level

Approach Prerequisite

Vision, whole company

Strategically Mindset holisc, total

Selected areas of culture change

Operaonal incremental, paral

Behavior

Spot reflecon

Mindset

Everyday life, Immediate behaviour

Methods

Shared values and understanding

Mission Statement and Values; Audit; Strategy

Direct approach in the area of responsibility Clarity about desired behavior; Courage of the leadership forces

Processes of culture change; KPI

Culture Hacks

35

Success trend

Effect slow

quick Sync and correc ons by n17t01

Fig. 3.1  The architecture model for culture change

together. Moreover, they are interdependent; the upper levels determine the framework for the subsequent levels. The model connects the conception with real behaviour and enables an immediate reflection that allows a permanent reconciliation of both, of the conception and the behaviour. The orientation towards the architectural model prevents cultural initiatives from remaining at the strategic level or getting lost in disjointed individual initiatives. Figure 3.1 presents the model with its three levels and summarises its main directions and effects. The individual elements are then explicated in the following chapters.

3.2.1 The Strategic Level: Vision and Strategies Without a comprehensive picture of the desired corporate culture, all efforts remain piecemeal. Of course, in some situations it can make sense to select individual, urgent and important aspects and to work on them immediately, but it is more effective to give preference to a systematic approach. The effort required for this is clear and this strategic level is above all essential in order to make the importance of the topic clear in the company and to make it understandable and comprehensible to all employees. There are some standard models in the literature that provide such a vision of a comprehensive corporate culture. However, it is argued here that corporate culture should always be something very individual; standards with a universally valid claim cannot be convincingly put over a specific company according to the view advocated here. The concrete procedure of the conception of the strategic level is presented in detail in the following chapter.

3.2.1.1 Focus: Vision The larger and more complex an organization is, the more different corporate cultures will be found. Nevertheless, a harmonized picture should be strived for, if possible, in order to

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answer the question in unison as to what actually constitutes and should constitute this company. To this end, it is essential to understand the company as a whole and to evaluate how the currently prevailing corporate culture is characterized, where its strengths and weaknesses lie, and which corporate culture is desired in which specific aspects. All measures derived from this in organisational sub-areas should result from this image. Consequently, it forms the reference point for the corporate culture to be anchored in the company. It represents, so to speak, the mantra of management, which should not only be spoken at every opportunity, but also exemplified – by all managers.

3.2.1.2 Level: Strategy A strategic orientation presupposes that goals are derived from the vision, that prioritisation takes place and that appropriate resources are made available for realisation. In cultural work, longer time horizons should also be worked with. Many measures can be implemented in days or months, but a changed, evolved corporate culture will take years. If the vision is not to become a chaos of activities, a strategy is needed that summarizes the priorities in a roadmap. All managers should know this overall strategy and continue to cascade the strategies for their respective subarea from it. 3.2.1.3 Approach: Mindset The addressee of the strategic level is above all the mindset: i.e. the attitude as the basis and starting point for action. The mindset constructs the framework, forms the paradigm for the approach and behavior to be chosen. The image produced of the corporate culture to strive for should be widely accepted, both by management and by all employees. Without understanding the motivation behind the culture journey, without understanding the individual cultural traits emphasized, a link to individual concrete actions will not be achieved. At this point, the focus is on the knowledge and the will, i.e. the head and the heart. It must become comprehensible why and due to which circumstances a change is necessary, why the previous culture is no longer adequate, why the advised culture is superior, and what would happen if nothing happened, i.e. nothing was changed. The goal is to get a “yes” to the targeted culture, a shared commitment, from all levels of management and from all employees. There will always be some employees (and managers) who will not be fully behind the vision and strategy, these should then be convinced by the results over time if possible, although their active participation in the change must always be demanded. 3.2.1.4 Prerequisite: Common Values Corporate culture concerns the basic constitution of an organization. Not all facets of corporate culture can be made explicit. The iceberg model is often used to describe corporate culture, according to which the visible only makes up a small part of the corporate culture. At the same time, it makes clear that many facets of corporate culture are of an invisible and unconscious nature. If possible, all employees should be reflected in the formulated vision of the corporate culture. A broad discussion of the cultural characteristics

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considered necessary should take place at all levels. It is essential to include all hierarchical levels. This places special demands on all managers, who should also be specifically trained for this task. Cultural work is always sensitive, because it is about promoting understanding, and the appropriate empathy for this must be developed, it cannot be assumed per se. Shared values are the canon of a common understanding of the company’s concept and reality based on them.

3.2.1.5 Methods: Mission Statement, Audit and Strategy Three central instruments are used here in particular. Firstly, the conception of the desired corporate culture, i.e. the systematic elaboration of the individual desired cultural characteristics. The result serves as a guiding principle and reference point for future cultural work. This must then be cascaded and adapted to the individual areas (functional areas, locations, etc.) in the later course. Secondly, an audit is proposed to determine the current status. The audit as a systematic stocktaking shows where one currently stands, where strengths, but also weaknesses or deficits exist and thus simultaneously shows the necessary need for change. Finally, in the third step, the cultural process is cast into a strategy. Goals, strategies, priorities, resource requirements, time dimension, evaluations, roll-out concepts become evident in a roadmap as a cultural journey. To remain in the linguistic image, all employees know where the journey is going and what will be required of them in order to reach the goal. 3.2.1.6 Success Tendency The term “success tendency” is used here to outline the direct influence of this architectural level on a change in corporate culture. This strategic level is a fundamentally necessary but not sufficient activity. Without it, most initiatives will end in randomness or worse, chaos with frustrated managers and employees. This activity addresses the mindset, but a change in everyday life will only become apparent in the subsequent concretization in the following levels. To put it more bluntly, this activity does not yet change anything discernible (or not yet much), but without it, sustainable change cannot occur at all. Therefore, its success tendency is classified as neutral in its immediate impact on the corporate culture. 3.2.1.7 Effect The sustainable success of this measure will only be measurable in longer-term timeframes, but its immediate effect will unfold in the next two levels. Of course, partial change should already be observable in quarters, but it is a longer-term journey. Patience is required, possibly readjustment and shifting of priorities, but the desired image of the desired corporate culture should never be lost sight of.

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3.2.2 The Action Level: Measures and Processes From vision to daily action, that is the next level of cultural work. Here, what is envisioned and aspired to as a vision is implemented. How does the cultural change affect the processes, what is different from the past, what expectations are placed on management and employees, what do the concrete measures look like, what is used to measure the success of the individual processes? All these questions are answered here. The concrete methodology is dealt with in detail in Chap. 8.

3.2.2.1 Focus: Selected Areas of Culture Change From the picture developed, the vision of the desired corporate culture, those areas are now to be selected and placed in focus which are to be strategically addressed with priority in the respective implementation phase. The organisation with its sub-areas must not be overburdened, not everything can be changed at the same time. This is where the management of the different hierarchical levels is most in demand. They must determine what is to be implemented in their own area of responsibility and when. For this purpose, the existing processes must be evaluated and the necessary adjustments identified. 3.2.2.2 Level: Action The culture change requires an adjustment of processes and structures. This is best done with the active participation of all affected employees. At this point, the cultural work becomes concrete: what changes, which new behaviors are adequate? On this second level, the mindset is linked to active action. The employees involved in the respective processes are in demand, the coaching role of the managers is enormous, they lead the process, steer it and have to make sure that it takes place in a target-adequate way. The implementation is therefore always partial and the process for optimization can be incremental. A concrete approach to its application will be demonstrated later. 3.2.2.3 Approach: Behaviour New routines must be developed, new collaborations practiced and, if necessary, new structures established for the individual processes. Expectations of employees and colleagues must be proven in daily behavior. This will not be smooth, a certain period of adjustment will be necessary. The new behaviour also needs to be tried out first, there should be room for adjustments and learning processes. New routines of action must first be developed and established. Previous assessment schemes often need to be revised, as new behaviours should now come to the fore, these are to be subjected to feedback. Assessment standards tailored to the old state prove to be rather obstructive to support the cultural change process. 3.2.2.4 Prerequisite: Direct Approach in the Area of Responsibility The management of all hierarchical levels is required at this architectural level. All processes and structures in one’s own area of responsibility should be evaluated: are they still

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in line with the vision of the new corporate culture? Where is the need for adaptation greatest? What should be changed? How should employees be involved so that they do not get the impression that something is being imposed on them? But also the overarching area, the interaction between different areas of responsibility should be analysed with regard to the potential for change, because this will be just as affected by a cultural adjustment. Appropriate adjustments should be evaluated and formulated.

3.2.2.5 Methods: Culture Change Processes and KPIs A suitable methodology here is a procedure that systematically analyzes the individual processes and, if necessary, develops a redesign. This procedure will also be presented in more detail later (Chap. 8). It is important not only to involve the employees, but also to have them take the lead in the redesign and to clearly identify what has proven successful so far and what should be done differently. As a second methodological area, the KPIs, i.e. the key performance indicators, are to be addressed as the metrics for evaluating the individual processes. The choice of KPIs determines what employees pay particular attention to. This must directly reflect the desired behaviors. If more risk-taking is desired, then this must also find a space as a success criterion. If more trust is required, then this must also be considered as a benchmark. This is a creative process that probably also needs to be adjusted in several iterative loops to find an optimal configuration. 3.2.2.6 Success Tendency This architectural level aspect represents the heart of the cultural work. This is where the corporate culture is lived, this is where the results must be seen. If the “why” from the vision is understood and accepted, the “how” is delivered at this point. Consequently, this step has a high relevance and a directly resulting contribution to success. 3.2.2.7 Effect The conception of new routines and structures takes time and also requires a certain amount of time for testing and fine-tuning, but then the results should have an immediate effect. The results are available quickly, but it can still take a considerable amount of time for the new routines to develop. However, the impact will be visible within days and weeks – but it will take several months before it becomes a natural habit to live in new processes and structures.

3.2.3 The Level of Reflection: Culture Hacks as a Constant Compass How do you manage to ward off the routines of the past that may creep in, how do you maintain awareness of constant cultural work, how do you manage to implement a compass that permanently shows whether you are still on the right track? This important function in the third level of the architecture model is performed by the so-called culture hacks.

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Culture hacks are understood to be “spontaneous” interventions that bring current behavior into relation with the desired behavior with the goal of identifying divergences and thereby triggering reflection. This creates the opportunity to review the mindset and adjust it if necessary (Herget 2021). Example of a Culture Hack A sequence of conversations from a routine meeting of the corporate culture project team with the chief executive officer (CEO) of an international corporation (Purps-Pardigol 2019, transcribed for meaning): Team: “We want to survey the employees about the occuring culture problems in the company holding.” CEO: “Bullshit, we’ve been doing culture change for a while, we know that, we don’t need that.” Team: “Yes, we want to, we think it makes sense, we think it’s good.” CEO: “I don’t want that, don’t you understand? I don’t want you to question the employees.” Team: “Tell me, CEO, are you crazy? You told us to do the process for you, you empowered us to do it. We’re just going to do it.” And the team walked out of the meeting. How did the story continue? The team did the survey and came back to the same round with the results. And the first thing the CEO said was: CEO: “Listen, I have to apologize first, where do I get off telling you not to do something where I previously asked to take that process authority. I’m sorry. It doesn’t matter what came out of it, I’m sorry. And I say that deliberately in the same round because I don’t want to give the impression that I wanted, nobody gets that. And I have to apologize a second time for the whole panel, not just for me, how come the panel didn’t say, gee Alexander …”

Admittedly, the example reflects an unusually massive culture hack, which even goes from the employees towards their superiors. At the same time, it illustrates the possibility of this instrument: the desired behavior, as it was anchored in the mindset, is confronted with the behavior actually practiced. Also, the learning consequence becomes very clear from the example. The intervention also did not take place as a consciously set culture hack, but had the same effect. A more detailed description of the method can be found in Chap. 8. Culture hacks are the “reminder” that ensures that culture work remains in the consciousness as a constant process, that ensures that meta-feedback is given in the sense of “is the current behaviour appropriate and in line with the goal”? At this level, all managers are especially called upon. Because they have to develop the right culture hacks, and without specific training, this too will generally not succeed easily. A mature corporate culture is also visible in the fact that culture hacks themselves are used by employees in teamwork or individual work. They are a powerful tool in aligning mindset and behavior. They ensure that congruence is maintained.

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3.2.3.1 Focus: Lived Everyday Life A new corporate culture must be lived every day, it should become a new habit if it wants to have a lasting effect. Nevertheless, persistence, falling back into old patterns and habits is omnipresent. In the end, behaviour that has been lived for years has to be changed, and this cannot be done immediately by acclamation or decree. Humans are creatures of habit, as the saying goes, so it takes a long time to learn a new behaviour or to unlearn an existing one. These learning and behavioral processes are not trivial, they require certain trigger points to keep coming back to consciousness, a kind of reminder that lets you check whether you are also acting in the new paradigm. The Culture Hacks are ideally suited for this. 3.2.3.2 Level: Reflection Through culture hacks, one’s own behavior, or that of teams, is immediately and spontaneously questioned. It is compared whether the practiced behavior corresponds to the normative intention, i.e. the desired corporate culture. This sets reflections in motion that check whether the attitude in the sense of the mindset and the behaviour are congruent. They are used especially by managers whenever one suspects behavior that deviates from the desired behavior. One thus “catches” employees in a situation where there is a deviation from the intended corporate culture. By becoming aware of the deviant behaviour, the attitude is reflected upon and the learning process can be re-sharpened. Culture hacks are used selectively. 3.2.3.3 Approach: Mindset The culture hacks address the respective mindset. Are the current actions in line with the desired premises? The respective context should always be clear and unambiguous: the immediate behaviour is currently questioned, it is an immediate feedback on a shown behaviour, without any time delays. The learning effect is immediate, the immediate reflection offers the opportunity to question and adjust one’s own behaviour. The behaviour shown is the cause, but the thinking and the attitude are addressed, the recourse to the behaviour becomes self-evident. Culture hacks consequently have an immediate effect on the mindset and only then in consequence on the behaviour. 3.2.3.4 Prerequisite: Clarity and Courage Culture hacks do not work in diffuse, ambiguous situations. It must first be clear what thinking and attitude are required to act congruently. There should be clarity about the desired culture and a corresponding behavior among the employees. The individual characteristics of the desired corporate culture, whether high innovativeness, pronounced collaboration, courage and initiative, customer orientation and so on, should be anchored in the consciousness and supported. Only then do culture hacks have an effect when the current behaviour is directly and confrontationally questioned: is it, to stay with the above examples, innovative, collaborative, courageous and customer-oriented?

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Secondly, the use of culture hacks requires courage on the part of those who use them. At least in the initial stages, these are predominantly the managers. They must have the courage to cause situations that are certainly irritating and therefore unpleasant at first; they should be able to endure being “caught” by the employees. In constructive work environments such interventions will be productive, but these environments often have to be created first. Managers will likewise need to learn the construction, use, and feedback on culture hacks in order to overcome a reluctance to use them. However, it will take some courage to make them a habit and to use them frequently and effectively, at least in the early stages of the culture change process. Would you have had the courage to disagree with the chairman of the board, as shown in the opening example?

3.2.3.5 Methods: Culture Hacks Culture hacks are a method that initially causes irritation. Culture hacks question the behaviour that has just been practised and put it in context with the desired corporate culture. Culture Hacks are suitable for use in almost all areas of the company. Wherever there are discrepancies between the adopted corporate culture and the actual practiced behavior, they achieve their effect. Irritating methods have been used successfully in many areas of psychotherapy for a long time. “Paradoxical interventions”, for example, enjoy a high level of popularity. 3.2.3.6 Success Tendency Culture hacks – used thoughtfully and congruently – are an excellent feedback instrument. They immediately show whether the behavior practiced corresponds to the goals set. They serve directly for reflection and thus offer the possibility of initiating or re-sharpening learning processes. Applied in a constructive atmosphere, they have an immediate effect and help to internalize the new, desired corporate culture immediately and to anchor it sustainably in an organization. Their effect is high – provided they are used wisely and the corporate culture already allows for such immediate interventions. 3.2.3.7 Effect The great advantage of culture hacks is their unequally fast effect due to their spontaneous use. The addressed topic is immediately reflected upon, one’s own or the team’s behaviour can be checked immediately and the intended consequences arise almost by themselves, without any great necessary need for interpretation on the part of the manager or the employees using them. Culture Hacks have an immediate effect  – this makes them an important instrument in the architecture of culture work.

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3.3 An Approach to Shaping Corporate Culture: The Culture Excellence Process We have previously presented the individual levels of cultural work systematically in an architectural model, now let us look at the individual phases of cultural design. On the one hand, these are to be seen temporally, as phases that should take place in a certain order. On the other hand, methodologically, they focus on different aspects of cultural design with different addressees. The results of these are in turn prerequisites and foundations for the next phase. As a rule, the next phase is also not started until the previous one has been completed; certain iterative loops and reversals with possible fine adjustments can certainly be useful. The flexibility of the process model is given, and under certain circumstances individual phases can be omitted, but a systematic development is likely to yield the highest sustainable benefit. This process is called the Culture Excellence Process. It clarifies the sequence of possible cultural design projects from the first phase to completion (which will never happen, however, as cultural work is a continuous process) and ensures a planned and holistic approach to achieving the desired result. Figure 3.2 illustrates the process:

3.3.1 The Individual Phases of the Culture Excellence Process The outlined Culture Excellence process follows a generic procedure model: from goal setting to evaluation. In the following, we briefly characterize the individual phases. The following chapters of this book are dedicated to each individual phase separately and in depth.

3.3.1.1 Model Development The basic concern of the concept developed here lies in the individual consideration of corporate culture. Unlike most other models, it is not standard models that should form the basis for shaping corporate culture, but the individual company with its unique positioning

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Fig. 3.2 The Culture Excellence process

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and its own framework conditions and requirements. In this phase, the relevant cultural factors that are responsible for the success of the company are identified. For this purpose, proven tools are used as methodological instruments. With these, the relevant culture factors are systematically structured on three levels: the environment, the internal area and the individual and team performance. In the environmental interaction, the focus is on the ability to adapt to the framework conditions; in the internal area of effectiveness and efficiency, the focus is on the function of coordination and integration; and in the area of individual and team performance, the focus is on the promotion of high performance through the creation of appropriate contextual factors. The supplementary culture-­diamond model integrates these different perspectives in the elaboration of the company-specific culture model. This approach can take place both at the level of the company as a whole and cascading down to the various management and functional areas. Although some culture factors should apply consistently to the entire company, there will always be some very specific factors that are responsible for the success of areas or departments. Here, too, the courage to individualize is required. The goal in each case is to condense the culture factors to as few as possible. If possible, the number should be in single digits, otherwise the project is likely to get out of hand due to too high a demand.

3.3.1.2 Audit Concept The audit concept serves to analyse the characteristics of the important cultural factors identified above in the company. A subsequent diagnosis – for which various other methods and procedures are available – and prioritization is essential for the further procedure in the project for culture design. The audit, just like the model development in general, probably sparks an intensive discussion in the companies about the corporate culture in the respective organizational subareas for the first time. This process can be extremely helpful in creating and sharpening sensitivity for the topic. 3.3.1.3 Maturity Model Following the analysis, the selected culture factors can be located in a maturity model. In addition to other evaluation methods, the maturity model represents a further diagnostic instrument. This classification can also be accompanied by numerous discussions and thus prove to be an extremely constructive process. The maturity model serves to locate the current expression of the individual culture factors with regard to different development stages of professionalization. As a result, it becomes clear where one stands – and just as importantly, where one would like to develop. The maturity model provides a good benchmark as a marker on the cultural journey. This maturity model should also be implemented in the company in a cascading manner. 3.3.1.4 Strategy Development The process of strategy development, i.e. the derivation of goals and corresponding strategies, serves as the basis for the subsequent development of measures. Generally optional

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strategies result from the location in the maturity model and the desired development. On the other hand, however, this also represents a creative process. Due to the interactions of individual strategies and measures, multiple effects are to be expected, so that so-called levers can also be identified which act simultaneously on several cultural factors. The selected strategies can be well located in an overview roadmap.

3.3.1.5 Method Selection As we have already explained several times, interventions, methods, tools and instruments also influence the mindset and behaviour of the members of the organisation. Therefore, this chapter is of central importance, it fills the cultural journey with concrete life, so to speak. This is because methods (as a collective term for all intervention measures) can influence mindsets or lead to changed behaviour. They are therefore an important key to shaping corporate culture. In this section, a few of the many possible measures and methods are presented in order to show by way of example which intervention options are available from the extensive repertoire. The methods form the basis for the following change process. 3.3.1.6 Implement & Control All results only become apparent through implementation with subsequent evaluation. Here, too, it will be important to make a good selection: Where are which pilot projects suitable to enable a comprehensive roll-out afterwards, and where is a full-scale implementation throughout the entire company? As with every implementation, the success should also be monitored in order to be able to make possible readjustments in good time or to adjust the project as a whole. Due to the numerous interactions and the changing framework conditions inside and outside the company, the cultural journey can only be accurately predicted to a limited extent. A high degree of flexibility will be necessary in project management. Roadmaps, which also contain milestones that can serve as the basis for controlling or evaluation, are used here as central control instruments, also to ensure transparency of the entire project. Project support through individual coaching and an institutionalized exchange of experience for the responsible managers should help to significantly increase success.

3.3.2 The Culture Excellence Process as a Central Management Tool for Shaping Corporate Culture The Culture Excellence process with its respective phases is an important management tool for shaping the corporate culture. It is the task of top management to initiate, steer and evaluate this process. At the same time, this process represents the model at the top management level, which is to be cascaded and adapted at the lower management levels in order to ensure a uniform corporate culture. The respective adaptation is shown schematically in Fig. 3.3:

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Fig. 3.3  Cascading adaptation of the Culture Excellence process

3.4 Key Points 1. A structured and systematic process is recommended to shape the corporate culture. 2. The integrated architecture model of corporate culture allows a holistic approach to the design of corporate culture. 3. The strategic level draws the desired picture of the corporate culture for the entire company and the individual subdivisions. It provides the basis for the mindset of all those involved. 4. The operative level of action translates the desired corporate culture into daily action. 5. Culture Hacks are a constant reflection tool to identify divergences between the desired mindset and the demonstrated behaviour and to initiate and enable learning processes. 6. The Culture Excellence Process defines a generic procedure model for shaping corporate culture. 7. The Culture Excellence process serves as a central management tool at all management levels and keeps the process running.

References Herget J (2021) Culture Hacks  – Strategisch einsetzen! Mit gezielter Irritation zur gewünschten Unternehmenskultur, Springer, Wiesbaden Purps-Pardigol S (2019) Kulturwandel 4.0 bei der Otto Group: Tobias Krüger im Gespräch mit Sebastian Purps-Pardigol. https://www.youtube.com/watch?v=cCNqvdd5Pu0&t=1971s. Ab Min 31:15. Accessed 11 Nov 2019

4

Developing Your Own Culture Model

Abstract

Which corporate culture prevails in a company? Which would be desirable? In order to answer these questions, it is fundamental to develop a model of the various relevant factors of a corporate culture. In science and practice, various standard models can be found that are quite suitable for determining corporate culture. Some of these models are presented and discussed in this section. However, an individual model tailored to the specific company appears superior to the standard models. Each company has its own specific corporate culture and this fact is taken into account by individualization. In this section, a concrete approach is proposed. This is based on the culture-diamond-­ model, which allows for company-specific development and adaptation due to its inherent openness. This means that it can be adapted to new conditions and requirements at any time in the future. With this model, each company receives its own individual corporate culture model. The selected individual culture factors are to be compared for their congruence and support of the current and future corporate goals and strategies.

How can your own corporate culture be described? What are the cultural factors that should be consciously lived? Where are the priorities to be set, what is the reason for the success of the company, what do the customers value about the company, what do the employees and the partners appreciate? As we can see, the culture factors are likely to be different for each company. However, constructing an appropriate model as an adequate representation of reality is anything but trivial. Moreover, these selected culture factors should find general acceptance in the company and support the company’s goals and strategies. The following chapter deals with these questions.

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_4

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4.1 Why Is a Model Essential for Discussing Corporate Culture? Models are simplified representations of reality. Their constructive contribution lies primarily in the selection of a section of social reality and the condensation to the essential factors that are to serve as explanations of what is happening. The dangers are obvious: Reality is complex and consists of a multitude of determinants and the interdependencies that exist between them. Any arbitrary selection therefore runs the risk of inadequately explaining reality and neglecting important interrelationships. On the other hand, the desired focus requires a reduction of the multitude of factors to a manageable number. Well aware of these limitations, a pragmatic approach to the development of a company-­ specific model is presented. This serves to reduce the complexity of reality for everyday business to such an extent that appropriate strategies can be analysed, diagnosed, planned and implemented by managers. The level of detail of the models always depends on the existing competence of the organization: in a large corporation with its own staff departments, different demands are made than by the owner of a 20-person company. However, both have the same claim to successfully shape the future of the company. This is precisely where the strength of modeling lies: it makes sense primarily on a situational and individual basis, but nevertheless requires reference models to orient itself on for better focus. Another aspect appears to be important: the models are open and developmentally necessary slices of reality. They are only as good as they can represent the important parameters of the internal and external environment. However, this can only be determined ex-post, when it is later realized that some developments were not seen, i.e. “not on the radar”. If the culture-diamond model to be presented is seen as a living, dynamic and always adaptable surrogate, it can become a valuable management tool. These remarks are intended as a plea for the courage to develop an adapted model for one’s own company. This considerably increases the chances of considering it as an integrating component and expression of one’s own corporate culture. In application, the model can be used as a diagnostic and planning model and can be used for continuous corporate development.

4.2 Brief Synopsis of Different Corporate Culture Models Various models have been developed for the analysis, description and possible design of corporate culture. Some prototypical models, to which a certain relevance can be attributed in practice, will be briefly presented here.

4.2.1 Development-Oriented Models: The Graves Model The Graves Value System Model goes back to the developmental psychologist (and colleague of Abraham Maslow) Clare Graves (2002), a further development of his approach

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under the name Spiral Dynamics was written by Beck and Cowan (2007). This model provides the basis for some consulting concepts in the field of corporate culture, such as that of Bär et al. (2010) or of Sagmeister (2016). It is also an important basis for the model of Laloux (2015), who landed an international bestseller with his book “Reinventing Organizations”. The Graves model is based on an evolutionary perspective, according to which human cooperation in organizations can take on different phases of development. To this end, Graves has identified eight phases, all of which he considers to be of equal value. According to this model, companies pass through the individual stages; when the stage reached no longer allows them to respond to the current challenges in a problemoriented manner, the next stage is advised. The concept is to be understood as a stage model whose transitions can be promoted. The model provides a line of development that offers orientation. For the purposes of a selective and agile design of corporate culture, the model appears to be too descriptively oriented, too cumbersome, too slow in influencing and also not precise enough for specific aspects of the desired corporate culture.

4.2.2 Generic Models: Denison’s Organisational Culture Model and the OCI Model Another group of models is oriented towards cultural attributes that are defined as generally successful and provides these as a basis for evaluation. Two important representatives are, on the one hand, the model developed by Denison (2006), which is very widespread in practice, especially in the USA, and the Organisational Culture Inventory offered by Human Synergistics (Schuster 2006). Both models have in common that they are based on a predetermined set of cultural characteristics that are collected in a standardized procedure. The model by Denison (2006, p. 14 ff.), for example, assesses the following four cultural characteristics with the respective indicators: Involvement • Empowerment • Team orientation • Capability development Consistency • Core values • Agreement • Coordination and integration Adaptability • Creating change • Customer focus • Organisational learning Mission • Strategic direction and intent

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• Goals and objectives • Vision The undisputed strengths of these models lie in their rapid applicability and, above all, in their ability to provide a benchmark for intra-organisational comparisons, but above all also benchmarks with sectoral companies or with other companies in general. The major disadvantage, however, lies in their generic nature: all companies are measured with the same cultural characteristics, regardless of how significant these actually are for the company. However, the view here is that only an individual corporate culture can lead to the greatest possible success. Employees will also only be able to identify with this culture if it is described and developed from their own experience.

4.2.3 Problem-Based and Specified Models This class includes models that allow a certain flexibility in the selection of the culture factors to be assessed. These include the Repertory Grid (Krafft 2006) and the culture assessment by Sackmann (2006). These models are derived from the needs of the companies under investigation and are to a certain extent open-ended; they are based on flexible survey methods (questionnaires, interviews, group discussions, workshops). The advantage of a high degree of individuality is made possible, admittedly combined with the disadvantage that stringent inter-company comparisons with other companies will not be possible. However, from the point of view represented here, this is not important. Another very agile model is presented by Hermann and Pfläging (2019). Their process concept creates an architecture for transformation and is based on the Open Space method. This method is mainly used in large groups in the context of facilitation, its focus is on structuring and thematic processing of self-selected content. The goal is to fundamentally align companies to new requirements within 90 days. The focus is not explicitly on the specific cultural factors, but they are of course significantly affected by this radical transformation concept towards end-to-end self-organisation, team autonomy and decentralisation of decision-making power. In any case, this approach highlights the paramount importance of communication and participation. The “Culture Excellence” concept presented in this book can be placed in this category: it is open, flexible, and offers a structured approach and process methodology. At the same time, it can be scaled according to needs and can also be used in a very agile way. This model will be presented in the next sections.

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4.3 Developing Your Own Model of Corporate Culture: Integrating Different Perspectives Corporate culture affects the entire company. It is therefore important to integrate all areas into the consideration, because possible partial optimizations may have their justification, but remain limited in their effect. In order to avoid the danger of a limited perspective, different perspectives should be systematically adopted when identifying culture factors.

4.3.1 Taking Account of Different Perspectives In order to determine the individual culture factors, it is advisable to systematically take different views as a starting point. The following three perspectives are suitable for systematic consideration: • The company as a whole in its interaction with the environment (focus: adaptation) • The company as a system of value adding activities in the internal effect structure (focus: integration and coordination) • The company as a high-performance organization with personal and collaborative value adding activities. This approach, which simultaneously acts as a focus and a filter, makes it possible to identify in a concentrated way those cultural factors that are important in the respective perspective. In any case, the aim is not to identify as many factors as possible, but to reduce and condense them; for example, only 2–5 factors per perspective may be completely sufficient.

4.3.1.1 The Perspective of the Company as a Whole Success depends on numerous factors, and a different constellation of success patterns can be assumed for each company. The products, processes, competencies and the strategies pursued are too different, but above all the framework conditions, the market environment and the competitive situation are different. Each organization must therefore make a selection of the culture factors that are assumed to have the greatest outgoing effect. The success factors identified in the numerous studies on corporate culture provide an initial guide. A company can therefore be characterised by the following culture factors, for example: • Profitability (appropriate profit development, employee participation in profits) • Innovation capability (inventing and optimizing products, processes and business models) • Agility (pro- and reactive to market developments)

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• Trust culture and corporate social responsibility (internal and external) • Learning organisation (competence-increasing knowledge organisation) • Creation of meaning (value orientation internally and externally). We anchor these exemplary factors (which can be expanded or reduced) at the macro level. They apply to the entire company and have an effect both internally and externally and represent a pattern of action and reaction of the company in the competitive structure. They should be perceptible everywhere and guide the actions of employees.

4.3.1.2 The Company as a System of Value Adding Activities Within these framework conditions, every company carries out its performance processes, which should be provided effectively and efficiently wherever possible in order to generate outstanding added value. The possible effectiveness and efficiency factors, from which the culture factors can be derived, are primarily based on the management, control and organizational systems used in the company. Structures and processes represent the architecture of value creation. Depending on the maturity, structure, organization and size of the company, the efficiency and control parameters (standards, key indicators and benchmarks) available in the company can form a valid basis for determining important culture factors. Potential factors (see Malik 2014 for a representative example) may include the following: • Plan & set goals (Participation in goal setting? Goals and strategies known at all? Planning process accepted?) • Organize tasks & processes (transparency, responsibility and accountability?) • Implement goals & plans (incentives, degrees of freedom, empowerment and communication?) • Control & feedback results (priorities, feedback, reward and sanction systems?) • Decision-making (clarity, possibility of participation?) • Coordinate collaboration (support, willingness and ability to collaborate?) • Inform & communicate (information and communication channels, speed, trust, authenticity, truthfulness?) • Developing employees (further training, career planning?) Here, too, it is important to extract those factors that have a culture-forming effect, are specific and make a lasting contribution to competitive success.

4.3.1.3 High-Performance Organisation as a Result of Individual and Collaborative Value Adding Activities The aforementioned factors of both the overall company on the one hand and effectiveness and efficiency on the other have a direct effect on the performance of companies, they are a kind of “enabler” that create the framework for optimal working conditions. In other

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words, they represent the framework conditions, with one aspect still missing, namely both individual and team-based performance contribution. A central lever for the development of organizational high performance is the individual and collective willingness and ability to achieve the best possible performance. The following interrelationships between the key factors thus crystallize: • The goal is high performance in terms of selected standards and benchmarks • The factor corporate culture (role model behavior, communication, trust, etc.) is a central influencing variable for achieving high performance. • On the one hand, the necessary impact factor is the extent to which the individual’s willingness and ability to perform is linked to the company (perception, appreciation, affiliation, individual identification, collective identification). • On the other hand, the necessary effective factor is individual learning and growth (personal development, autonomy, empowerment, growth, expertise) as a prerequisite for learning and further development in the team and in the entire company. It is precisely the inclusion of the individual in these impact factors that shows the direct interaction of corporate culture on individual behaviour and the contribution of existing and to be developed potential to the common achievement of goals. Only this individual inclusion of each employee in the consideration completes the view.

4.3.2 Integration of the Views: Basis of the Own Corporate Culture Model The triptych excellence model (Herget 2018) lends itself to the integration of these three outlined views: The interdependent relationships in their mutual dependence and influence – both horizontally and vertically – can be taken into account, addressed in a targeted manner and developed by linking the three levels (see Fig. 4.1). The basis of all relevant cultural factors recorded for a sustainable constellation of success is the fundamental idea of integrative cooperation for all those involved in this process. Only this integrative view enables a holistic consideration of all relevant cultural factors, thus preventing uncoordinated, partial and possibly suboptimal derivation of measures and thus enabling stable success constellations for the company. How this approach can be used to analyze and determine company-specific culture factors is presented in the next section.

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4  Developing Your Own Culture Model Triptych Excellence Model: Pathways to High Performance

Profitability

Organize tasks and processes Purpose

Plan and set goals

Developing employees

Implementing goals and plans

High performance

Learning and growing

Belonging

Innovationcapability

Checking and reporting results

Corporate culture Learning organization

Inform and communicate

Decide

Agility

Coordinate cooperation

Culture of trust and CSR

Fig. 4.1  Triptych excellence model – pathways to high performance. (Herget 2018)

4.4 The Culture-Diamond-Model: Procedural Concept for the Identification of the Own Corporate Culture The following model of the cultural diamond (Fig.  4.2) is well suited as a procedural model for identifying one’s own specific cultural factors. This should include all three perspectives outlined above. Of course, this model can also be used as the only perspective if no further differentiation is to be made between the three perspectives of the company, the internal system and the individual and collective. This may be sufficient for small and medium-sized enterprises. Based on the shape of a diamond, we divide it into six different areas:

4.4  The Culture-Diamond-Model: Procedural Concept for the Identification… • • • •

• • • •

Why do our ... What do you think ... What makes us attractive ... ...

• • • •

Why are we losing ... Why apply ... Why quit ... ...

What will customers ... What are you... What will the employees ... ...

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Future

Strengths

Opportunities

Weaknesse

Risks

Past

• • • •

• • • •

What opportunities ... ... new collaborations? ... new customer groups? ...

• • • •

What dangers ... ... technologies? ... cooperation? ...

What is the core ... What values ... Why were we founded ... ...

Fig. 4.2  The culture diamond model

1. 2. 3. 4. 5. 6.

Past Our strengths Our weaknesses Opportunities Risks Our future

Subsequently, questions should be answered (in discussions, interviews, workshops, surveys) on the respective areas that provide clues to the important cultural factors. In doing so, four additional perspectives can be taken: From the perspective of owners/board of management, managers and employees, customers, external stakeholders (and even competitors). The questions serve to support the search and the visualization of the relevant culture factors, they can be specifically supplemented. The questions listed serve as a first orientation and should of course be adapted to your own company. The possible set of questions is deliberately broad and goes beyond actual cultural factors, yet important cultural characteristics can be crystallized from the answers, so a translation effort is always necessary here. Past (What Has Led to Our Growth and Established Our Market Position?) • What is the core of our company (vision, mission, what makes us tick)? • What values have guided us? • Why were we founded? What was the founding idea?

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• • • • • • • • •

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Where is the meaning of our existence? How do we enrich the world? What made us strong? Why did our customers buy from us and not from the competition? What have we done better than the competition? What worked well for us, what was handed down? What didn’t work well for us, but was passed down anyway? What established rituals strengthen us? What was the prevailing mindset? What was the importance of the individual employee, the team?

Our Strengths (What Should we build on, Keep?) • • • • • • • • • • • •

Why do our customers buy from us? What do our regular customers appreciate about us? What makes us attractive to new customers? What makes our products and our offer? What makes our business model so robust? Where do we have competitive advantages over the competition? Why do our employees like working for us? Why are we attractive to applicants? What works particularly well for us in the internal area? Which rituals stand the test of time? Which mindset strengthens us? How is the contribution of employees and teams acknowledged?

Our Weaknesses (Where Is There Strong Potential for Improvement, Where Are Our “Pain Points”, Where Is There a Need for Action?) • • • • • • • • •

Why are we losing customers to the competition? Why don’t talented people apply to us? Why do our employees quit? Where is the competition better? What is not working well internally? Where are there friction losses, inefficiencies, sand in the gears? Which rituals do not meet the current requirements? What mindset is hindering our development? Where are we not utilizing the potential of employees and teams?

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Opportunities (What Opportunities Arise for Us From Environmental Development?) • • • • • • •

What opportunities can arise from new technologies? What opportunities can arise from new collaborations? What opportunities can arise from new customer groups? What opportunities can arise from changing value creation structures? What opportunities can arise from a business model change? What opportunities can arise from good internal processes? What opportunities can arise from new employees?

Risks (What Dangers Do Environmental Developments Pose for Us?) • • • • • • •

What dangers can arise from new technologies? What dangers can arise from new collaborations? What dangers can arise from new customer groups? What dangers can arise from changing value creation structures? What dangers can arise from a business model change? What dangers can arise from inadequate internal processes? What dangers can arise from a lack of attractiveness for employees and business partners?

Future (How Do We Secure Our Competitive Position in the Future; Which Cultural Traits Should We Particularly Cultivate?) • What will customers appreciate about us and our offer in the future? • What in particular should distinguish our products and the customer benefits they provide? • What will employees value about us in the future? • In which internal processes are we exemplary? • What will make us an attractive employer in the future? • What do our competitors envy us for? • What should other stakeholders (investors, the public, …) value about us in the future? • What is the core of our cooperation, the joint provision of services? As detailed as the discussion on identifying culture factors may seem at first glance, the goal is to condense it to the essential factors: this discourse should lead to the prioritization of about five to a maximum of 10 such culture factors for one’s own company in a selection process. It is entirely possible to include new culture factors in further “rounds” (or to

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eliminate or remove from focus previous ones that have either become obsolete or have already reached the targeted level). Particular focus should therefore be placed on cultural factors that can be influenced in as controlled a manner as possible. If there are uncertainties here, there are also other supporting methods, such as the influence matrix developed by Frederic Vester, which establishes a cause-effect relationship and divides it into active (influencing other objects) or passive (influenced by other objects) factors (Vester 1970, p. 165; see also Sect. 9.2).

4.4.1 An Example: Recording Culturally Relevant Factors A short example will outline a possible application in the following in order to make the procedure more vivid. We will take as a relatively simple example a small media company with about 20 employees that has been active on the market for 10 years and advises companies on digital transformation and designs and manages corresponding digital presences and communication and interaction channels.

4.4.1.1 The Culture Diamond Model: Company Perspective The following relevant culture factors emerge as the results of group discussions focusing on the “company” perspective: Past tense: • Customer proximity • Joint developments with the customer • Strong communication skills, translation of what is technically possible into what makes business sense • Joint project teams Strengths: • Good references • Relationship of trust with customers Weaknesses: • Not being a leader in innovation • Low multiplication of solutions Opportunities: • Cooperation with agencies • Cooperation with technology suppliers (tool box) Risks: • Too little adaptation of new technological developments Future: • Reliability as a partner • Stable solutions • Good working atmosphere, appreciation of employees, development opportunities

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4.4.1.2 The Culture Diamond Model: Internal System Perspective The following relevant culture factors emerge as the results of group discussions focusing on the “internal system” perspective: Past: • High transparency • Common objectives and planning • Fast communication Strengths: • Short distances • Trust Weaknesses: • Too few standards in the process • Collaboration is random, not systematic and supported process Opportunities: • Improve exchange of know-how with external parties Risks: • Too little systematic further training Future: • Individualism lived in the team • High level of employee participation in shaping the future • Empowerment, intrapreneurship

4.4.1.3 The Culture Diamond Model: Individual Perspective The following relevant cultural factors emerge as the results of group discussions focusing on the “individual” perspective: Past: • High identification • Joint successes Strengths: • Appreciation of the individual • Trust Weaknesses: • Too little specialization, know-how development • Too little supported collaboration Opportunities: • Employee rotation with partners (job shadowing) • Mentoring Risks: • Neglect of internal development

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Future: • Sharing in the success • Sociocratic management models • Identification through a high level of participation in the company’s activities

4.4.2 An Example: Condensation to Company-Specific Culture Factors The success-relevant culture factors derived as examples above should then be condensed further in a second condensation process. The following could then be selected as possible corporate culture factors with high priority and relevance: • • • • • • • • • •

Distinct customer proximity and orientation Developments in partnership with our customers Relationships of trust with customers and partners Lively cooperation with our partners Innovative strength Living internal collaboration High level of trust within the company High level of employee participation in the company’s development Empowerment of employees Professional and personal development of employees

With these hypothetically identified corporate culture factors, the company can then plan the next steps to shape and optimize the corporate culture. This process of selecting the relevant culture factors is critical to success. For example, in the example above, most of the culture factors were crystallized from the positive state descriptions, but the innovation strength culture factor was crystallized from a more perceived deficit; the same is true for internal collaboration. These thus come into focus and can be consciously addressed and given the attention they are perceived to have in order to be able to play their perceived important role in the future. In the process of selecting the culture factors, it is also possible to work with different priorities. So, for example, in an initial selection process, many culture factors can be identified and then rated with priorities 1–3. Then, the highest rated ones (priority 1) are selected, and the others then represent candidates for the next rounds. As already noted, this process should be carried out on the different divisions of the company so that each sub-division receives “its own” corporate culture model.

4.5 Alignment of Corporate Culture with Corporate Strategy Alignment, i.e. the coordination and alignment of pursued goals and strategies, is the final step in the conception of the company-specific culture model. Above all, the selected cultural factors should also demonstrate their future relevance. On the one hand, this is

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necessary to sustainably support the company’s competitive strength; on the other hand, it also serves as a justification for the corresponding cultural project. After all, the company is to be made fit for the future. For this purpose, it is analyzed in coordination with the business strategy whether the selected cultural factors also promise direct support of the corporate strategy. Each selected culture factor should be compared with the current corporate goals and strategies. Do the culture factors promote the goals and strategies? Or are they indifferent, i.e. without influence, or do they even conflict with them? This alignment should be seen as critical to success. In this way, it may be possible to prioritize cultural factors that have not yet been prioritized, while others are more likely to be put on the back burner. Alignment Example In the corporate goal of our example company, it is formulated to seek strategic partnerships with companies of different value creation stages in the future. This gives the culture factor “Living cooperation with our partners” outstanding significance and can be prioritized further. This is because the optimized practices to be developed in it can be of great advantage in possible strategic partnerships in order to quickly realize cooperation potentials. The process of developing an individual culture model can therefore go through various filtering procedures. Condensation to a few factors is usually advisable; often too many relevant cultural factors are determined in the initial analysis, the simultaneous focusing of which in subsequent phases can overwhelm the organization. The following filters are useful in the condensation process: 1 . Prioritization according to own criteria (in the team) 2. Cross-linking matrix (for the selection of particularly effective cultural factors) 3. Alignment with corporate goals and strategy (for acceptance and future relevance) 4. Combination of the above options. In larger companies, this selection process should also be adapted to the respective locations, divisions, departments and teams. This is the only way to ensure that the employees in their work environment can identify with the localized culture factors. There is a strong warning against schematic deductions of culture factors that can possibly be distilled from general best practice factors of other companies. Each identified corporate culture should have a high degree of individuality, reflecting the past, present and future. Only then will it be able to achieve its great effect in creating identity and motivation. The corporate culture model of the example company can be visualized as in Fig. 4.3.

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Innovave strength High level of employee parcipaon in the company's development Empowerment

Disnct customer proximity and -orientaon

Developments in partnership with our customers

Professional and personal employee development High level of trust within the company Lively cooperaon with our partners

Living internal collaboraon

Relaonships of trust with customers and partners

Fig. 4.3  Culture model of the example company

4.6 Key Points 1. The conception of an individual model of corporate culture promises the best and most sustainable results. 2. Standard models do allow for internal comparisons, but they lack a company-specific tailoring, and identification with such a cultural model will usually not be fully achieved. 3. To capture the relevant culture factors, it is important to take different perspectives: the company view as a whole, the internal system of value adding activities, and individual and collective value adding activities. 4. The integration of the different perspectives allows for a balanced and overall picture of the corporate culture. 5. The Culture Diamond Model creates a framework for deriving company-specific culture factors. It integrates the past, present and future into the consideration and thus creates good conditions for general acceptance. 6. The process of recording the culture factors can take place in various ways. A process involving many employees seems important; group discussions are a promising instrument for this. 7. A condensation to 5–10 culture factors enables a focus and creates the conditions to make the process of shaping and developing corporate culture manageable.

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8. The process of determining the culture factors should also take place at all levels and in all areas for which a deviating, individual corporate culture appears to be important. Harmonisation with the corporate guiding culture should of course be ensured. 9. A review and alignment of the selected culture factors with the pursued corporate goals and strategies should always be carried out. The selected culture factors should support the corporate strategy.

References Bär M, Krumm R, Wiehle H (2010) Unternehmen verstehen, gestalten, verändern. Das Graves-­ Value-­System in der Praxis. Gabler, Wiesbaden Beck DE, Cowan CC (2007) Spiral dynamics  – leadership, Werte und Wandel. J.  Kamphausen, Bielefeld Denison DR (2006) Verbindung von Organisationskultur und unternehmerischem Erfolg: Ein kurzer Überblick. In: Bertelsmannstiftung (Hrsg) Messen, werten, optimieren. Erfolg durch Unternehmenskultur. Ein Leitfaden für die Praxis. https://www.bertelsmann-­stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/GP_Messen_werten_optimieren.pdf. Accessed 17 Nov 2019 Graves CW (2002) Levels of human existence. ECLET Publishing, Santa Barbara Herget J (2018) Das Triptychon-Exzellenz-Modell – Grundlagen, Konzept und Implentierung. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Springer, Wiesbaden Hermann S, Pfläging N (2019) OpenSpace Beta: Das Handbuch für organisationale Transformation in nur 90 Tagen. Vahlen, Münschen Krafft A (2006) Die Repertory Grid-TechnikErhebung der relevanten kulturellen Faktoren zur nachhaltigen Entwicklung des Unternehmens. In: Bertelsmannstiftung (Hrsg) Messen, werten, optimieren. Erfolg durch Unternehmenskultur. Ein Leitfaden für die Praxis. https://www. bertelsmann-­stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/GP_Messen_ werten_optimieren.pdf. Accessed 17 Nov 2019 Laloux F (2015) Reinventing Organizations: Ein Leitfaden zur Gestaltung sinnstiftender Formen der Zusammenarbeit. Vahlen, München Malik F (2014) Führen Leisten Leben: Wirksames Management für eine neue Welt. Campus, Frankfurt/New York Sackmann SA (2006) Welche kulturellen Faktoren beeinflussen den Unternehmenserfolg? https:// www.dgfp.de/wissen/personalwissen-­direkt/dokument/84192/herunterladen. Accessed on 11 May 2016 Sagmeister S (2016) Business culture design. Campus, Frankfurt Schuster C (2006) Organizational Culture Inventory. Nutzung von Kultur als Treiber erfolgreichen Wandels. In: Bertelsmannstiftung (Hrsg) Messen, werten, optimieren. Erfolg durch Unternehmenskultur. Ein Leitfaden für die Praxis. https://www.bertelsmann-­stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/GP_Messen_werten_optimieren.pdf. Accessed 17 Nov 2019 Vester F (1970) Die Kunst vernetzt zu denken. dtv, München

5

Analysis and Diagnosis of the Corporate Culture

Abstract

Most managers are only intuitively aware of the prevailing corporate culture in their organization. Such an assessment may be correct, but it provides an inadequate basis for systematically identifying weaknesses and strengths on the one hand, and for providing an initial resilient basis for discussion between different members of the organisation on the other. Audit concepts are suitable for analysis and diagnosis in a company. In this chapter, the basics of audits are discussed and an audit concept for recording corporate culture is presented. This offers a good opportunity to carry out an empirically based diagnosis of the corporate culture. In addition to the current situation, it also enables the assessment of a desired corporate culture by the members of the organisation. The different proposed approaches are presented in detail. Likewise, different evaluation possibilities of the obtained results are discussed. The corporate culture audit is a tried and tested instrument that can be adapted to a wide variety of companies and company divisions. Peter Drucker, “If you can’t measure it – you can’t manage it”. Henry Mintzberg: “If you can’t measure it, you especially have to manage it.”

From the intuitive to the fact-based, the starting point of this chapter is well outlined. Only concrete assessments and measurements create a good basis for further discussions. Few topics in the field of management are as speculative in practice as the phenomenon of corporate culture. This does not have to remain so, the following chapter shows possible methodological ways to offer the discourses a resilient basis. In this way, the old masters

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_5

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of management, Peter Drucker and Henry Mintzberg, also come into their own, as the quotes at the beginning of this chapter demonstrate.

5.1 The Corporate Culture Audit: On the Term and Concept After the last chapter dealt with the question of what the relevant individual corporate culture factors are and how they can be identified, the focus must now be placed on the process of ascertaining the status and the respective characteristics. The corporate culture audit1 represents a method for analyzing the characteristics of the current corporate culture. At the same time, this method can also be used to determine the desired state of the respective characteristics. Audit is understood to be a systematic stocktaking. This requires two starting points: • The objects of analysis (what exactly is to be analysed?) should be justified and relevant to the intended purpose. A possible procedure for this was outlined in the last chapter. • At the same time, these objects should be located in a graduated system. This should enable statements to be made about the degree or quality of the evaluation of the individual cultural factors. This can be done by specifying a scale, for example an interval scale with a 5, 7 or 10-point scale with a designation of the respective end points (e.g. inadequate – excellent). Likewise, ordinal scaled assessments serve their purpose, but they are limited in their statistical evaluability. The scope for assessment, which can be made by individuals in the form of a survey, an interview or in group discussions as a consensus, is based on their own perceptions, which can be based on external comparisons or internal benchmarks, for example. An alternative assessment (ordinally scaled) can also be made directly in a plausible model. Such a model can, for example, be a maturity model. These are differentiated into various development stages (4- or 5-stages are particularly common) (see Chap. 6). What is the purpose of audits? Audits are primarily intended to ascertain the current status, which should become transparent and thus comprehensible. From the determination of the current status, measures can then be derived that are intended to influence future development in a desired direction. An audit in this sense is therefore a management tool, the application of which can provide indications of future design possibilities. In order to generate the highest possible benefit from the application of audits, the determination of the objects to be analysed is of central importance – as explained in the previous chapter. For culture change initiatives, the result of a corporate culture audit is an important basis and starting point for action. There is a broad repertoire of methods in the change management environment – and little methodology on the question of which of the methods are better or less suitable for which particular issues and challenges as well as  This chapter is based in part on Herget and Mader (2018).

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5.2 Survey and Evaluation

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contexts. The corporate culture audit can provide an initial basis for the selection of interventions and measures for cultural change by providing an overview of the specifics of the corporate culture to be changed in each case.

5.2 Survey and Evaluation The survey and evaluation can be conducted in various forms and formats: Interviews, workshops, group discussions, large group methods (e.g. Open Space), written surveys and others. The respective advantages and disadvantages must be weighed up according to the situation. On the one hand, a comprehensive survey of employees and managers can be carried out, on the other hand, appropriate analyses can also be carried out in a workshop format by a representative group of participants. In this way, differences of opinion can be discussed and mutual understanding can be promoted. A direct written survey cannot replace such a process of knowledge and understanding. A combination of methods can therefore be recommended. For example, a comprehensive basic survey can be conducted among all employees or a larger group of participants (anonymously) in order to additionally capture evaluations that may not have been expressed in the personal exchange on the one hand, and on the other hand to give as many employees as possible the opportunity to participate in this process. The evaluation of the respective culture factors alone will lead to important reflection processes among the employees. The assessment of the respective characteristics of the selected factors of corporate culture is carried out in an instrument adapted to the company (e.g. questionnaire, interview guide, assessment points on a board). As an example, audit questionnaires can serve as workshop guidelines or be used in adapted form as (online) questionnaires or interview guidelines (see Fig. 5.1). A core element of the approach chosen here, which is based on the method of success factor research (Lehner 1990, 2008), is the differentiation in the survey of the state of expression of a culture factor. This is done in two stages: • First, the question is asked: How well is factor X developed in your company (e.g. scale 1–10)? • Then the question is asked: How important is factor X for your company (e.g. scale 1–10)? From the differentiation between the assessment of the current expression of a culture factor on the one hand and the importance and significance on the other, numerous interesting interpretations can be drawn in the evaluation. Through this synchronicity, both the current and the future cultural expression perceived as important are surveyed at the same time. This distinction is the special feature of this procedure, which has proven itself in practice. Depending on the format chosen in the survey form itself, the result can be presented in different ways: in a radar chart (in the case of a simple evaluation scale with a point

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Fig. 5.1  Corporate Culture Audit Template (sample templates from a project)

system) or in a quadrant system (in the case of an evaluation according to the format of a success factor analysis with an evaluation according to importance (priority) and performance (achievement) of the respective factors). In both cases, the relevant fields of action are clearly identified. In the case of a quadrant system, the axes are distinguished with their characteristics actual state: low – high and target state: less important – important (see Fig. 5.2). A multi-method mix is suitable for the corporate culture audit, in which the audit can be carried out in the context of a workshop and/or through a supplementary written or oral survey. The procedure also allows the combination of the analysis steps to determine the actual and the target culture. The application of the method by experienced internal (and/or external) project staff simultaneously sensitizes the perception and expectations of the project participants. This already achieves an increased awareness and thus directly influences the corporate culture in the company’s everyday life.

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Fig. 5.2  Evaluation methods Quadrant system or radar chart

In addition to this relatively directly addressable approach to surveying corporate culture, other, more open methodological approaches are also possible. For example, qualitative procedures such as the elicitation of collective patterns through group discussions can be used. These are particularly suitable in very complex organisational situations and usually require external support due to their methodological requirements. However, these methods take longer to implement, but they can lead to further insights that go beyond the statements described here (see Luttenberger 2018 for more details).

5.3 Derivation and Prioritisation of Objectives Based on the result of the evaluation, it is recommended to formulate the respective goals for the identified fields of action before deriving measures in order to ensure that it is clearly defined where the direction of development should go. The procedure described here ensures that the procedural methodology, starting from the individual model of the corporate culture, the strategic alignment with the corporate strategy, via the ACTUAL analysis, the TARGET conception and the formulation of objectives up to the selection of measures, is consistently systematic. When setting goals, it will also be necessary to prioritise which aspects of the corporate culture should be addressed as a matter of priority. The evaluation provides a good basis for this.

5.4 An Example to Illustrate In the following, the example from Chap. 4 is continued in order to better demonstrate the use of this instrument. The following company-specific culture factors were selected in the previous chapter: • Distinct customer proximity and orientation

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• • • • • • • • •

5  Analysis and Diagnosis of the Corporate Culture

Developments in partnership with our customers Relationships of trust with customers and partners Lively cooperation with our partners Innovative strength Living internal collaboration High level of trust within the company High level of employee participation in the company’s development Empowerment of employees Professional and personal development of employees

In accordance with the audit, the questions, whether online questionnaire, written questionnaire, interview guide or guide in a group discussion, are formulated as follows: Example 1a) How well is customer orientation and proximity practiced in our company? 1b) How important is a high level of customer orientation and proximity for our company? 2a) How well do we develop new solutions together with our customers? 2b) How important is it for us to develop new solutions together with our customers? 3a) How trustworthy do we behave towards our customers and partners? 3b) How important is a trusting relationship with our customers and partners? 4a) How well do we cooperate with our partners in developing new solutions? 4b) How important is good cooperation with our partners in the development of new solutions? 5a) How innovative are we as a company? 5b) How important is a high level of innovation for us as a company? 6a) How well do we systematically collaborate internally on projects? 6b) How important is systematic internal collaboration? 7a) How well do we trust each other in the company, regardless of hierarchical level? 7b) How important is a high level of trust in the company, regardless of hierarchical level? 8a) How well are employees involved in the development of our company? 8b) How important is it for our company to involve employees in the development of the company? 9a) How well are personal responsibility and the transfer of competencies practiced in our company? 9b) How important is it for our company to transfer responsibility and competences to our employees? 10a) How well do we promote the professional and personal development of employees in the company? 10b) How important is the professional and personal development of our employees for our company?

5.4 An Example to Illustrate

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The individual questions can then be rated, for example, on a scale from 1 (not at all, not present) to 10 (excellent, very high) (individually or by consensus in the team). The results can then be displayed, for example, in a quadrant system and/or a radar chart (as an average value of the individual ratings). If, for example, differentiation is to be made according to departments or locations, it is advisable to query this structural characteristic. Afterwards, interesting comparisons can be made or internal best practices can be identified. It is also clear, for example, in questions 3 and 7, that it might be advisable to differentiate in two questions each (if there are differences in cooperation with customers and partners or if trust in the company is lived differently in the team than between the hierarchies). These subtleties must always be considered and answered in the current context. If one imagines a large company with many locations and numerous divisions and departments, it becomes clear that the cascade approach already mentioned will require many adaptations. The corporate culture determined in each case must make sense for the affected, definable part of the employees and not get lost in the abstract and non-binding. The fictitious result of such a survey could lead to a result as shown in Table 5.1. The result allows several directions of interpretation: • on the one hand, it shows how the current manifestation of the respective cultural factors is assessed, • on the other hand, the estimated future importance of the culture factor becomes visible. The comparison of the two values clearly shows the perceived discrepancy: the greater the delta, the greater the obvious need for action. The result thus provides a good basis for further decisions: Which priorities exist, which goals should be formulated, which strategies are suitable. These provide the basis for the methods of cultural intervention and Table 5.1  Evaluation of a corporate culture audit (rating on a scale of 10) Culture factor Distinct customer proximity and orientation Developments in partnership with our customers Relationships of trust with customers and partners Lively cooperation with our partners Innovative strength Living internal collaboration High level of trust within the company High level of employee participation in the company’s development Empowerment of employees Professional and personal development of employees

Performance (actual) 7.8 8.1

Importance (target) 8.5 9.0

Delta (difference) 0.7 0.9

5.8

7.6

1.8

6.5 4.8 4.2 7.1 6.1

7.3 8.1 9.0 8.5 7.7

0.8 3.3 4.8 1.4 1.6

7.0 6.8

9.5 7.8

2.5 1.0

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change management that are then to be selected. However, it may become clear which cultural factors still require discussion and convincing. There may well also be a negative delta, which then offers indications that the importance and corresponding activities to increase this culture factor are not seen. Under no circumstances should the importance of this assessment process for the discourse on the topic of corporate culture be underestimated. For most companies, it will be the first systematic discussion of the topic of corporate culture at all. The term, which is often perceived as vague, will be filled with concrete life from everyday practice for all participants and even evaluated in terms of its current expression and future importance. The discussion, if possible also across departments and divisions, will also offer an important contribution to the identification of the employees with the company and its identity.

5.5 Key Points 1. The corporate culture audit is a systematic process for evaluating the characteristics of the respective company-specific culture factors from the perspective of management and employees. 2. The corporate culture audit provides the starting point for strategies to be derived from it for shaping the corporate culture. 3. The survey of corporate culture can be carried out using various methods. In addition to interviews and written (online) surveys, group discussions are also suitable empirical methods. Often a multi-method mix is recommended to achieve the best results. 4. The evaluation of the culture audit can be done graphically and/or in tabular form. The evaluation provides the basis for comprehensive discourse and for further strategy development. 5. The evaluation of the culture audit provides a good basis for deriving corporate culture objectives and their alignment with corporate goals and strategies.

References Herget J, Mader I (2018) CultureExcellence: Das Unternehmenskultur-Audit  – ein Werkzeug zur systematischen Bestimmung der Unternehmenskultur. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best Practices. Springer, Wiesbaden Lehner F (1990) Die Erfolgsfaktoren-Analyse als Instrument des Informationsmanagements  – Erfahrungen bei der praktischen Anwendung. In: Herget J, Kuhlen R (Hrsg) Pragmatische Aspekte beim Entwurf und Betrieb von Informationssystemen. UVK, Konstanz Lehner F (2008) KnowMetrix. Ein neuer Ansatz zur Erfolgsmessung im Wissensmanagement und erste Praxiserfahrungen. KnowTech, Frankfurt am Main Luttenberger I (2018) Kulturbarometer: Führung, Engagement, Kommunikation. Konzeption, Datengrundlagen und Implementierung. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best Practices. Springer, Wiesbaden

6

Corporate Culture in the Maturity Model

Abstract

Maturity levels offer a suitable way of locating one’s own corporate culture on the basis of important cultural factors. On the one hand, this reflects the company’s individual situation, and on the other hand, the inherent benchmarking also enables a comparison with good and best practice. At the same time, maturity levels offer a good opportunity to systematically derive strategies for optimizing the current situation. It seems important to develop a maturity model based on the needs of one’s own company and to adapt it accordingly. At the same time, maturity levels offer a basis for discussion and reflection within a company, because the determined maturity levels always correspond to personal interpretations. Maturity levels represent a possible extension and useful addition to audit concepts.

This section presents the development of a maturity model for corporate culture. The conceptual framework of the maturity levels starts with the audit concepts, it is also about a systematic localization of the development status of a company with regard to the corporate culture. However, depending on the operationalization and description of the individual levels in the maturity model, this concept is taken much further and thus enables good options for the subsequent generation of strategies and measures. The maturity model provides the basis for a detailed assessment of the current corporate culture as it relates to various aspects that are potentially significant for success. This section answers the following questions:

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• How can companies assess their own level of corporate culture with regard to the various dimensions? • How can companies identify their own strengths and weaknesses in the corporate culture? • Which development paths and contents can be taken to optimise them? • How can goals and strategies for further development be determined from this? • Which procedure variants are available for recording the corporate culture?

6.1 Meaning and Function of Maturity Models The aim of maturity models is to outline a development path that predicts the professionalization of a company – in this case in the sense of the development of corporate culture. The underlying hypothesis implies that an advanced maturity level of the corporate culture also results in better corporate quality and thus higher competitiveness. A further development in the degree of maturity is therefore to be strived for in principle. The maturity model offers a good opportunity as a starting point for change management in the context of culture change processes. It can unfold a vision of the effect of design measures and make them anticipatory. The outlined possible development path illustrates the potential positive changes in the context of culture work. At the same time, the examination of the specific characteristics of the considered cultural factors in the different stages of maturity leads to a deeper discussion and reflection and illustrates the inherent potentials of cultural design. In this way, the maturity model simultaneously has a high motivational effect for further project work. How does the maturity model relate to the corporate culture audit described in the last chapter? On the one hand, the maturity model can be used as an alternative and more detailed procedure for determining corporate culture. The audit generally evaluates the culture factor as it is assessed on a scale on a continuum. The maturity model, on the other hand, describes all stages with their characteristic properties. Of course, this requires extensive preparatory work. A professionally competent team must work out corresponding levels in the maturity level for the selected culture factors. The evaluation of the individual culture factors can be included in such an elaboration directly on the basis of the corresponding characteristics of the individual levels in the degree of maturity in the expression of the individual culture factors. This also has the advantage that the individual culture factors can be further differentiated as desired, if this should prove useful in the context of the assessment. In the case of the audit concept, this is generally subject to narrower limits due to the semantic abbreviation. At the same time, a maturity model for the corporate culture developed by the project team, which describes the individual phases in a content-rich manner, can clarify a kind of roadmap for the possible further path to optimizing the corporate culture. However, this approach is more time-consuming and requires more effort if you want to involve large parts of the workforce.

6.2  Concept of the Maturity Model

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On the other hand, the use of the maturity model can be used as a supplement to the audit concept. The assessments within the scope of the audit can be schematically transferred to the maturity model and in this way also use the advantages of this model. The case is made here for dual use; both the culture audit and the subsequent transfer to a maturity model directly exploit the advantages of both methods. The maturity model can also be cascaded further and, for example, individually differentiated and directly assessed at departmental level. The combination possibilities should be used in a way that is appropriate to the situation; both concepts have many advantages that should be used in the context of the culture change process. It is important to emphasise that it is not a question of the most exact classification possible, but rather of a consensual evaluation in which as many employees as possible can find themselves with their experiences. Maturity models thus directly support companies in the further development of their own corporate culture. At the same time, they serve as a strategic instrument for the systematic future development of the corporate culture with the goal of securing and strengthening competition. The targeted horizon for the development of corporate culture can cover a period of several years, especially for larger companies. With optimization and further development in the maturity model, there are often fears that progress would, for example, reduce many ad hoc decisions and situational reacting and improvising through increasing systematization and structuring, and that greater formalism would take hold. These fears are usually mistaken; clearer development and specification of adequate structures and mechanisms do not promote any loss of flexibility, creativity and performance. On the contrary, a further development of the corporate culture creates more orientation and security for the individual employee in the daily management of the tasks at hand through adapted rules, supporting systems and greater transparency. The following describes and operationalizes the construct of the maturity model.

6.2 Concept of the Maturity Model Maturity models1 are characterized by different evolutionary stages. Maturity models have been known for a long time, especially in management theory, in the field of software development (e.g. SPICE: Software Process Improvement and Capability Determination) and product development/service provision (e.g. CMMI: Capability Maturity Model Integration). In the meantime, maturity models are also frequently used to depict a characteristic of certain operational functions, such as information management, knowledge management, digitization, procurement, marketing, etc. The concept is now transferred here to the area of corporate culture.

1  For more details, see Herget (2022, p. 167 ff.). These explanations serve as a basis for adaptation to the topic of corporate culture.

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The first level in maturity is thereby understood as the entry level, which stands at the beginning of a learning and development process. With increasing competence acquisition and a further development and refinement of the tools, methods and systems used, more advanced levels of growth are reached. The final stage of a maturity model can be understood as a stage of excellence. The systems are mature, the company is – according to the current state of knowledge – at the highest level of maturity. The position in the maturity model can also be seen as a benchmark for one’s own development over time or for direct comparison of different departments and locations, but also with the competition.

6.2.1 Stages in the Maturity Model The six stages used in this concept (5-stage models are also frequently used) can be described as follows: 1. Level: Non-existent There is no reflective engagement with the nature and quality of the implementation of certain measures. That is, an examination of why something is done exactly the way it is has not yet taken place. Alternatives to current practice have not been evaluated, systematic changes have not been made. This phase is often found at the beginning of a business activity and forms the starting point for initial optimisation measures. 2. Stage: Initial First preoccupation with the way of a certain behaviour and action have been made. Analyses, process descriptions, business rules are evaluated for their suitability and first steps are taken to implement them. 3. Stage: Develops specifications, guidelines, sanction systems, process descriptions for handling business transactions are available, measures are taken according to predefined patterns, own good practices are available, which provide the benchmark for action. 4. Level: Defined In addition to clearly regulated specifications and business processes, responsibilities and exceptions are fixed, benchmarks and goals have been developed, and continuous improvement in task execution and collaboration is aimed for. 5. Stage: Managed The business processes are systematically evaluated and compared with the targets, deviation analyses are carried out, optimising measures are taken and their effect is checked. Reporting on deviations and target achievement has been introduced and forms the starting point for continuous optimisation. 6. Level: Optimized A permanent orientation towards best practices within and outside the company is in place, all business processes are permanently evaluated and optimized. Figure 6.1 illustrates the concept of the maturity model and the view of the individual stages showing an increasing degree of professionalisation. In this context, later stages indicate a more highly developed state.

6.2  Concept of the Maturity Model

77

Optimized Managed

Strategic further development

Shared vision

Defines Developed

Consolidated & Integrated

Established

Initial Basics

Non-Existent Ad-hoc Level1

Stage 2

Level 3

Level 4

Level 5

Level 6

Fig. 6.1  Concept of the maturity model

Depending on the selected perspective, the positioning in the maturity model can take place at different levels of abstraction and can be aggregated into larger object areas (e.g., collaboration as an overall function) or differentiated (e.g., collaboration with external partners, other departments, in the team, or individual collaboration). It must be taken into account that the classifications may well be subjectively assessed differently. Therefore, discourse and consensus finding are of great importance. Different culture factors, each considered individually, may well be located in different organisational sub-areas at different stages of development at the same time.

6.2.2 Options for Carrying Out the Determination of the Degree of Maturity In principle, various procedures are possible for determining the maturity level. On the one hand, it can be a self-evaluation, which is carried out by internal persons or project teams, which can, however, lead to a certain bias, since under certain circumstances one’s own work is evaluated. Despite this danger, this procedure will be the rule. On the other hand, the assessment can be carried out by an external evaluation, i.e. an evaluation conducted by professionals from outside the company or the respective business unit. This is carried out by external experts who exclusively evaluate the performance of others. These may well be employees of other departments who maintain a professional distance from the evaluated organisational unit. Members of the core team of the culture change project are also suitable for this purpose. Finally, mixed forms combining the two

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characteristics are conceivable. For example, an externally moderated workshop could take place to determine the maturity level. When deciding on a particular approach, aspects of desired objectivity and the available time, human and financial resources play a role above all. In practice, it has been shown that critical self-evaluation can serve its purpose very well. Checklists or questionnaires can be used as methods and instruments. However, the evaluation can also be carried out within the framework of interviews or workshops. Combinations are also possible here and often make a lot of sense, especially when it comes to larger companies. Internal or external benchmarks can be used to operationalize and measure the characteristics of individual culture factors. An orientation towards own benchmarks can take place in a temporal, departmental or cross-location comparative manner. Frequently, it is also possible to draw on the experience gained by employees in other companies. Another variable for determining the degree of maturity concerns the necessary duration of this activity. This process can take from a few hours (quick check) to several days and weeks. This also depends on what experience with the tools is already available in the company. The first time it is carried out, the process will generally take longer; if it is used repeatedly, this may be correspondingly shorter due to experience already available and, if applicable, instruments already developed. The frequency of implementation also depends on situational factors. The cycles may well change over time. At the beginning, the first repetition may already make sense after a quarter of a year, later perhaps only every year. This depends above all on the scope and impact period of the measures and changes that are planned and implemented after a maturity assessment. What has been said can be summarized in the form of a morphological system (Table 6.1). The procedure to be chosen for determining the degree of maturity is to be decided individually and according to the situation. Some indications in this regard have already been formulated in more detail. The main determining factor will be the size and differentiation of the company. Table 6.1  Options for determining the degree of maturity (morphological systematics) Feature Form of implementation Degree of standardization Methods/ Instruments Operationalization Frequency Duration

Possible characteristics Self-evaluation Mixed form Standardized Semi-standard Checklist/ questionnaire Internal benchmarks Regular Quick-Check

External evaluation Individual

Interviews

Workshops

Mixed form Occasion-related Average project duration

External benchmarks Irregular Longer project duration

6.3  Procedure Model for Strategic Positioning

79

Example In the present case of the selected example company, the following approach is chosen: • • • • • •

Self-evaluation Individual Workshops External benchmarks Irregular Average project duration

The concrete procedure model is presented in the next section.

6.3 Procedure Model for Strategic Positioning To determine the maturity level, a process model is presented that is developed from the elements described above. The possible activities that follow from the position determination are elaborated in the next chapter. The procedure for determining an adequate approach is shown schematically in Fig. 6.2. The seven steps of the process model are described in more detail below: 1. Determine the culture factors relevant to the company Suitable criteria, and if necessary further sub-criteria, are derived from these company-­ specific culture factors (see Chap. 4). In doing so, it is important to work out a meaningful degree of differentiation. These represent the respective assessment level. The use of behavioural descriptions is helpful here. The more differentiated the individual culture

Determine the culture factors relevant for the company 1 2 3 4 5 6 7

Determine the form of implementaon Determine the instruments for carrying out the evaluaon Carry out the maturity determinaon Evaluate the results in a suitable scale Interpret the results Develop a strategy from this

Fig. 6.2  Procedure model for positioning

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factors are broken down, the easier it is to determine the resulting strategy measures more specifically. The useful degree of differentiation varies according to the situation. It may well be that in one case the selected culture factor does not even need to be subdivided into sub-criteria, in other situations it may well be analysed in several sub-criteria in order to make the culture factor to be evaluated more precise (compare the example mentioned earlier with “collaboration”). The right degree of differentiation is essential for all the following steps. If it turns out during the evaluation that a finer subdivision would be useful, this can of course still be carried out iteratively during the implementation process. 2. Determine the form of implementation Specify whether you: (a) Self-evaluation (individuals or teams), (b) External evaluation ((departmental) external experts) or (c) prefer a mixed form.

3. Define instruments for carrying out the evaluation They can use the representation of the maturity model presented here as an example (Table 6.2) as a template and prepare it specifically for all culture factors on the basis of their model of culture factors (Chap. 4). This should then be a team effort with the participation of employees whose activities are specifically affected by the specific culture factors. This is the preferred variant. “Lean variants” are also suitable: e.g. only levels 1 and 6 are marked in terms of content, the gradations with their interpretative content are then left to the evaluators. In this form, this would correspond to an interval scale. However, several fields can also be sketchily outlined in terms of content in order to provide the raters with more clues. In this case, however, it is an ordinal scale, which no longer permits averaging (in the strict statistical sense). However, such statistical considerations should not be overemphasized when determining the methodology. In this respect, there are numerous variants from which to choose. Each organisation should find out what appears to be adequate and ultimately practicable. 4. Carry out the maturity determination Create a project plan, determine who is involved, provide information about the content, process, benefits and consequences, schedule surveys, interviews or workshops.

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Table 6.2  The culture factor “Living internal collaboration” in the maturity model Non-­ existent Ad-hoc Cooperation takes place on a case-by-­ case basis, intuitively and on demand

Defines Initial Developed Consolidated Basics Established & integrated Processes are Importance of Standards of defined, regulated collaboration interfaces show collaboration is are defined, where recognized, Customer-­ cooperation has Information supplier to take place, and relationships Information is a communication with defined debt to be channels are requirements discharged, determined, are the rule, Communication Cooperation is there is a often has to be cultivated, regular demanded, Collaboration exchange Cooperation is meetings take within the not systematic place, but no team for systematic collaboration, collaboration Willingness beyond the to collaborate project team, is taken into Ability to account in the collaborate is sanctions recognised and system, encouraged as there is a competence training and instruction

Managed Shared vision Collaboration is lived, joint successes are celebrated, systematic feedback takes place, emotional and professional aspects are regularly taken into account in the evaluation, Collaboration is consciously supported across departments through events, Optimizations are taking place, training and instruction is systematized in a competence-­ oriented manner

Optimized Strategic further development Highest mutual appreciation across hierarchies, open and transparent communication, Collaboration is benchmarked across the enterprise, mutual feedback, Evaluation takes place systematically, “We-feeling”, joint events also with external parties, Exchange and job shadowing as a rule, …

5. Evaluate the results in an appropriate scale Depending on the form chosen, the presentation can be in the form of a numerical value (e.g. in 1–100%), according to a school grading system, in the scale e.g. 1–10 or also only in ordinal scales as in the proposed maturity model (Table 6.2). A polarity profile can be used as a form of presentation (see e.g. Fig. 6.4), especially if this assessment is repeated and thus a comparison over time is sought. This representation also allows a quick identification of benchmarking partners if different departments are differentiated. The communication effect of visual representations should not be underestimated.

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6. Interpret the results What does the respective assessment of the culture factors mean for your company? Why do the assessments differ in different locations, departments or teams? What are the causes? Are these ratings surprising or are they in line with expectations? Are they historically grown results or are they the consequences of implemented strategies? What follows from the interpretation, what new insights about the company with its interactions with customers and partners can be derived from it, also differently for locations, departments or teams? 7. Develop strategies and measures What maturity level do you aim for in the future for the individual culture factors? What goals, strategies and measures do you derive from the results? Which weaknesses can be reduced with which measures, which strengths can be expanded, which new opportunities arise, which dangers must be avoided? The strategy concept to be developed is based on these results and their interpretation. Possible strategies can already result directly from the description of developed levels of the maturity model. Fundamental strategy options are discussed in detail in the following chapter. In principle, the procedure described is suitable for all company sizes and can be adapted to the situational constellation with little effort. In the next section, the application of maturity models is illustrated with an example.

6.4 Example of a Maturity Model for Corporate Culture The company-specific culture factors to be considered have already been selected in Chap. 4. These will now be outlined by way of example with a few keywords to better illustrate the following application: Distinct customer proximity and orientation: The customer is the focus, his needs are known, customer wishes are systematically collected, customer care has a high priority, regular customer events are organized. Customer loyalty and the proportion of regular customers are important KPIs. Partnership-based developments with our customers: Customers are systematically included in development projects, regular joint meetings are held, (interim) evaluations with customers are anchored in the project, beta tests are systematically accompanied, feedback is obtained, cooperation is comprehensively evaluated. Relationships of trust with customers and partners: Authentic and truthful external communication has high priority, “better lose money than lose a customer” as a maxim, regular exchange of experience takes place, customers and partners are regularly evaluated internally and analysed for potential for improvement.

6.4  Example of a Maturity Model for Corporate Culture

83

Lived cooperation with our partners: Our technology suppliers are selected, an open and constructive cooperation is strived for, we offer ourselves as partners for new developments, we support the joint cooperation in innovative projects, joint learning is made possible. Innovative strength: We regularly scan new developments and systematically check them for productive use, we systematically analyze markets, competitors and business models for change potential, we use pilot applications to learn, we establish labs as a joint learning platform internally and with partners, employees are regularly trained, we publish and present at conferences and congresses, organize training courses, systematically seek employees with new know-how, we cooperate with universities. Living internal collaboration: We cultivate cooperation based on mutual appreciation, internal customer-supplier relationships, cross-departmental cooperation is fostered through joint events, exchanges and job shadowing, mutual giving and receiving of feedback is mandatory. High level of trust in the company: “Walk your talk” as a company maxim, mutual appraisals and feedback, open and early communication is lived, cross-hierarchical communication and feedback is possible at any time, information is both bring and get, regular meetings with the agenda to improve cooperation and trust take place. High level of employee participation in corporate development: timely information, ad hoc and systematic opinion gathering, joint strategy development, involvement of all relevant employees in planning processes, employee participation in corporate results. Empowerment of employees: competence and responsibility belong together, intrapreneurship as a goal, self-recruiting project teams are strived for, agile methods are practiced, employees have a high degree of decision-making leeway regarding their own development. Professional and personal development of employees: Personal development and professional training are regarded as equally important, career paths are agreed, learning and teaching are defined as common places of learning, mentoring takes place, expertise and topic leadership are institutionalised, knowledge management is cultivated, sabbaticals are to be made possible.

These culture factors considered here are then transferred to the individual levels of the maturity model. Where it appears necessary, the individual culture factors can also be further differentiated if there are different levels of maturity in individual subareas of the culture factor. The factors trust and collaboration were mentioned earlier as an example of this. The exemplary implementation of the maturity model is now to be illustrated by the culture factor “Living internal collaboration” (see Table 6.2). Two further possibilities of evaluation in the form of visualization are to serve as further illustration. On the one hand, the results can be presented in the form of a maturity model with the various levels and their respective characteristics. For this purpose, the company-specific culture factors are plotted and these are visualized with a bar (or a connecting line) in the level reached. An example can be found in Fig. 6.3.

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Inial Basics

Developed Established

Customer orientaon

Defines

Consolidated & integrated

Managed

Shared vision

Opmized

Strategic further development

Relaonshi ps of trust Cooperaon Innovaon starch Internal collaboraon Employee parcipaon Empowerment ...

Fig. 6.3  Corporate culture in the maturity model

Professional and personal development of employees

Distinct customer proximity and orientation 10 9 8 7 6 5 4 3 2 1 0

Empowerment of employees

High level of employee participation in corporate devel...

Developments in partnership with our customers Relationships of trust with customers and partners

Lively cooperation with our partners

High level of trust within the company

Innovative strength Living internal collaboration

Fig. 6.4  Corporate culture in the net diagram

Another representation is made in the form of a net diagram (polarity profile). One advantage is that the respective characteristics can be plotted over several periods of time (e.g. quarters, years) in this diagram. The clarity is not lost and it can be communicated very well how the development of the corporate culture (hopefully) improves over time. An example is given in Fig. 6.4.

Reference

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Visualizations are a helpful tool in the process of cultural change. They are the basis for discussions and reflections and at the same time serve as a steering and controlling instrument. Above all, however, they provide the basis for the strategy work that now follows, which is explained in the following chapter.

6.5 Key Points 1. Maturity models represent a proven concept for assessing and evaluating the state of development of the relevant cultural factors in a company. 2. They are flexible in application and highly adaptable to the situation. Both the degree of abstraction and aggregation can be determined as desired depending on the purpose. 3. Maturity levels show the possible development path in the optimization of the corporate culture. 4. Six levels in the maturity model are proposed, from “non-existent” to “optimised”. The characterization of the individual levels in terms of content is at the same time a suitable sensitization tool for the importance and potentials of cultural change. 5. There are several design options for determining the degree of maturity, which can be selected according to the situation. 6. The result of the determination of the maturity level provides the basis for the strategy derivation. Both generic and specific strategies can be derived in a well-founded manner. 7. Maturity models are a suitable communication tool to demonstrate the status, strengths and weaknesses and possible development strategies in a comprehensible way.

Reference Herget J (2022) Das Beratersystem  – Potenziale und Resultate. In: Bodenstein R, Ennsfellner I, Herget J (Hrsg.) Exzellenz in der Unternehmensberatung. Beratungsprojekte erfolgreich durchführen – Leitlinien für Unternehmen und Berater, Springer, Wiesbaden

7

Development of Corporate Culture: Strategy Generation

Abstract

Systematic strategy development is important – despite the fact that the aspired corporate culture cannot be absolutely planned. A clear idea of where the journey is to go is central to the targeted consistent planning of a development path. Now that a good starting point for the status of the current corporate culture has been determined and the direction of an aimed further development has been outlined, priorities can be set. Which aspects of the corporate culture should be shaped, which are important, which are urgent? The strategy serves to present the entire project of shaping and developing corporate culture in its overall context, to work out priorities and to estimate the necessary resource requirements. Strategies are the basis for selecting and determining targeted activities, interventions, measures or methods for the aspired cultural change.

After the phases of analyses, diagnoses and interpretations, the focus now shifts to the generation of strategies for the further development of the corporate culture. This can be based on good foundations and models: • the culture diamond model (Chap. 4) is a suitable tool for identifying relevant culture factors, • the company-specific culture model (Chap. 4) comprises the selected and prioritised culture factors, • the audit concept (Chap. 5) maps the current performance and degree of fulfilment of the assessed culture factors and, this is one of the key points, by assessing the future importance of these culture factors, a need for action is also identified from the point of view of managers and employees, © The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_7

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• the maturity model (Chap. 6) enables the formulation of strategies necessary in the future to reach the next level of maturity after the current development stage has been located. This chapter illustrates the systematic approach that can be achieved by using these instruments. As with all future planning processes, however, the creativity of the employees involved is also of great importance, and must in any case be taken into account in the context of strategy formation processes.

7.1 Systematics for the Development of Strategies How can the previous results from the conceptions, analyses, diagnoses and interpretations be used for future culture development? We will now concentrate on the last two concepts, as these are based on selected and evaluated culture factors that have been identified as essential for the company. If the selected culture factors are to be supplemented or changed, Chap. 4 can be used for this purpose with the methodology presented there. Corporate culture is alive and new challenges will lead to new culture factors increasing in relevance and should then be systematically managed. Other culture factors may become less relevant or they may already be so well developed that they give higher priority to other culture factors that now require greater attention. This perpetual task will always have to be carried out iteratively by the responsible managers with their employees for their area. A certain constancy is advisable so that a merry-go-round of the relevant culture factors does not occur. The results of the previous analyses from the audit concept and the maturity model form a suitable basis for future corporate development. The results must first be used to formulate goals by distilling the cultural factors to be optimized and formulating them with a target. The formulation of objectives can be based on the widely proven SMART concept. The goals should be specific, measurable, achievable, realistic, and timed. The strategy formation process then takes place; strategies form and shape the path to goal achievement. An Example In the next 3 months, interfaces will be defined in advance for all customer projects in which the customer is directly involved in the development process. For strategy development, the development of generic and specific strategies can be derived from the two models presented.

7.1  Systematics for the Development of Strategies

89

7.1.1 Generic Strategies The generic strategies are based on the thinking pattern from the well-known SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), because the framework for action must be derived and determined from the identified profile. Generic strategies evolve along the pattern: • • • •

Reduce weaknesses build on strengths prevent threats seize opportunities

For this purpose, the differences in the assessment of importance and performance can be used directly from the audit concept: If a cultural factor is perceived as more important compared to the current level of performance, appropriate strategies can be formulated here. What needs to be done in order to fill this new aspired significance with life? Which strategies and strategic measures are suitable for this? Generic strategies primarily follow an incremental pattern of action, a current state is perceived as unsatisfactory or in need of optimisation and considerations are made as to which measures could successfully bring this about. Often it is already enough to eliminate all the shortcomings that hinder the employees in accomplishing their work. The identification of so-called “pain points” is a first important step in this process. Simply asking, “what is preventing you from being able to do ‘your job’ to the best of your ability?” will lead to numerous suggestions. Even brainstorming how a condition that needs improvement could be optimized will generate several suggestions. “Your work” is a placeholder for the culture factor in question, e.g., more innovative, more collaborative, more customer-friendly. So often it is a re-design of established processes. In many cases, this procedure corresponds to the concept from quality management known as Kaizen (or CIP: continuous improvement process). So it is often not the big measures that develop a corporate culture for the better, it is often the many small measures, already known to the employees, that very quickly show good results, both in productivity and in satisfaction and consequently also in the corporate climate. An Example In Table 5.1 of Chap. 5, the difference in the factor “innovative strength” is shown with a value of 3.3. The importance of innovation strength is thus assessed by the employees to be much higher than the current performance is perceived to be. It becomes clear that there is a weakness here and that the strengthening of innovation should be given a significant strategic orientation. Consequently, the expansion of the innovation strength is assigned a high priority, thus a strategy can be formulated generically. Similarly, the other assessed cultural factors can be approached and strategic options can be conceived from them.

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What the strategies should now comprise can only be answered on a situation-specific basis; here, the project team and the management are primarily called upon; of course, the participation of the affected employees should also be sought; after all, they know best where the deficits lie and what should be fulfilled so that this factor can be assessed with a good value in the future. A Second Example The culture factor “Living internal collaboration” also indicates a need for action (Table 5.1). The above applies accordingly here, but now it becomes apparent how helpful the conception of maturity models can be for the generation of strategies: if the characteristics of this factor are located, for example, in phase 3 (Developed) (Table 6.2), the analysis and description of the characteristics for phase 4 (Defined) in the comparison makes it possible to determine which strategies appear necessary in order to reach this next level. For example, the following strategies immediately suggest themselves: • • • •

Definition of standards for collaboration Introduction of a customer-supplier relationship with defined requirements Introduction of a regular exchange on the topic of collaboration in the team Willingness to collaborate becomes an evaluation criterion in the appraisal system.

If the maturity model is described in a content-rich and behavior-specific manner in the individual phases, it is then simultaneously considered a kind of strategy generator. It is important to note that the descriptions of the maturity levels become a “living” document that should be iteratively developed further. New experiences, insights, benchmarking considerations and so on will always broaden the focus and the document will become more and more suitable as a blueprint and serve this purpose. The possible futures become more and more tangible and vivid. The maturity model thus directly offers the possibility to derive currently necessary strategies from the analysis of the next phase. As a rule, the next phase should always be strived for; skipping a phase and striving for excellence right away can overtax the organization. But of course, the leap over two phases is also conceivable if this is particularly important for the company and is set up accordingly. The target level to be aimed for is therefore derived in principle from the assessment of the maturity level: What maturity level have the individual culture factors considered reached, are there differences in the – if used – sub-criteria (e.g. collaboration at different levels, in different teams or departments)? In which areas is a stabilization aimed at, in which areas an optimization? The strategy drafts and measures generated from them must be brought into line with the available resources in the planning process. Even if it seems appealing to shorten or skip some stages: this can only be done with special effort. As a rule, all stages should be run through continuously, because they allow important experience to be gained on the way to further optimization. In some circumstances, the leaps

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aimed at can overtax the organisation, especially if several cultural factors are to be optimised at the same time.

7.1.2 Specific Strategies Specific strategies do not have their origin in the direct derivation from an identified deficit or a particular competitive advantage to be developed. Rather, they can • arise out of a creative process • result from benchmarking • are derived from the introduction of a new method (e.g. Scrum, Design Thinking, Lean Management methods, …) (see Chap. 8) • operational innovations, such as home office or elements of “New Work” originate from • Potential is offered by the introduction of new systems and structures (mergers & acquisitions, new bonus system, changed management methods, digitalization, etc.). The specific strategies will usually have an impact on various cultural factors, so they cannot be anticipated exactly in terms of their effect and do not spring directly from a systematically planned process of cultural change, as is the case with generic strategies. The level of innovation for the company is usually greater with specific strategies than with generic strategies. The risk associated with their introduction in terms of achieving desired goals is also generally higher and associated with greater uncertainty. An Example In Table 5.1 (Chap. 5), the culture factor “Developments in partnership with our customers” is named as one of the most important factors of all. The team decides to develop this factor more systematically in the future and to adapt the “co-creation” method for this purpose. Within this approach, the “Lego Serious Play” method is also to be used in the future. In order to realize this, training is necessary, secondly, appropriate people must be selected and qualified as project managers, and thirdly, these methods must prove themselves in pilots in order to find acceptance on the part of employees, but also customers. The specific strategies radiate more extensively on the organization, their side effects are greater and the success more uncertain. However, when used successfully, the leap in development for the company is likely to be greater than with incremental strategies.

7.2 Strategy Options for Cultural Change Overall, the planning process of cultural change is about a balance of the individual strategy options, a combination of measures in order to sustainably optimize one’s own corporate culture with the available resources. Consequently, it is necessary to design patterns

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that are adapted to one’s own situation and to harmonize the strengths, weaknesses, opportunities and threats with one’s own positioning and vision, taking into account the availability of resources, and to design them with a view to the future. Generic strategies generally enable incremental improvement that can be planned well, while specific strategies can have a higher innovation content and have a more comprehensive effect. The connection between the results of the culture audit, the determination of the degree of maturity and the derivation of strategies, respectively of measures (depending above all on the level of abstraction of the intervention), is illustrated in Fig. 7.1. The development of strategic options and the derivation of measures for the further development of the corporate culture with the aim of strengthening the competitive position represent a core process of the cultural work. This process ensures a constant contribution to the continuous optimization of the corporate culture. With these tools, corporate culture is actively managed, and the more or less random development of corporate culture is a thing of the past. A selection of the strategies to be pursued presupposes determining the priorities and estimating the resource requirements. Only then, when resources are scarce, can it be determined which goals and, consequently, which strategies should be pursued. This prioritization and chronological order of the strategies can already be located here in an initial roadmap. Which strategies are to be implemented when and where (which operational sub-areas) and with what expected effort. Likewise, it can already be determined when suitable times for the evaluation of the respective strategy implementation seem advisable. A sketchy roadmap can be found in Fig. 7.2.

Cultural factor

Strategies/measures

Maturity

Internal collaboraon

• • •

Define standards provide training Systema c feedback

Customer orientaon

• •

Customer events Big Data Strategy

Relaonships of trust Cooperaon Innovave strength Employee parcipaon Empowerment ... ...

Fig. 7.1  Exemplary strategy scenario

7.4  Key Points

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Corporate culture Strategy roadmap January

Define standards

February

April

March

Adapt processes

Qualificaon strategy

May

Evaluaon and adaptaon

Introducon

Training

Training

Feedback training

Feedback training

Concept customer events

June

Feedback training

Customer Event

Fig. 7.2  Strategy roadmap

7.3 Controlling the Strategy Premises Strategy development, determination and execution are oriented towards internal competencies, capacities and resources. Cultural work does not simply happen “on the side”. The formulated goals and strategies become the basis for further project planning within the framework of project management (Chap. 9). However, sporadic controlling of the premises on which the respective strategies are based remains important. The strategy concept with the objectives pursued should always be kept in view and checked to see whether the assumptions made are still valid and whether the planned path corresponds to the current necessities. In a volatile, agile and dynamic world, even those areas that generally change rather slowly, as is often the case with corporate culture, should nevertheless be subject to control and monitoring. Even small changes in the business model can have an immense impact on the current or just then required corporate culture. The strategy scenario shown provides this necessary overview.

7.4 Key Points 1. The strategy development is based to an important part on the concepts and models developed so far. 2. The strategies to be developed should be formulated in advance as goals, which specify the content, the desired extent and the time period for realisation.

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3. Generic strategies for culture development follow from the results of the audit and the maturity model. They primarily represent incremental improvements. 4. Specific strategies are often overarching strategies that can have an impact on several culture factors. They are often implemented through the introduction of new methods. 5. The identification of the strategy options is complemented by a prioritisation and an estimation of the resource requirements. 6. A strategy roadmap is a suitable controlling and evaluation instrument.

8

Methods for Cultural Development: Levels and Measures of Intervention

Abstract

Corporate culture can be changed in a targeted manner through interventions and the implementation of new methods – this is the credo and starting point of this chapter. First of all, it is important to determine the levels on which the interactions are to have an effect as clearly as possible. This brings the architecture model from Chap. 3 back into focus: methods for changing mindset and behavior are considered. However, the path to implementation in daily practice also requires an adapted approach. Finally, the concept of culture hacks will now be elaborated. They are the necessary link between strategies and daily actions. Special attention will be paid in this chapter to methods and tools that can quickly lead to the aspired goal. Changing a corporate culture takes time; literature and practice often speak of up to a decade. However, companies have less and less time to carry out the necessary adaptation processes. Changes in culture often have to be implemented immediately or within the shortest possible time in order for companies to be managed successfully or projects to be implemented profitably. This chapter therefore primarily illustrates methods that enable rapid, agile adaptation or change. These methods are located at different levels of the corporate culture: in daily rituals, the practiced behaviors, structures, processes, but also in norms, value systems and in attitudes. An overview of selected possible methods, their evaluation for use and an ideal-typical implementation process complete the explanations.

There is still a widespread narrative in both theory and practice that corporate cultures can hardly be changed, and if they can be changed at all, then only in the very long term. Corporate cultures are, after all, the product of existing, historically grown realities of life in organizations and reflect the values, norms, behaviors, artifacts, practices as well as © The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_8

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formal and informal structures, processes and communication styles. However, this is countered here by the circular argument: what has emerged and developed can also be changed. Thus, the main question is on which levels and with which methods and instruments a cultural change – in whatever form – can be brought about and the time component: how long does a company need to create a new or changed cultural space? Feasibility and feasibility in terms of time should be the focus of the exemplary characterization of individual selected methods. The reservoir of possible intervention instruments is far too large to attempt even a rudimentarily complete overview here. The overview presented here is rather intended as an invitation to view corporate culture as something fluid and to think about explorative approaches to shaping it. Some of the proposed instruments may seem surprisingly simple, some may not be experienced as feasible in their own context – but they will all illustrate the creative potential that lies within them. The implementation of methods for culture change complements the procedure elaborated in the last chapter, where mainly generic strategies were presented that have an incremental effect in particular. The application of the methods now to be referred to enables culture shaping through their inherent potentials. Their use is predominantly in the sense of specific strategies.

8.1 Use of Interventions and Methods in the Architecture Model 8.1.1 Mindset and Behaviour: The Strategic Level of the Architecture Model In our current economic structures, which are characterized by globalization, further increasing division of labor, digitalization and automation, companies are increasingly required to be highly flexible in order to be able to react quickly and adequately to market requirements. Agility is a widely used buzzword in this context. It implies a fast adaptability and changeability in order to be able to meet new requirements. Corporate culture is thus facing new challenges. Approaches are needed to develop or change corporate cultures, e.g. also partial sub-cultures in organizations, teams or projects. This strategic level with the development of the desired company-specific culture factors was dealt with intensively in Chaps. 4 and 5. The culture factors identified there form the basis for further work on the corporate culture. They provide the vision and strategy that need to be realized. Their translation into everyday work is achieved through the measures and methods that can be derived from them. In order to classify the possible strategies, it is advisable to refer again to the model of the levels of corporate culture already mentioned in Sect. 1.1.1. The view of the corporate culture with its individual levels sharpens the focus and outlines the requirements for the possible methods and interventions that are to bring about a change. Changing basic assumptions, values and norms, i.e. the individual view of the world and organization, the mindset, will have to be addressed differently than influencing behavior and designing

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artifacts. Following a presentation of the individual methods, the methods outlined will be assigned later (Fig. 8.2) approximately to the individual cultural levels and thus to their intended direction of development.

8.1.2 Moving from Strategy to Action: The Operational Level of the Architecture Model The concretization of this level, i.e. the implementation of the strategy in operational activities, takes place through the activities and methods formulated in the context of strategy development. These provide the basis for the work that follows.

8.1.2.1 Putting Corporate Culture into Practice: Culture Lives in Everyday Life! The essential question in shaping corporate culture is how to translate the formulated strategy into daily life and behavior. This question is the second level of the architecture model presented in Chap. 3. In other words, it is about the concrete processes and structures that are adapted according to the vision. A possible approach is outlined below. 8.1.2.2 The Procedure Model for Sustainable Implementation The following process model is based on the approach proposed by Gartner (2018b). The systematic approach can be worked on well in teams and it thus leads to a common result. It is particularly important to let the employees develop the next steps. The supervisor should at most initiate the process as a coach, but not be involved in the implementation itself. The result is a proposal from the employees who are directly affected by these processes themselves. The employees can directly contribute their knowledge about the process, existing obstacles and possible solutions. 8.1.2.3 Working Out the “Why” The procedure can be divided into three phases. In the first phase, the “why” – why is it necessary to live a certain cultural characteristic – is answered. So, why (alternatively, the questions “for what” or “to what end” can also be used) agility, collaboration, customer orientation, innovative spirit and so on. The answer to this should be very convincing and as concrete as possible in order to unleash the necessary motivational potential. Examples We need to live agility so that we (me, we as a team, we as a company) can deliver customized solutions to the customer quickly and effectively (the more customized and concrete, the better!). We have to work collaboratively so that we (I, we as a team, we as a company) can integrate comprehensive know-how and creatively bring synergies of different

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competences into a common problem solution in order to increase customer benefit (the more individual and concrete, the better!). We must live customer orientation so that we (I, we as a team, we as a company) anticipate the needs of the market and create a high level of customer satisfaction and loyalty (the more individual and concrete, the better!). We must develop a high capacity for innovation so that we can offer our customers the most up-to-date problem solutions to meet their needs using the latest technologies to secure our competitive edge (the more individual and concrete, the better!).

8.1.2.4 Working Out the “Where To” In the second phase it is worked out which behaviours (processes, routines, structures, ways of working) are necessary so that this cultural characteristic can be lived. Example To become agile, we should live the following behavior: • • • • • •

rapid decision-making routes downward shift of authority Integrate customers in good time Introduce new agile working methods (e.g. Scrum, Kanban) Strengthen collaboration …

8.1.2.5 Working Out the “Where From” In the third phase we work out the where from compared to where to. Behaviour is already in place, and this should be compared with the desired behaviour: from this compilation and the comparison made possible, it becomes clear where behaviour and processes should change. At the same time, it becomes apparent what has proven itself and what does not stand in the way of a possible cultural change, but on the contrary, what can be built upon. This is also important from a systemic point of view, not everything has to be done anew, the old and proven retains its place and receives its appreciation and recognition. Example So far, the following behaviors are being lived: • • • • • •

Lengthy and multi-stage decision-making processes Centralised competences Customers are only involved during product testing Project management methods are used in a phase-oriented manner Cooperation takes place at defined interfaces, not on an ongoing basis …

8.1 Use of Interventions and Methods in the Architecture Model

Phase 3

Where from (of) Lengthy and mul-stage decision-making processes

Phase 2

Where (to)

99

Phase 1

Why

Fast decision paths

We have to live agility so that

downward shi of authority

we can offer the customer

Centralised competences

Integrate customers in good me

tailor-made

Customers are only involved during product tesng Project management rigid

Introduce new ways of working

Soluons fast and effecve

Strengthen collaboraon

be able to provide

Cooperaon intermient non-connuous

Fig. 8.1  Translating corporate culture into action

This analysis now reveals the need for transformation: what has to change so that the new corporate culture can be lived. How to translate this concept into daily practice is shown in the next but one section (8.1.2.7).

8.1.2.6 Schematic Representation The individual phases can be well illustrated in the following diagram (Fig. 8.1): 1 . Phase: Why is a change necessary? 2. Phase: What new or changed behaviors enable this desired change? 3. Phase: What are the current behaviors that are practiced? By comparing the results of phases 2 and 3, the need for transformation becomes apparent. It is recommended to let the employees carry out this process themselves. The developed result then has a much greater chance of acceptance and, as a consequence, of implementation. This translation work should take place in cascades in each organizational subarea. Coordination “upwards” and “downwards” in the case of overarching processes should of course be guaranteed.

8.1.2.7 Implementation in Daily Practice From the catalogue of required future behaviours (= where to), the employees concerned should now pick out a few (two to three) and apply them consistently in the current projects or processes. For example, an employee could select the new behavior “Strengthen collaboration”. The employee will now consider in ongoing projects where this new

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behavior can be implemented. At the same time, he is asked to suggest how the success of this new behavior (= strengthening collaboration) can be measured. In other words, a new KPI (Key Performance Indicator) is determined and measured in order to be able to track the progress in the change of behaviour in a comprehensible way. The supervisor should have a discussion with the employee every two weeks for the next 4 to 6 months in which the progress, the experiences made, the need for adjustment, the necessary support and so on are discussed. This exemplary learning process using a few new behaviours as examples is introduced across the whole team at the same time and the experiences gained are also reflected on collectively. In this way, the corporate culture can be transferred from the strategy to the daily task level. It is essential that this happens in a cascade within the company. Each manager is challenged to initiate the necessary culture change in their own area. Managers should also exchange ideas in order to identify best practices and learn from them. In this way, the process of culture change can be structured and systematically implemented in the operational processes. No one is overburdened, it rather takes place in an experimental, open learning space, the exchange of experiences is of high importance, the whole company is on a cultural journey together. The (hopefully) good experiences are reported and will inspire other colleagues to imitate them. The new behaviours should prove to be superior to the previous ones in order to achieve the goals – then it is much easier for the new practices to spread. Any mistakes that are generally unavoidable in the process are beneficial in an open, constructive climate for the acquisition of knowledge by all and do not lead to recriminations. Such successfully implemented new processes can then be transferred into valid standards to which all employees should orient themselves.

8.1.3 Culture Hacks: The Punctual Level of the Architecture Model 8.1.3.1 What Are Culture Hacks? For some years now, there has been a lot of talk about hacks in connection with various concepts, e.g. computer hacks, life hacks, body hacks and many other areas of application. This mainly refers to efforts to find a (also unusual) solution to a problem, to achieve an increase in performance in a creative way or to arrive at novel solutions through experimentation. It is therefore a kind of “tips and tricks”. The term is now also increasingly used for the area of corporate culture. In the following, this is understood to mean an intervention that raises awareness with the aim of contrasting the actions (or speech) currently shown with the behaviour agreed or desired within the framework of a strategy or a corporate culture. Culture hacks consequently aim to reflect on an issue or initiate a process of reflection, thus questioning whether the behaviour displayed is congruent with the desired one. They are used whenever a discrepancy becomes apparent. The use of culture hacks always appears unplanned and spontaneously applied. The employees are surprisingly

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“caught” by a culture hack, they can recognize the old thinking and behavior patterns as if in a mirror. A culture hack is characterized by the following four features (Gartner 2018a, p. 15; Herget 2021): • It is emotional, the people involved leave their comfort zone, which makes it seem uncomfortable. • It is used immediately after an event, without any time delay. • For those involved, the underlying problem becomes visible and tangible, the cause is always concrete. • The use requires a great deal of courage from the person using it, although this can be achieved with little effort. The prerequisite for the effective use of culture hacks is a clear knowledge and understanding of the aspired values, goals or strategies. Their use aims as a kind of “reminder” to reflect on the behaviour shown with regard to congruence with the expected and known values, goals and strategies. This prevents inadequate routine development. In the beginning, mainly managers and supervisors will use this method, but in the further course it is desirable that culture hacks are also used by colleagues in meetings or in cooperation when they encounter inadequate behaviour. However, this requires a mature and developed corporate culture so that this behavior is not perceived as uncollegial or straining collaboration. An example of a culture hack by employees even towards a board member was given as an example in Sect. 3.2.3. Initially, only a few employees will have the courage to do this to their superiors, but the example shows how the corporate culture can be sensitised and changed in the long term through such successful uses. If all parties involved are primarily committed to the good of the company and want to make their personal contribution to performance ever better, culture hacks are an excellent corrective. Productive and effective use therefore requires: • Knowing how to construct culture hacks. • The feeling and clarity for situations when culture hacks can contribute to the further development of the company culture. • Positive sanctioning, i.e. rewarding the courage of employees who use culture hacks. • The good knowledge of the values, goals and strategies in the company among the employees. • Reflecting together on the outcome of this intervention, a kind of lessons learned for future behaviour. To clarify, the following section provides some examples of how culture hacks could be used in practice.

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8.1.3.2 An Urgent Warning Beforehand! However, culture hacks can also unintentionally have a counterproductive effect. The use of culture hacks in daily practice requires the following three premises: • There is a constructive, positive corporate culture in the relevant area of the company; distrust, mobbing, strong competitive behaviour etc. should not prevail in any case. • The maturity of the organization in communication and feedback should allow for a direct approach. • The culture should be based on mutual respect and appreciation. If these prerequisites are lacking, they should not (yet) be used. Culture hacks would too often be misunderstood, cause too much irritation and thus reinforce a rather counterproductive or even destructive atmosphere. However, in these cases, work should urgently be done on the corporate culture.

8.1.3.3 Culture Hacks in Daily Use: Some Examples To illustrate the use of culture hacks, a few examples from different work contexts will serve to postulate a reference to the fictitious corporate culture in any given company: One Goal of the Corporate Culture, For Example, Is a High Level of Innovativeness In a meeting, a project that has gone wrong is strongly criticized, and the discussion increasingly develops into a search for the culprits. The manager interrupts this discussion with the words: Ladies and gentlemen, one goal of our corporate culture is to want to become more innovative. Innovations can and are, of course, prone to error; anyone who tries something new can also fail. Let’s now discuss much more the aspects of what mistakes or misconceptions were made in the project and how we can avoid them in the future. To do this, it is important to know as precisely as possible the reasons behind the decisions. I would like to thank you for the open discussion and explanation of the approach, because this is the only way we can continue to learn together and all learn as much as possible from the mistakes. We want to become more innovative, and that includes the possibility of failing or making mistakes.

Another possibility here would be, for example, to invite the responsible person (or the team) to talk about the failed project at a meeting and to discuss the resulting lessons learned for the future. This documents that openly dealing with mistakes is viewed positively and appreciated, as it offers an excellent opportunity to learn from experience together. A second example also comes out of a meeting situation.

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One Goal of the Corporate Culture Is a High Level of Customer Orientation In a meeting, the “impossible or excessive” expectations of a customer in a specific order are discussed. The discussion becomes increasingly negative about the customer. The manager interrupts the discussion with the words: Dear colleagues, let us better understand what the customer actually wants and why we cannot quite understand his requirements at the moment. Are these requirements really nonsensical? Customer orientation is very important in our corporate culture. So we should want to understand the customer first, maybe the problem is our communication to the customer.

A third example (Sanchez Reina 2019) may seem somewhat exaggerated, but it is primarily intended to demonstrate the breadth of the possible range of applications. In any case, this constructed example also illustrates the required courage of the manager when the outcome of the intervention is completely open. This example also shows that culture hacks are also effective when there is no discrepancy between current and expected behaviour. One of the Goals of the Corporate Culture Is a Clear Focus on the Implementation of the Current Strategy As a manager you go to the coffee corner, get a coffee and on your way back you pass a meeting room. You see several of your employees there discussing. You open the door to the meeting room and ask: Can you please tell me what the importance of your meeting topic is to our strategy achievement?

And you look directly at all employees. If at the first moment you get embarrassed looks, directed downward, and no answers come, then silently hold the pause until almost into the uncomfortable. Then you remark: I see that what you are discussing here now obviously has no strategic relevance to our goals and is therefore not important. I hereby dissolve this meeting. Let’s please concentrate together on what is most important to all of us now.

If, on the other hand, there is a response that indicates that the meeting has a strategy orientation, then ask briefly for your understanding, give brief factual feedback immediately afterwards, and make a brief positive appreciative comment thanking them for this self-­ directed joint initiative and commitment and wishing them well in their progress. These examples illustrate the use and benefits of culture hacks. They all touch emotionally, a goosebump feeling arises in the people involved, one feels “caught”. The occasion is spontaneous, immediate and follows a concrete reference that is clear to everyone involved. Everyone knows immediately what the underlying issue is, it is directly experienced emotionally. And the use of culture hacks requires courage from managers to

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provoke situations that are initially perceived as unpleasant and to endure them, but which can make an excellent contribution to the realisation and development of the aspired corporate culture.

8.1.3.4 Culture Hacks: The Link Between Mindset and Behavior As explained earlier in the architecture model for corporate culture, it is the small impulses that create a connection between the behavior and the mindset. They are indispensable nudges (“stings”) to keep the aspired corporate culture in the consciousness and to check the concrete behaviour against it again and again. Their importance for the development of a sustainable corporate culture cannot be overemphasized. In this way, the culture hacks create the link between the communicated corporate culture and the lived corporate practice in everyday life. They are necessary interventions that may interrupt inadequately developing routines at the outset and address the desired behavior. They directly serve reflection in a concrete task context, the learning effect is immense. A full development of the effect of culture hacks requires clarity about the desired corporate culture (first level of the model) and an operational implementation in the daily processes (second level). Applied in isolation, culture hacks can also have an effect; they may then appear arbitrary, especially if the connection to the aspired corporate culture is not clear. Culture hacks are a relatively new instrument for developing corporate culture. In any case, their use in practice is likely to act as a catalyst in shaping the desired corporate culture.

8.2 Classic Approaches to Changing Corporate Culture A brief look at the classic, comprehensive approaches to changing corporate culture illustrates the complexity of culture change.1 This highlights the differences with the individual methods discussed later, some of which are agile. One of the well-known approaches to comprehensive change in corporate culture comes from Cameron and Quinn (2006). This approach also underlies the concept of Bremer (2012). It is based on the widely used Organizational Culture Assessment Instrument (OCAI) (Cameron and Quinn 2006; Bremer 2012). The process of changing corporate culture is carried out in six steps (Cameron and Quinn 2006, p. 90 ff.), to which an important seventh is added here: • • • • 1

Create consensus on the current corporate culture Achieve consensus on the desired future corporate culture Determine what the change means – and what it does not mean Identify illustrative stories

 The following is based primarily on Herget (2018).

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• Develop a strategic action plan • Develop an implementation plan • Achieve quick wins and communicate them widely This process of cultural change also corresponds as an orientation framework to the comprehensive concept of cultural design described in this book. The future corporate culture is thereby targeted with a time horizon of 5 years. Kotter (2011, p. 11), who has dedicated himself to the analysis and design of change processes in organizations like no other, developed an 8-step approach for which he estimates a total of about three to ten years for comprehensive topics until they are anchored in the corporate culture. Other approaches to the holistic transformation of organisations come, for example, from Bär et al. (2010); Drennan (1992); Edmonds (2014); Gibbons (2015) and Sagmeister (2016). However, these also involve comprehensive and lengthy change steps to realign the entire organization. So there are definitely proven approaches and methods that can be used to tackle a fundamental and holistic change to shape the corporate culture. However, most of these approaches do not meet the current demand for agile and rapid change and adaptation of the corporate culture. Possible concepts for this are discussed in the following chapter.

8.3 Recent Approaches to Changing Corporate Culture In contrast to this, however, the following section will focus on methods and instruments that can be used not only as part of an overall concept, but also as isolated measures. The implementation of these methods can in any case lead to a rapid cultural change. No exact time horizon can be given, but methods are considered that promise rapid change or adaptation. This can also be associated with the first steps towards comprehensive cultural change. These methods are often initially applied in organisational sub-areas (e.g. teams, project groups, etc.), which means that a (partial) cultural change can already be aimed for ad hoc, in days or weeks. In any case, the time horizon is within the year – consequently, an exciting examination of the question of how attitudes and behaviors that have developed over many years can be directly addressed and changed. The lasting effect of these mostly relatively new instruments is promising, but as always, it depends on the quality of their preparation and introduction. In any case, the experiences made and reported so far give cause for optimism. This should stimulate the joy of experimentation – new things may and should definitely be tried out. Finally, the risk of failure also offers valuable input for further organisational learning processes – successful change processes can rarely be predicted precisely, as they constantly integrate emerging necessities.

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8.3.1 Interventions and Methods: A Characterisation The following explanations are based on the model of the levels of corporate culture (Fig. 1.1). Which methods and instruments are applied at which level and can therefore change the patterns of corporate culture that characterise that level? It is also important to bear in mind that there is a continuum between individual activities, interventions, measures and methods. In contrast to activities, interventions and measures that primarily serve continuous improvement, methods such as those presented here are characterized by a higher degree of complexity, the implementation of which requires more extensive preparatory work in the company. All these different approaches to optimising corporate culture are summarised in the concept of Culture Excellence under the term “toolbox”. As mentioned earlier, from the multitude of organizational development measures, a few so-called “agile” methods in particular will be presented and, in addition, those that have emerged as particularly relevant from the context of the previous statements in this book. First, therefore, the term agility should be briefly clarified. In the following, we understand agility to be an ambiguous concept with the elements: • • • • •

Speed Flexibility Adaptability Productivity and Perceptiveness.

In this view, agile methods follow a double character and claim: they themselves should fulfill the criteria of agility in order to be classified as such. At the same time, their use should also make the organization more agile. Some of the agile methods originate from software development or industrial production (e.g. Scrum, Kanban, Lean), but are increasingly spreading beyond this area into the entire organization for different fields of application. Agile methods in the narrower sense are those approaches, methods, and tools that ensure that they can (also) be limited to organizational subareas, can be implemented relatively quickly, and enable an organizational learning process through regular feedback loops. As a selection from the multitude of agile approaches, methods and instruments, the following ones seem worth a closer look: • • • • • • •

New Work concepts System adaptation Transformation Management Relational approach Scrum Kanban Lean

8.3 Recent Approaches to Changing Corporate Culture

• • • • • • •

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Design thinking Strategic trust Solution Focus Theory U Organizational Constellation Feedback forms Nudging

Of course, this list does not include many other relevant methods (such as co-creation, LEGO® Serious Play® or the other methods presented by Doug Rose (2019)). The methods listed here are intended to illustrate the inherent potential of these methods. A more in-depth study of the methods will be unavoidable if they are to be used. The selected methods are briefly outlined below. New Work Concepts  This refers to a variety of possible spatial and interactive forms of collaboration (combination of people, space and technology). From the coffee corner to the home office to the dissolution of fixed office structures, as propagated by Microsoft, for example, in the context of New Work (Microsoft 2019). Furthermore, job rotation concepts can likewise be seen as a corresponding measure to get employees out of their familiar environments and bring them together with other colleagues and organisational areas with whom there has previously been little or no contact. We also include a changed meeting culture (Eppler and Kernbach 2018) among these concepts. An Example A CEO of a Swiss Internet company with over 100 employees dissolved his office and henceforth looked for a different (mobile) workplace every day, in the midst of his work colleagues. According to him, this has changed communication and collaboration quite significantly  – not only in relation to himself, but throughout the entire company. His example served as a catalyst. Another Example At a major international corporation with tens of thousands of employees, a breakfast of board members is held once a week with representatives of the entire company, from remote production sites to administrative staff, who are always newly invited. As a result, the board knows the problems of the workforce, learns a lot about moods and fears, and can in turn explain the group’s actions on the market, its strategies and the challenges it faces. One Last Example The CEO of a company with over 1000 employees does not miss the opportunity to walk through the production hall once a week and talk to employees (management by walking around), asking about problems and opportunities for improvement. He is convinced that this is precisely what contributes to a particularly good working atmosphere and an open

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culture of discussion. Just as an aside, he personally congratulates everyone who has a birthday – directly at the respective workplace, e.g. in the production hall. Here, too, he is convinced that it is a particularly good investment of time. System Adaptation  With pragmatic intent, Kotter and Heskett (1992), for example, focus primarily on systems that are established as reward and sanction systems or process flows in organizations and thus have a strong influence on immediate behavior in organizations. A change in system or process leads directly to a change in behavior. This approach in the diction presented here has also been popularized in the German-speaking world by Sprenger (2012), who speaks of the adaptation of an institutional framework. The institutional framework acts as an impersonal guide. Transformation Management  The main representative of the transformation approach is Karl Prammer (2009). He combines the approaches of organizational development and change management into an approach that uses various techniques to involve the participants in the change process and make them co-creators of the results. Relational Approach  Sonja Radatz (2009) developed and disseminated this approach. It is certainly one of the most radical approaches in the transformation and change environment, but it is justified and successful  – even if it is not suitable for all environments. Radatz assumes here that the causes of problems lying in the past do not help, and even less to identify their originators. This would only create a problem trance and scapegoats, which would ultimately block change. Rather, in this process model, change begins with creating a shared vision of a future and planning and agreeing on its consistent implementation. This agreed vision contains goals on the one hand and new behaviors on the other. These new behaviors are introduced directly and immediately. Scrum  This is a process model that originates from agile software development (Glogger 2017; Rose 2019). Scrum means crowding  – and this is precisely what this method is intended to prevent. The approach is based on the realistic assumption that complex projects cannot be planned and formulated down to the last detail – and that even with the most meticulous description, there will still be differences in understanding and interpretation. For this reason, planning follows the principle of a step-by-step approach to the end result. In a strongly flattened hierarchy, regular coordination meetings of the Scrum teams are held in order to prioritize new activities and then to work through them quickly and selfcontrollingly one after the other (and not too many in parallel). The Scrum concept can also be used outside of software projects – wherever work is done in projects. Kanban  A software development method from Japan that is similar to Scrum. Kanban assumes that the number of parallel tasks should be limited to a few in order to achieve focused work and the highest possible productivity and turnaround times (Rose 2019). Tasks are mostly grouped on boards – in at least three categories: To Do (tasks waiting to be completed), Doing (in progress, called: “work in progress”) and Done (done, or ready for further processing). Creators of the service take the next task on their own initiative in the column “Doing”. This ensures that a manageable number of tasks are with the proces-

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sor and that the clients can see when their tasks are in progress. Prioritization takes place in short intervals (daily in the morning, weekly, depending on the environment) mostly within the team. This method can also generally be used wherever projects are carried out. Lean  Refers to a school of thought that emerged from the Six Sigma environment and reduces all methods and functions to a minimum. Numerous methods and tools have been developed for this purpose, which are successfully used not only in the technical production area but also in the administrative area (see e.g. Gorecki and Pautsch 2016). Design Thinking  This method, which is actually borrowed from the design process, puts the employees involved in the position of reflecting on both the needs of the customers and those of their own company. Based on this reflection, ideas are generated and prioritized, and the preferred solution is implemented concretely as a prototype. The prototype can be a model built with simple methods and materials or a drawing on a flipchart (see e.g. Uebernickel et al. 2015). With this approach, several processes, behaviors and procedures that are significant for “healthy” corporate culture are trained and experienced as beneficial: • Adopting the customer’s perspective: too often, organizations focus on optimizing processes that are practical for the organization, but more time-consuming than necessary for internal or external customers. The customer’s pain points are clearly addressed here. • Take the perspective of organizational strategy. • Learning that many ideas are not the “wish list to Santa Claus”, but are necessary to arrive at the best possible solution. Professional moderation of the Design Thinking process deliberately incorporates this aspect in order to avoid frustrations that arise from the fact that ultimately the proposal is implemented by others. Finally, everyone is involved in the development of the chosen solution. • Experience the benefits of collaboration: In the course of the process, it is experienced and thus learned that joint results usually lead to better success than those achieved alone.

Strategic Trust  We can refer here mainly to Covey (2009) and Sprenger (2007). Lack of trust in society requires high transaction costs and especially time and control. The same can be demonstrated in companies. Where there is no trust, information is withheld, uncertainty arises, power games run in the background and collaborative working becomes more difficult. We call strategic trust a concept in which the default setting is radically made to work with maximum trust in communication and collaboration from now on – if this is not granted or met, this is immediately sanctioned negatively. This is easy to introduce immediately in teams or projects, and the quick wins can be very convincing. Solution-Focused Approach  Steve de Shazer and Insoo Kim Berg are the founders of the so-called Milwaukee School and have significantly shaped the concept of solution focus internationally for decades. The solution-focused approach does not deal with prob-

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lem analyses or causes of problems but focuses directly on possible solutions. The guiding principle is the “miracle question”: “Imagine a miracle happens tonight and the problem we are talking about is solved! – How would you notice it, what is different?” This process, which originated in short-term therapy, can be readily applied in corporate practice on a great many occasions. The goal is to activate the strengths and resilience of individuals and organizations to find and execute solutions to problems found (de Shazer and Dolan 2016). The solution focus can contribute very significantly to a changed way of dealing with mistakes and problems in organizations. Theory U  Sociologist Otto Scharmer (2014) developed this approach at MIT when he addressed the question: What makes the difference between managers who successfully lead transformation processes and those who fail in the process? With Theory U, Scharmer has created a fundamental work that anchors sustainability and global responsibility in leadership with the help of concrete leadership tools. The central anchor point here is that the quality of results and solutions is largely determined by the approach. A particular focus is on so-called presencing, the ability to be mindful and attentive to a particular process and the people involved and affected. This method is very much concerned with the future and the question of how the new can come into the world – or even into the company. Organizational Constellations  Organizational constellations are a systemic method for diagnosing and finding causes of conflicts and solutions for management problems. The great advantage of the method is above all its speed. It rarely takes more than half a day to solve intransparent, seemingly hopeless problems and entanglements. This solution efficiency makes the method increasingly popular in corporate practice. Organizational constellations are primarily associated with the names of Gunter Weber, Insa Sparrer and Matthias Varga von Kibed, who have done fundamental methodological work. The detailed article by Gaudart and Herget (2018) presents application scenarios and prototypical approaches. Organizational constellations have the potential to fundamentally change corporate culture through new insights, to the point of questioning previous basic assumptions. This means that this process, which can usually only be changed very slowly, can be accelerated rapidly. Feedback Forms  Feedback is central to consequence management, which has been mentioned many times before. The special challenge lies with feedback in the hierarchy and feedback among peers, i.e. equal colleagues. Giving and receiving feedback should be learned in any case; it is often erroneously assumed that it is a generally available competence. There are various aspects to be considered in the constructive feedback process, which should be taught in (internal) training courses. In this context, the widespread technique of so-called sandwich feedback (in which feedback is broken down into a positive, negative and again positive part), which is well known from coaching, has several shortcomings. Well-applied feedback not only increases motivation but also productivity, as several studies have shown (Feedback 2019). The principles of non-violent communication formulated by Rosenberg also prove their worth in feedback (Rosenberg 2016).

8.3 Recent Approaches to Changing Corporate Culture Genesis of the corporate culture

Arfacts Behavior Standards Values Basic assumpons

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Crical events can trigger rapid change

Fig. 8.2  Change model of corporate culture

Nudging  Enjoys a high popularity right now and goes back to the book “Nudge. How to Nudge Smart Decisions” by authors Thaler and Sunstein (2014) in the first edition from 2008. Behavioral economics assumes that humans are inherently limited rational beings and do not always act rationally. Research into cognitive traps has also led to the development of concepts that make it easier to enable better decisions on their own without having to be patronised. This is done by influencing their context, which is called decision architecture. Classic examples come from the health field (sports, weight, healthy eating, …). This approach focuses on the behaviour of individuals (and groups of individuals) and “gently” influences them by shaping their context accordingly. It is precisely this potentially manipulative character of the approach that requires responsible handling in companies in order to promote a desired behaviour. Despite a possible ethical balancing act, this approach (“libertarian paternalism”) is not only used in politics and health, but increasingly also in companies to improve performance. If we locate the methods with regard to their starting point on the different levels of the corporate culture, the allocation in Fig. 8.2 results.

8.3.2 Suitability Potential for the Own Company Which methods are now suitable for use in one’s own company? At this point, a proposal for an evaluation portfolio can be formulated. In this portfolio we distinguish once according to the degree of the problem: with the 1st degree we speak of the optimization of existing systems. They are adapted, improved, but not fundamentally turned into something completely different. They correspond to the procedure described as Kaizen or CIP (see Sect. 7.1.1). In the case of a fundamentally different solution, we speak of the 2nd degree.

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It corresponds to transformation and has the potential to fundamentally change the way something has been done before. The second axis deals with acceptance in the organization. Is there a willingness to use this method? Are there connecting factors, is there a perception combined with a corresponding willingness to give the method a chance to be implemented? Are the necessary competences available to introduce the method? With this tool a first classification of presented (and further possible) instruments can be made in order to select appropriate candidates and to implement them in the company. In this way, of course, an organisational sub-unit can also be identified that is more open to new methods, acts as a pilot and initiates a roll-out. Figure 8.3 presents the framework, for each organisation a selection of the methods presented above (and others) can be made and linked to the potential use. This chapter makes it clear that, in addition to established methods of organisational development for comprehensive cultural adaptation in companies, there are increasingly also agile methods and instruments that can bring about rapid cultural change. Depending on the approach chosen, this does not have to have any effect on the overall organization at first, but it can certainly serve as a catalyst for development in parts of the company and lead to very quick quick wins, which can pave the way for a more comprehensive culture change project. Problem level Organizational structure Transformation (2nd degree)

Co-Creation

...

Scrum

Optimization (1st degree)

Nudging

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Fig. 8.3  Evaluation portfolio for the classification of agile methods

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References

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8.4 Key Points 1. Cultural change is possible. Methods and interventions change the reality in companies and lead to a changed corporate culture. 2. The different levels of corporate culture must be addressed with appropriate methods and interventions. 3. When using methods, it is helpful to consider the three levels of the architecture model. 4. The aspired corporate culture must be anchored in everyday life. To this end, the “why”, “where to” and “where from” must be worked out in concrete terms. Close support during implementation by managers is important in order to achieve sustainable anchoring and acceptance. 5. Culture hacks represent a new form of intervention. They are emotional, immediate and direct, visible and tangible, and their use requires courage. They are the link between strategy and lived practice. They are a very effective reflection tool. 6. In addition to classic organizational development measures, agile methods of cultural change are increasingly coming into focus. 7. Methods of culture change can be located company-specifically and presented in a portfolio. This provides an orientation on the desired degree of problem solving and the extent of the expected acceptance in the company.

References Bär M, Krumm R, Wiehle H (2010) Unternehmen verstehen, gestalten, verändern. Das Graves-­ Value-­System in der Praxis. Gabler, Wiesbaden Bremer M (2012) Organizational culture change: unleashing your organization’s potential in circles of 10. Kikker, Zwolle Cameron KS, Quinn RS (2006) Diagnosing and changing organizational culture: based on the competing values framework. Jossey-Bass, San Francisco Covey SMR (2009) Schnelligkeit durch Vertrauen. Die unterschätzte ökonomische Macht. Gabal, Offenbach de Shazer S, Dolan Y (2016) Mehr als ein Wunder: Die Kunst der lösungsorientierten Kurzzeittherapie. Carl Auer, Heidelberg Drennan D (1992) Transforming company culture. McGraw-Hill, London/New York Edmonds SC (2014) The Culture Engine: A Framework for Driving Results, Inspiring Your Employees, and Transforming Your Workplace, Wiley, Hoboken, New Jersey Eppler MJ, Kernbach S (2018) Meet up!: Einfach bessere Besprechungen durch Nudging. Ein Impulsbuch für Leiter, Moderatoren und Teilnehmer von Sitzungen. Schäffer-Poeschel, Stuttgart Feedback (2019) Feedback geben: Regeln, Beispiele, Tipps. https://karrierebibel.de/feedback-­ geben/. Accessed 17 Oct 2019 Gartner (2018a) Culture in action. The role of leaders in making culture perform. https://www.gartner.com/en/executive-­guidance/culture.html. Accessed 18 Nov 2019

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Gartner (2018b) How to create a powerful organizational change management storyline. https:// www.gartner.com/smarterwithgartner/how-­t o-­c reate-­a -­p owerful-­o rganizational-­c hange-­ management-­storyline/. Accessed 18 Nov 2019 Gaudart A, Herget J (2018) Organisationsaufstellungen – Eine systemische Methode zur Diagnose von Konflikten, Treibern und Barrieren im Kulturentwicklungsprozess. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best Practices. Springer, Wiesbaden Gibbons P (2015) The science of successful organizational change: how leaders set strategy, change behavior, and create an agile culture. Pearson, London Glogger B (2017) Scrum Think big: Scrum für wirklich große Projekte, viele Teams und viele Kulturen. Hanser, München Gorecki P, Pautsch PR (2016) Lean management. Hanser, München Herget J (2018) Agile Methoden zur Gestaltung der Unternehmenskultur: Dynamiken der Veränderungsfähigkeit für einen Kulturwandel nutzen. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best Practices. Springer, Wiesbaden Herget J (2021) Culture Hacks  – Strategisch einsetzen! Mit gezielter Irritation zur gewünschten Unternehmenskultur. Springer Gabler, Wiesbaden Kotter JP (2011) Leading change. Wie Sie Ihr Unternehmen in acht Schritten erfolgreich verändern. Vahlen, München Kotter JP, Heskett JL (1992) Corporate culture and performance. Free Press, New York Microsoft (2019) So klingt die Zukunft! https://www.microsoft.com/de-­at/unternehmen/das-­neue-­ arbeiten/hoerbuch.aspx?CollectionId=c41cbc5e-­b4f2-­48f2-­b4ea-­48ac93cf50c1. Accessed 19 Nov 2019 Prammer K (2009) Transformationsmanagement: Theorie und Werkzeugset für betriebliche Veränderungsprozesse. Carl-Auer, Heidelberg Radatz S (2009) Veränderung verändern: Das relationale Veränderungsmanagement: Die zukunftsweisende 4. Schule des Veränderungsmanagements. Literatur VSM, Wien Rose D (2019) Das agile Unternehmen für Dummies. Wiley, Weinheim Rosenberg MB (2016) Gewaltfreie Kommunikation: Eine Sprache des Lebens Taschenbuch. Junfermann, Paderborn Sagmeister S (2016) Business culture design. Campus, Frankfurt Sanchez Reina D (2019) Shape, shift and share: leadership for ContinousNEXT, Gartner CIO & IT Executive Summit, 20–21 May 2019, Munich, Germany Scharmer O (2014) Theorie U. Von der Zukunft her führen. Presencing als soziale Technik. Carl-­ Auer, Heidelberg Sprenger RK (2007) Vertrauen führt. Worauf es im Unternehmen wirklich ankommt. Campus, Frankfurt/New York Sprenger RK (2012) Radikal führen. Campus, Frankfurt/New York Thaler RH, Sunstein CR (2014) Nudge. Wie man kluge Entscheidungen anstößt. Ullstein, Berlin Uebernickel F et  al (2015) Design thinking: Das Handbuch. Frankfurter Allgemeine, Frankfurt am Main

9

Setting Up Culture Change Projects the Right Way: Implementation and Controlling

Abstract

The success of all change measures in the context of design and change processes can ultimately be measured by the degree of successful introduction and transfer into daily routines. After the selection process of the new measures and methods to be introduced (or changed) has been completed, the introduction planning is of fundamental importance. When are which measures to be introduced in which areas, when are they to be rolled out across the organisation, how is their success measured and when are corrective interventions necessary. The portfolio of measures and methods to be used must be viewed dynamically and in a networked manner – the success of individual activities often depends on the use of other methods. This sensitivity to possible dependencies is important when creating a roadmap and controlling the introduction of the various measures.

Change projects do not run by themselves. Especially not if their urgency and necessity is not well communicated. Therefore, it is necessary to break up previous routines and to learn and practice new behaviors. All change processes are always fraught with uncertainty, and employees and managers are particularly challenged. Often the previous comfort zone has to be left behind. These are all requirements that have to be taken into account in the implementation process. In many companies, however, there are good competencies in project and HR management that can be put to good use here. A central challenge in culture change projects is scaling and project coordination: How large should the projects be, to which organizational subareas should they be limited, if any, are pilot applications important before rolling out, who are the promoters, who are the

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ambassadors of culture change, who are trustworthy contacts for the employees in their own areas? These questions already make it clear, there can be no general recommendation for all. This depends too much on the specific organization, the size, the locations, the breadth of the value chain and many other factors. Those responsible for project management must set up a good, suitable and coherent project here. This task should be approached with a willingness to experiment and take risks. These two attitudes are significant for most corporate cultures anyway, so they can be tried out experimentally here as well. Concrete cultural projects are usually innovative for the company; there is a lack of routines and related experience. This should definitely be dealt with offensively, it is a joint learning, both the realization and implementation of the methods as well as the project management for this. In this chapter a few useful hints should make this work easier and clarify the essential steps.

9.1 Determine Procedure Concept For reasons of transparency alone, it is always important to view and locate all projects and sub-projects as a whole. In this way, project management can always address the respective phase with the corresponding measures without going into too much detail. A rough process concept should include the following phases: 1. Identification of the degree of the problem The aim here is to identify areas and groups of application that suggest a high level of benefit and at the same time a corresponding urgency; this needs to be checked. The focus of the planned measures must be sharpened, the scope of the project must be limited and the time planned for implementation must be estimated. It is important to evoke a need on the part of the employees (Kotter 2009), this should be a good prioritization reason for an application or even for the organizational subarea that comes into question as a pilot. 2. Maturity of the organization This is about the fit of the selected methods and measures to the development status of the organizational (sub-)area. Is the organization “ready” for this method, does it meet with acceptance or are further preparatory measures necessary? The management, the employees, but also their environment (partners, technologies, etc.) must be taken into account. 3. Method selection If one follows the systematic approach of this book, there will be no shortage of methods and measures to be implemented. Consequently, the selection of methods is of great

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importance. The previous steps are decisive: the clarification of the problem pressure and the organizational maturity for this measure. These are important prerequisites for launching a successful project. The concrete requirements, the selection of the methods that promise the greatest success and their operationalization for the concrete conditions in the application area must therefore be taken into account. 4. Implementation For this, some basic decisions are necessary: will a pilot project be carried out, in which areas, how is it scheduled, when is the go-live planned, how is the broad roll-out planned, will it take place simultaneously in the entire organisation or partially after the different areas? 5. Evaluation Implementation will not always have its full effect immediately: an evaluation of the project and a review of the degree of fulfilment of the project objectives and the experience gained is usually useful. Lessons learned can be derived for further projects, measures for readjustment and fine-tuning can be determined and, if necessary, a new initiation with a modified design or adapted methods can become necessary. This proposed procedure is shown in Fig. 9.1.

Procedure concept 1. identification of the degree of the problem Focus - Scope - Time 2. maturity of the organisation Employees - Management - Environment 3. method selection Requirement - Selection - Operationalization 4. implementation Strategy - Pilot - Roll-Out 5. evaluation Degree of fulfilment - readjustment - new initiation

Fig. 9.1  Procedure concept for the implementation of measures and methods

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9.2 Evaluate Interdependencies Between Measures A further tool for the planning process can be a crosslinking matrix of the selected methods. A corresponding crosslinking matrix is recommended to clarify in advance the interaction of methods that can be supportive, indifferent, i.e. without mutual influence, or even conflicting. As a result of this, for example, a temporal shift of the individual measures can be useful or corresponding additional accompanying measures can be designed. In a crosslinking matrix, all measures are plotted on the X and Y axes and then assessed as to whether a critical interaction takes place. Here it is possible to proceed with the following evaluation categories: 0 = No interaction 1 = Weak interaction 2 = Strong interaction It is evaluated as follows: Method a has an effect on method b, c, d, e; method b has an effect on method c, d, e and so on. The creation of this matrix and its result lead to a higher awareness of the individual methods and their impact on the organisation, i.e. on the structures, processes, managers and employees. It helps to design anticipatory preventive or reinforcing measures. A rudimentary example is given in Fig. 9.2. In the evaluation, the quality of the interaction should be analysed at the same time: are these to be rated as positive/supportive or negative/critical? Special consideration must be given to methods that exhibit a strong interaction, both as an active, i.e. influencing factor, or as a passive, strongly influencing factor. Their controllability should be ensured.

9.3 Moving from a Portfolio of Methods to a Roadmap In the context of change projects, the path into daily practice is fundamental for sustainable implementation in the lived reality of work. Above all, four essential decisions have to be made: • Which methods and interventions are to be implemented? • In which areas of the organization should these be introduced? Here, it is possible to vary between a team, a department, an area or an entire organization simultaneously. This question can only be answered in a specific case. • When are the respective implementations to be carried out? • How do we ensure the interlocking of the three levels according to the architecture model? That is, the strategic level with the concrete working level and the culture hacks.

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The roadmap provides a suitable tool for planning and communicating these activities. It provides transparency and orientation. For this purpose, it is necessary to select the methods and measures to be implemented, to estimate the implementation time, to determine times for evaluation, whether as an interim or final evaluation depends on the complexity of the respective measures. After a successful introduction, it is then agreed in which other areas these methods can also be rolled out, if initially no organisation-wide introduction takes place. A localised introduction always makes sense if the complexity of the measure is high and experience is to be gathered first, also in order to make incremental improvements to the process – or even to classify a method as unsuitable and discard it. The roadmap depicts the individual methods to be introduced on a time axis (see Fig. 9.3). Likewise, in addition to a general roadmap for the entire company, it is also possible to design a roadmap for each organizational subarea. This gives each area its “own” route plan on the cultural journey. A more comprehensive visualization could also be achieved through a more detailed information graphic, which can serve as a representation of overall contexts.

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Roadmap Define standards for collaboration

Rollout standards

Systematic feedback

Rollout in processes

Concept customer events

Feb

...

... ...

Rollout

Mar

Appraisal system new

Evaluaon

...

Big Data Strategy

Jan

Customization & Extension

Evaluaon

Apr

Fig. 9.3  Simplified method roadmap

9.4 Install Project Management Change processes require a professional approach. Any implementation of measures should therefore follow the normal project management standards. The more complex the company and the project, the better planning is necessary. In small companies, the project manager (or the entrepreneur) will only be able to manage this with a roadmap and a few work packages without major project management planning; in large organisations with more extensive projects, multi-project management with a project office may be advisable. In any case, the interlocking of the various phases requires professional planning, ideally with the project management tools that have proven themselves in the respective companies, such as those proposed by the large project management organizations (IPMA, PMI or Axelos (Prince2)). Likewise, roles should be assigned and filled within the framework of cultural projects. In addition to a project sponsor, which should usually be top management, other important roles should also be assigned. The project manager can take on the role of a change representative who gathers a team of change ambassadors around him who also act as contact persons for all employees.

9.5 Measure and Evaluate Implementation Success The cultural journey requires a constant exchange of experiences. It is therefore advisable to institutionalise this and to make the experiences gained a fixed point in meetings at the various levels at certain intervals. The culture change will be new territory for most employees, especially the managers. Offering a space where successes, solutions, problems or even failures can be reflected upon as learning opportunities proves to be very expedient. It should also be possible to discuss possible further strategies and measures resulting from the ongoing implementation there. In addition, even coaching of managers

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by external parties, if internally these competencies are not available, can be very useful. In order to set this process in motion and keep it going, fixed points in time should be set in the project planning at which the implementation success to date should be measured and evaluated. Often, reporting on lessons learned will allow meaningful readjustments and refinements to be made. This may go so far as to allow measures and projects that prove unsuitable to be discarded at best. This openness should be possible, after all, the measures and projects conceived are to be regarded as innovations in the organisation, and these also carry the risk of failure. The more openly change management is approached, the more flexibly cultural change measures can be designed. In addition to a formative evaluation, i.e. an interim evaluation with the aim of enabling meaningful corrective measures, the summative evaluation can be used, which marks a conclusion with subsequent release (or rejection) of a completed method introduction. Here, too, it remains important to proceed in a cascading manner; the change process encompasses various management levels and areas of responsibility, which should be given the opportunity to exchange information with each other. If openness is not present in the teams to the required extent, a digital “suggestion box” could also be set up in which suggestions, criticisms and the like can be left by employees. Even if it goes against a good, open corporate culture, this can be done in anonymous form if necessary. These suggestions should then be taken up and discussed within the appropriate framework. Possible solutions can be worked out from these suggestions. In the case of managers with a prevailing culture of trust, however, anonymous forums should not be necessary; this would in any case be a clear sign that something is going on suboptimally. In any case, this would be an indicator for subjecting the respective project to an evaluation.

9.6 Ensure Roll-Out Only a few measures will be applied simultaneously throughout the entire company in all affected areas. It therefore remains important to identify pioneer areas that will be the first to start with the measures and contribute their experience to the further optimized process. When a method introduction has finally been implemented with success, the roll-out to the other areas for which this method is highly relevant should be planned. This can also be done in cascade according to the different areas of management and responsibility. In any case, a further exchange of experience should be ensured. Where new ground is being broken, there is often uncertainty and the opportunity for communication and coaching is important in order to achieve the desired results. What Areas Should You Start with for Both the Pilot and the Roll-Out? There are two answers to this question: On the one hand, in the application domains in which those involved would like to see change, in which a great openness to change prevails. On the other hand, domains with a particularly high level of suffering lend

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themselves to the hope of an improvement in the situation that is perceived as burdensome. If both come together, so much the better. And, of course, both poles of this response can be reinforced by skillful management. The “Sense of Urgency” (Kotter 2009) can certainly be promoted. A good management communication policy will help. It also makes sense to work with scenarios (for example: “What happens if nothing happens”).

9.7 Collecting and Processing Learnings It has already been mentioned many times: a change process for culture change is not a routine process for the company and the employees involved. Many of the new methods to be applied, for example the culture hack, require the employees to acquire new skills: how are meaningful culture hacks formed, when are they to be used, how are the emerging reactions to be dealt with? The same applies to the motivational feedback process. This will also present many managers with new problems. The establishment of a competence centre for the change project is likely to prove useful for larger projects. This can be a person in the form of the project manager, a project team or even coaches who are available as contact persons. The employees affected should know that they can receive the most comprehensive support possible as part of this process. An institutionalized exchange of experiences should be integrated, in which, if possible, the experiences made can be openly discussed. This should take place at every management level and in every area of responsibility and, for managers, also cascade with their peers and their respective manager. Change for the entire company will only succeed if all areas participate. By the way, this new collaboration can already be an extremely important experience of a new, lived corporate culture. Culture issues belong regularly on the meeting agenda. Even if it sounds like a lot of time, it doesn’t have to be and the time is well invested. In any case, it is cheaper and better to prevent well than to recover a possible damage afterwards with many activities.

9.8 A Warning and Encouragement at the Same Time! Even though much of this chapter may sound technical now: optimism, confidence and joy in experimenting should not be lost in the whole process of culture change. Joy when something has worked and a “now we’ll try it differently” attitude when something has not worked. Because failure can be a very good teacher, especially in cultural work. Is It Possible to Start the Culture Change Small, Limited to One Area? It is often emphasized, also in this book, how important top management support is for the entire path of cultural work. This is undoubtedly true. But what can you do if you, as a manager, do not see yourself in a position to inspire the whole company for cultural

Reference

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change? Then simply start in your own area for which you are responsible: be it in a department or even just in a team. You can start anywhere as an “island” to improve your company’s culture. The company-wide approach is not a prerequisite for this. So don’t be discouraged if no takers are found. Take your area of responsibility and get started. No one is stopping you! You will soon find that imitators will be found.

9.9 Key Points 1. A phase-oriented procedure concept can be visualized and used as a roadmap for the selection and implementation of methods. 2. Mutual dependence of the methods used will be the rule, and a crosslinked analysis will create a better basis for action. 3. Visualization of the cultural change through a roadmap creates orientation. 4. A well-structured project management with clear roles facilitates the cultural change. 5. The success of the implemented measures should be subject to evaluation. Depending on the complexity, this can be done formatively or summatively. 6. The success of cultural change depends to a large extent on the selection of the areas of the company in which the various methods are introduced first. Success leads to imitation, failure makes cautious. Culture change should not be imposed, but desired. 7. Exchange of experience and training are important: where new ground is broken, there is increased uncertainty. Both management and employees should be given space to reflect on their ideas, concepts and experiences. 8. Joy in creating and courage for the new should guide this process. Everyone can start in their own area of responsibility. 9. Do not lose the joy of experimentation, desire to try, do not be discouraged by failures, enjoy learning and creating. Get started!

Reference Kotter JP (2009) Das Prinzip Dringlichkeit: Schnell und konsequent handeln im Management. Campus, Hamburg

Integrative View: The Concept of Culture Excellence

10

Abstract

The concept for shaping corporate culture is based on several phases and the application of various models and numerous methods. The results obtained form the basis for generating strategies and locating measures at various architectural levels. The activities are accompanied by project management and controlling of progress. The goal is to enable new or changed mindsets and behaviors. What remains important is an integrative view of a company’s cultural processes: from analysis to design and to transfer into everyday practice. This chapter sharpens the focus on the interaction of these different sub-aspects as elaborated earlier. The concept of Culture Excellence is an integrated model and a methodological approach that can be used to manage culture change processes.

Wanting to shape the corporate culture is a complex task. The previous business model and the pursued corporate goals and strategies represent the starting point. The desired culture must not only be adaptable to the existing system, but must also promote and support it in the pursuit of its goals. It is important to go through the individual phases within the framework of this design process; their focused depth is always oriented to the situation of the individual company. A company with many thousands of employees will have to set up the corporate culture project differently than a company with 50 employees. Nevertheless, the individual procedural steps, as outlined in this book, can be applied in a largely similar manner. It is up to the creativity of the responsible manager to create an individual concept that can fully meet the requirements. In this chapter, we summarize the most important aspects of the methodological spectrum presented from this point of view.

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_10

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10.1 The Individual Building Blocks of Culture Excellence Culture Excellence is an integrative concept for shaping corporate culture. The goal is to be able to systematically approach the management of corporate culture, to clarify the interdependencies and to be able to strategically set up this culture design process and synchronize it with ongoing operations. This also enables a permanent alignment with the requirements of the company. It is important to dovetail this process closely with ongoing business operations. The individual building blocks of Culture Excellence are as follows: 1. Anchoring the procedure in the architecture model of the corporate culture (Chap. 3) 2. Integration of the phase model of the Culture Excellence process (Sect. 3.3) 3. Application of model development and prioritization (company-specific culture model) (Chap. 4) 4. Alignment of the model with corporate goals and strategies (Sect. 4.5) 5. Application of the analysis methods and their interpretation (culture audit and maturity model) (Chaps. 5 and 6) 6. Implementation of the strategy development (Chap. 7) 7. Integration of the selection process of methods, measures and interventions (tool box) (Chap. 8) 8. Implementation of project management (Chap. 9) 9. Evaluation and control of the implementation (Chap. 9) 10. Integration of pilots and roll-out (Chap. 9) The aforementioned building blocks form the core of the activities of the Culture Excellence concept.

10.2 Integration of the Individual Building Blocks into the Concept of Culture Excellence: Approach and Advantages The Culture Excellence approach is an overarching concept and integrates the individual phases, models and methods and the implementation of the strategies in the daily business processes (see Fig. 10.1). It is based on the building blocks described in this book and, due to the company-specific adaptation and the collaborative approach, is equally suitable for the fundamental sensitization for the topic in the entire company. It is important to coordinate this with the previously established processes and to embed it in the current and future framework conditions of the company. The design of the corporate culture must not develop an isolated life of its own within the company. It should also be ensured that the central individual corporate culture model is closely coordinated with the business goals and strategies. Only this will ensure a high level of acceptance and

10.2 Integration of the Individual Building Blocks into the Concept of Culture…

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Corporate culture process Model

Corporate Culture Audit & Evaluaon

Strategy & Tools

Roadmap & Project Mgmt

Implementaon & Process Management

Corporate strategy

Evaluaon

Integrate selected methods into processes

Fig. 10.1  The concept of culture excellence

sustainability. The individual culture factors selected should be examined in advance to determine the extent to which they support the corporate strategy. This also enables better prioritization. At the same time, of course, this also harbours a certain potential for conflict: the (top) management in particular will be aware of the business goals and strategies in terms of their significance and effects, and these will often only be announced to the employees with a delay – if at all. On the other hand, the prioritization of cultural factors according to their current and future importance is mainly done by the employees. It can therefore happen that different prioritisations are made within the company. In this case, the management is responsible for intensively shaping the subsequent moderation and coordination of the prioritizations. At the same time, the application of the tools for the corporate culture audit illustrates the importance of practicing clear communication about goals and strategies. In this way, the design of the corporate culture can also contribute to a better understanding of strategy within the company, an added value that should not be underestimated. The advantages of a systematic and structured approach are obvious: • • • • • •

Confidence in the planning of the cultural design in the individual phases Integration of the employees and thus good communicability of the procedure Clarification of the complexity – but at the same time feasibility – of the project Basis for the selection of coordinated and adapted models and methods Basis for management commitment and acceptance of sponsorship Basis of the controlling of the cultural design process

The procedure outlined corresponds to a generic concept and can always be adapted to the situation (see also Herget and Mader 2018). The concept of Culture Excellence is flexible in its application, it is above all committed to systematics.

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10.3 The Cultural Design Process as a Recursive Model After culture work is before culture work – this statement, which may sound provocative, will reflect reality, because in a dynamic world of the market, very little will be constant. The more fluidly the process of adapting the corporate culture required in each case is mastered, the more self-evident cultural work will become. If one understands the corporate culture essentially also as clarification and translation of the sense of entrepreneurship and identity of the company, this can always energize the organization anew. Therefore, it remains important to enable and establish an immediate feedback process within the cultural design. This has to take place not only after the completion of the project, but also in the individual phases themselves. Target formulations in the individual phases form the starting point of the respective feedback loops. In these, it should be analysed and reflected whether the desired goals have been achieved and which measures, if any, need to be taken. Even if the procedure offers a high degree of autonomy and transparency for the project participants, it still does not seem advisable to tackle such a delicate and difficult process as a cultural change without experienced employees on one’s own or even as a first project in the environment of change management. Working on and with systems is one of the most delicate undertakings that can be undertaken in an organization. Therefore, it may be advisable to call in experienced experts to accompany this process. The procedure described here ensures that the process methodology, starting with the strategic alignment, through the analysis of the current situation and the formulation of objectives, to the selection of measures, is consistently systematic. Culture Excellence thus also serves as an instrument for turning away from the often encountered arbitrariness in the selection of measures. Finally, the importance of knowledge management should be emphasized: De-briefing after completed process steps, lessons learned and knowledge transfer (also to enable cascading preparation) should be institutionally established. This will also help to perfect the recursive process presented above and to professionalise the procedure.

10.4 Key Points 1. The culture development process is structured and systematized by a holistic view in the concept of Culture Excellence. 2. The individual building blocks are connected to each other both chronologically and through interrelationships. On the one hand, they provide input for later phases, on the other hand, they are influenced by other results at the same time. 3. Culture Excellence integrates the individual building blocks to better manage the process of shaping corporate culture.

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4. The concept of Culture Excellence provides a framework for the individual phases of the culture design process in a coherent procedural model. 5. Culture Excellence enables any scalability of both the method itself and its internal use within the company; it represents a reference point in the systematic approach to corporate culture. 6. The methodologically open approach with regard to the selection of interventions establishes Culture Excellence as a meta-instrument that leads from survey to analysis and goal formulation to a systematic selection of methods, thus ensuring that the chosen interventions are selected solely on the basis of their fit and not out of any particular preference for methods. 7. In a field such as corporate culture, which is highly charged with emotions, Culture Excellence ensures an orderly and coordinated procedure through its inherent systematic approach, which is particularly useful for building trust in the context of a cultural change. An experimental or random character is thus removed from the process of method selection, which is also conducive to the acceptance of the chosen method.

Reference Herget J, Mader I (2018) Culture Excellence: Das Unternehmenskultur-Audit  – ein Werkzeug zur systematischen Bestimmung der Unternehmenskultur. In: Herget J, Strobl H (Hrsg) Unternehmenskultur in der Praxis. Grundlagen – Methoden – Best practices. Springer, Wiesbaden

Don’t Fail in the Culture Change Project: Do’s and Don’ts

11

Abstract

The attempt to shape corporate culture is always a delicate undertaking, because it calls into question the self-image of organizations, teams and individuals. Values and behavior are centrally addressed: why do we act the way we do and what effect does this action have on other people. It is therefore a two-way process, and by its very nature a distanced approach to the subject will not be successful. Mind, feelings and actions are equally addressed: Head, heart and hand are to be integratively involved in processes of cultural change. In this section, we look at approaches that promote the development of a corporate culture, but also discuss procedures that can have the opposite effect.

Shaping corporate culture is one of the most challenging tasks in companies. Although corporate culture is not explicitly included in business models, most business models will not be sustainably successful without an adequate corporate culture. So how does one approach this task, which means more than just acquiring specialist knowledge? This task demands the whole person, it is often about personality development and emotional and social intelligence. These three aspects are usually neglected in education and training. In this respect, cultural change projects in which these aspects are inherent are accompanied by a risk of failure. This chapter aims to provide some pointers to increase the likelihood of successful projects while highlighting some of the pitfalls that could lead to failure.

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_11

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11.1 Why Is Shaping a Corporate Culture a Sensitive Undertaking? Culture is manifested through values, norms, beliefs, basic assumptions, convictions, behaviour and observable artefacts. We have reduced this to the basic formula of mindset and behavior. People become alarmed when they feel that not only are they being asked to perform in a certain way, for which they receive compensation in exchange, but they are also expected to change their “mindset” or behavior. This calls into question what has been tried and tested in the past, and what is usually considered good by the individual. This expectation can then easily be interpreted as a manipulative attempt  – with the consequence of creating an inner resistance (“You won’t get my head”). As long as no good new experiences are gained, a cautious and wait-and-see approach will be the rule. Only through positive experiences will the readiness grow to follow the new guidelines and expectations more willingly. This sensitive individual process of learning, development and change must therefore be accompanied and supported with great communicative persuasion and by setting a good example. Cultural change always involves head, heart and hand, to sum it up boldly but aptly. The culture journey goes beyond the classic skills transfer, where technical knowledge is imparted – in corporate culture, the human being as a being with his individuality, his convictions and his personality is required. And that is quite a lot! The following are some pointers that promise successful action and those that are more likely to lead to failure.

11.2 Do’s: These Approaches Promise Success The following behaviors promise the successful implementation of culture change processes: 1. Start with the “why”: The why should clearly outline the motivation for the culture change. Why a cultural change, why does the previous corporate culture no longer meet the challenges, what has proven itself and remains, what hinders, harms and is no longer up to date and what does the new behavior look like? These are leading questions, the answers to which will significantly support the process and its acceptance. 2. Generating insight into the need for change: Here, the two poles are available, on the one hand through the perceived pressure of suffering, which shows the current deficits and that the corporate culture cultivated up to now does not sustainably keep the company competitive and thus capable of survival. This is intended as a “push” for change. Secondly, by designing the image of a better, more productive, more successful way of working, through which the future image can create a “pull”. The attractiveness and meaning of the future corporate culture motivate employees to embark on the journey.

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3. Transparency about goals, processes, procedures and support: Providing orientation about the intentions, procedures, the necessary commitment and the support offered should create trust in the culture change project. By pointing out support measures, it should also be communicated that every individual wants to be involved. 4. Openness in the process: Authentic representation of the new corporate culture by the managers is essential. The design of the corporate culture should not come across as a new management fashion, but the concern should be honestly transported  – through the accompanying example, this can be very convincing and encourage imitation. 5. Think big: A high aspiration should be visible, but it should appear as doable, not overwhelming. The “big picture” should be the guiding star for all small measures, these should be reflected there as a necessary contribution. 6. Appreciation of the past: From a systemic point of view, it is important not to devalue what has been practiced so far, but to consider it as no longer adequate and therefore to replace it with something new. The past should be said goodbye to as a good companion so far. Everything that has proven itself as behaviour up to now should not be thrown overboard lightly, but should be carefully integrated into new strategies. 7. Scale down to team and employee level: A big vision should be formulated and an overall picture of the desired corporate culture should become clear, but ultimately it needs to be cascaded down to each individual employee: As the process unfolds, the employee should know what it means for themselves, what is expected of them, and what behavioral adjustments will be necessary. 8. Always consider and apply the three levels of the architecture model: It is important to keep all three levels in mind: the model of the desired corporate culture with the individual prioritized culture factors, the implementation in concrete processes with the necessary behavioral adjustments, and finally also the constant reminders of deviating behavior through culture hacks. This integrative view creates the desired cultural change; each measure on its own does not produce sustainable piecemeal work. 9. Mindset matters: Understanding and accepting the new paradigm of thinking that is considered important remains an important task in the company, for which the managers are primarily responsible. There may also be phases in which the mindset only “understands” after practiced behavior, i.e. the process of cognition and acceptance only develops afterwards. This “trying instead of studying” and then letting the results speak for themselves should definitely be employed. “Words instruct, examples convince” can often clarify the benefits of cultural change. 10. Behaviour and practices decide: The result is always visible in the concrete action. All cultural changes manifest themselves in specific behaviour or practices, so it is not a matter of mind-control, but of producing concerted, desired behaviour. If the doing is in accordance with the thinking and willing, so much the better. 11. Internalize Culture Hacks: In the initial phase of culture change, culture hacks are used primarily by direct managers. Over time and as the corporate culture develops,

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employees should also use culture hacks among themselves, but also, for example, towards superiors when they notice deviating behaviour. Thus, the use of culture hacks can advance to a “sport” and be acknowledged with mutual smiles. Then they are perceived as a friendly and collegial reminder. 12. Turn those affected into participants: This classic claim of all change processes applies nowhere more than here. Imposing would be the wrong way to go about it; employees should be involved in all phases, and the desired optimizations and new behaviors should come as employee suggestions whenever possible, as explained in the second level process of the architecture model (Sect. 8.2). The less directives managers give, the better for acceptance. 1 3. Cultivating flow and celebrating successes: The cultural journey should, at least in the initial phase, develop into a consciously perceived permanent process. And each stage reached should be appreciated, celebrated as a successful intermediate stage on the way. Stage victories are essential for maintaining momentum in the culture change. 1 4. Communicate: This is the sine qua non; without communication, cultural change will not succeed. This applies not only to managers at all levels, but also to communication about the culture change process by employees. Introverted employees should also be involved in this process, and managers and colleagues have a duty to encourage them to do so, despite their different characters. Culture change is a joint process. These references can be called to mind again and again as a reminder not to neglect something important.

11.3 Don’ts: It’s Best to Avoid These Practices On the other hand, the following behaviours should be avoided as far as possible, as they can make the success of the project impossible or at least severely impair it: 1. No mere lip service: “Walk your talk” is crucial. Employees notice very quickly whether the culture change is only delegated from the top down or whether it is a joint effort of the entire company – and only this creates the prerequisite for the successful culture change. 2. No hidden agenda: Behind a cultural change should be the desire for improved and sustainable competitiveness and no other, not articulated, hidden goals. If this becomes known, the entire project loses credibility and will no longer be accepted by the employees. 3. The “do it right – first time” attitude does not work: a cultural journey must give room for trying out, for experimenting, for rejecting chosen paths, and if these prove to be inadequate, failure must also be possible. There should always be encouragement to develop new approaches. A high degree of flexibility in the search for the better solution is important.

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4. No blame game: It’s not about finding scapegoats for why something isn’t working, who’s to blame, who’s doing something wrong. It’s about practicing new behaviors that move the entire company forward. Everyone has to be involved in this process, everyone’s knowledge and experience is needed. 5. Wanting too much: The cultural journey must not overtax, otherwise it will fail even before the start of the departure. It should always dock with what already exists, with what has been tried and tested, and continue from there. The goal must not be lost sight of; an orientation as to which measure marks which stage on the way to the goal facilitates the undertaking. 6. Wanting everything at once: Changes in mindset and behavior can take time. New habits do not emerge at the push of a button and certainly not when something is newly decided. It has to be practiced over a longer period of time, there has to be a lot of exchange of experiences. It may well take a quarter of a year for a new behaviour to become a habit, and it may take doing it 60 times before it becomes second nature and is perceived as the new normal. Patience is required. 7. Wanting everything right away: Laying good paths that interlock and evolve is a task that should not be underestimated. It makes perfect sense that individual employees start with certain aspects, other employees with others, and that after a certain phase, the experience gained makes it easier to adopt a tried and tested new behaviour. 8. Command culture: Culture is a living process that must continue to evolve. Incentives and successes are the right motivators on this journey. Joy in the perceived further development of the organism company is the best companion. 9. Don’t let it fall asleep: Not all phases will go smoothly, some experiences will involve frustrations, new hurdles will arise, the more important it will be to keep at it. If a partial failure is understood as a challenge to find better solutions, you are on the best way. Persevering and trying again and again acquires an important quality. 10. Don’t rest on your laurels: Culture change is a permanent journey, the destination is pushed further and further ahead over time. However, if you garnish this with a broadening of the horizon, then the path is gladly followed. The successful achievement of a milestone then serves as a source of strength to embark on the further journey with increased self-confidence and trust in one’s own effectiveness. 11. Do not accept arbitrariness: Systematics and structure remain important to maintain orientation. Emergent developments in the cultural journey will also take place, and these must be integrated. The better the culture develops, the more experimental the culture is, the more unplanned, emergent developments will occur. This is then a welcome side effect of a successful cultural change. 12. Do not without measurement: The soft topic of corporate culture can also be measured – and at all three levels of the architecture model. The culture audit enables time comparisons, the translation into processes with the right key performance indicators shows the way and the use of culture hacks and the dissemination of these also offers a good benchmark for the development of the corporate culture. There should be no

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fear of measurement in the first place, because “you can’t manage it unless you can measure it.” This also applies to corporate culture. 1 3. Do not produce heroes: “The Team is the Champion”: Culture change is a joint task, there is an initiator, but everyone has contributed something to the success of a successful culture change. The culture belongs to everyone, so success should belong to everyone. The saying really does apply here: success has many fathers and mothers. By avoiding these procedures, which are apostrophized as don’ts, the success of the cultural change can be increased considerably. These tips can be scanned through again and again as a kind of checklist, because many things can quickly be forgotten – nobody is perfect!

11.4 Key Points 1. Corporate culture intervenes in the thinking and behaviour of employees. Influencing this is a demanding task that goes far beyond simply imparting specialist knowledge. 2. There are numerous tips on how culture change projects can succeed, and these should be taken to heart. They concern both the project planning and the behaviour of the managers. 3. Due to the sensitivity of the topic, there are many potential pitfalls that can jeopardize the project success of the culture journey. These should also be kept in mind as warnings and companions for management on the path of culture change. 4. Cultural development is a joint learning process. 5. Successful development of corporate culture is a joint task and should be acknowledged as such.

The Special Role of Leadership

12

Abstract

Corporate culture must be exemplified. Role models are needed. Preaching corporate culture without living it condemns all efforts to shape a desired corporate culture to failure. In this chapter, we discuss some essential aspects of leadership behavior and shed light on the different functions of various management hierarchies. We also address new organizational forms and show that hierarchies and holocracies each require different responses.

Working on the corporate culture is above all a management task. It was already made clear in the first chapter how important communication, behaviour and also the transfer into daily processes are. Management is primarily responsible for these tasks. Ideally, the initiative to shape the corporate culture should also come from management. This chapter deals with various aspects of leadership.

12.1 Importance of Leadership: Leadership and Management The difference between leadership and management is often described by the differentiation in • Working on the system (leadership) • Working in the system (management)

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is made. This distinction clarifies both roles, but at the same time shows that corporate culture affects both roles. The active shaping of corporate culture initially involves working on the system of the organization; a direction is formulated, aspired to and pursued independently of concrete performance processes. It is a shaping of the organism company, as shown in the first chapter in the basics. It involves shaping a mindset and constructing expected behavior. The mere “managing” in the system is therefore no longer sufficient for the role of the manager, if the corporate culture is understood as an active management tool. On the one hand, the desired corporate culture must be translated and adapted to one’s own area of responsibility, on the other hand, the new behaviors must be exemplified and implemented, and thirdly, reflection processes must be evoked by means of culture hacks. This concerns managers at all hierarchical levels. In addition to technical expertise, managers are also expected to have a minimum level of cultural competence in the context of cultural change, i.e. the design of dynamic, interpersonal social systems with a high proportion of emotional, cognitive, behavioural and social competence. This requires personal maturity on the part of the leaders, which must be fostered. Without proper training, preparation and support, many managers will be overwhelmed with this task. Only a few, by virtue of their personality and experience, will have the necessary tools. But mastering this toolkit is not witchcraft either; at least essential parts of it can be learned. If the necessity and meaningfulness is accepted, the employees will see the cultural change as a learning journey, in which they will not expect the managers to provide perfect support. In these processes, the manager is above all a facilitator of change who encourages employees to initiate corresponding development processes. Expecting too much from management should therefore be avoided, as it would tend to arouse fears and create uncertainty among them. The metaphor of a joint journey may well be helpful here.

12.2 Role Model Behaviour as the Most Important Influencing Factor in the Development of Corporate Culture The importance of role model behaviour for the development of a aspired corporate culture was already highlighted at the beginning. At the same time, it was also pointed out that role model behavior alone is not sufficient to shape a corporate culture in the long term. However, without role model behavior it does not work at all. The central tasks of managers are therefore: • Communicating the values of the corporate culture: constant communication, integrating the values into corporate narratives as the basis for the desired mindset is elementary. These corporate narratives highlight what makes the company tick, what makes the employees successful and what is particularly valued. • Exemplifying values in the performance of duties. High ethical expectations are placed on managers. Management is closely scrutinized by employees in their daily

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activities. Any deviation from the formulated norm requires explanation, otherwise the measures lose their credibility. This example can then also be expected from all employees in their respective areas of responsibility. • However, managers must go further and transfer the values of the corporate culture into daily processes together with the employees. The reward and sanction systems should be adapted: the focus on the new culture factors must be supported by appropriate prioritization and measurement. • However, managers must also ensure that the values they strive for are constantly kept in mind through the use of culture hacks. Any deviation from the norm should be addressed directly, preferably again through culture hacks. This promotes the necessary reflection processes and supports the insight into the desired behavior patterns. • At the same time, management has an important role to play in what is known as consequence management. Managers should develop a strong sensitivity for collegiality in their teams: Free-riding, uncooperative behavior, breaches of trust, egoism and other behaviors that do not promote the overall well-being (in terms of motivation and productivity) of the team and the company as a whole must be sanctioned immediately in order to stop them. This also means that feedback behavior must be learned in order to find the right words and actions even in these emotionally quite stressful direct situations. This, too, will not be easily accomplished without proper preparation. However, as mentioned earlier, “toxic” employees are a great danger and burden for functioning teams. The role of managers is thus expanding – and this has cascaded from top management to lower management levels.

12.3 Management in a Sandwich Middle managers in particular find themselves in a dual role in cultural processes: on the one hand, they are managers and responsible for shaping and developing the corporate culture in their respective areas of responsibility, but on the other hand, they also play the role of employees, whose superiors in turn have to implement the corporate culture in their areas of responsibility. In a positive sense, therefore, middle managers can simultaneously learn from the good example of their superiors and at the same time pass on these practices to their employees accordingly. Of course, what has been said also applies in the negative case: the mistakes of the superior do not have to be replicated, one can learn from them and dispose one’s own behaviour accordingly. The importance of the exchange of experience in the peer group becomes particularly valuable in this group. The reflection processes in the role as an employee and at the same time as a superior must be used productively. At the same time, the importance of supporting managers in shaping the corporate culture is made clear. Management, regardless of hierarchical level, should make use of the “culture officer” and his core team  – if one

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exists. These could be called upon as coaches for the innovative development processes. The management will be the decisive factor for the success of the implementation, it should also be supported in the best possible way. In the case of smaller companies without an internal, well-trained core team, external coaches should be used under certain circumstances. Well-trained and supported leaders are essential for successful culture change. And these managers can, at the same time, act as coaches for their employees, as illustrated in the implementation of the second level of the architecture model. Middle management therefore deserves special support in the context of change processes.

12.4 Who Is a Role Model in the Democratic Enterprise? In an increasing number of companies, cooperative management styles are increasingly being introduced and cultivated, even going so far as to allow employees to choose their superiors themselves for a certain period of time. This trend seems to be increasing due to the new generation entering the labour market (for more on this, see Chap. 14). Concepts such as holocracy (Laloux 2015; Pircher 2018) are attracting greater attention and also popularity. Regardless of whether companies go down this path, the discussion of this trend in terms of corporate culture highlights some interesting aspects. For example, the question arises as to who is now a role model in a democratically run company. It can be argued that superiors are also elected in these structures, i.e. it is they who act as role models. This is undoubtedly true, but since such functions are often only temporary or for the duration of a project, it is to be feared that these “temporary supervisors” are reluctant to exercise this function, since they could soon be back on the same level as their colleagues and this could lead to conflicts later on. This is quite in line with experience in areas where collegial management is established. The following approaches could provide an answer to the challenges: • Colleagues (peers) should increasingly pay attention to each other’s compliance with the expected values and behaviors in the performance of their tasks and the interfaces contained therein. It therefore presupposes an empowerment of the employees who, by virtue of their competence and the clear assignment of tasks and the associated roles and functions, themselves become regulative in the sense of the overall company. • This behaviour can be strengthened by the introduction of a mentoring system. Those who have been with the company longer or who are more experienced should thereby naturally use their grown authority and competence for the benefit of the company as a whole. • Institutionalized feedback systems (by supervisors, peers, formal, informal, case-by-­ case, or systematic such as 360 degree assessment) can provide important input for individuals.

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• In order to enable these peer-to-peer feedbacks, corresponding formats should also be introduced, supplemented and promoted in the meeting culture. This makes an employee’s view of colleagues’ task performance transparent, and the supervisor, the group or even individual employees affected should be able to articulate this and demand a possible change in behaviour. For this purpose, for example, the techniques of non-violent communication according to Marshall Rosenberg (2016) could be used, as noted in Chap. 8. This is not an easy undertaking, but successful companies will be characterised by an open and constructive, thoroughly critical climate of discussion with consequence management. • This requires a high level of courage on the part of the individual employees. This courage, in the sense of acting stout-heartedly – because that is in the word courage – is to be declared a corporate value. Employees should be self-confident in their role within the company and not have to fear any disadvantages for open, critical and constructive behaviour. Corresponding competences for giving mutual feedback should then be particularly promoted and be part of internal training and development concepts. To illustrate what has been said, a story can be reproduced that Tony Robbins, one of the world’s best-known coaches, likes to pass on. He was asked about a problem by a commander of the US Navy Seals, an elite unit of the army. When individual Navy Seals leave the active force, this is often accompanied by a gradual social decline over time, which can even lead to alcoholism or drug abuse on the part of the former Seals. His question was what this was due to – and what could be done about it. The explanation of Tony Robbins showed it clearly: In active service the mutual expectation of thinking and behavior plays a decisive role. All Seals in their self-image as members of an elite force want to belong, camaraderie is necessary, relying on others is inevitable, support is given to those who need it. It is practiced teamwork with a high work ethic and high expectation of others’ behavior. No one wants to disappoint the expectation of the other peers, this leads to a high level of discipline and commitment to the ethos of working together. Each expects the other to do their job to the best of their ability or to ensure that it is for the best of all. If this is not done, it is immediately made known and sanctioned – there is no passing over. If this mutual expectation then falls away after retirement, the individual finds it difficult to continue to live up to this high standard and former self-discipline. A downward spiral begins for many who leave the Seals with only their own expectations or those of a less demanding environment. The mutual expectation therefore represents a weighty yardstick for one’s own behaviour. This story is intended to make one thing clear: in companies with a highly developed corporate culture, every employee has a responsibility to uphold the work ethic and thus influence their own behavior and the behavior of their colleagues – for the good of all.

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12.5 Key Points 1. Managers play the central role in the successful implementation of culture change processes in companies. 2. Leadership processes contain above all emotional and social elements, which are of greater importance in cultural work than technical competencies. 3. The role model behaviour of managers has a culture-shaping effect, in both a positive and negative sense. 4. Consequence management to maintain and promote motivation and productivity in the team requires outstanding competence in giving (even unpleasant) feedback. 5. Middle management finds itself in a dual role. This must be used in a positive way. As a rule, the manager will need support and coaching, and at the same time he or she will also have to act as a coach for his or her own employees. 6. New organizational concepts and models such as holocracy pose further challenges for employees. In hierarchy-free companies, peer-to-peer processes take on special significance. The comprehensive feedback among each other (and in the respective specific roles) becomes even more important.

References Laloux L (2015) Reinventing Organizations: Ein Leitfaden zur Gestaltung sinnstiftender Formen der Zusammenarbeit. Vahlen, München Pircher R (2018) Agilstabile Organisationen: Der Weg zum dynamischen Unternehmen und verteilten Leadership. Vahlen, München Rosenberg MB (2016) Gewaltfreie Kommunikation: Eine Sprache des Lebens Taschenbuch. Junfermann, Paderborn

Living Corporate Culture

13

Abstract

Corporate culture is alive! And it should be consciously developed and lived. The success of all efforts to create an adequate, aspired corporate culture is documented in the experienced, practiced everyday life of the company. The corporate culture reflects the daily lived normality. In the following chapter, hints for the sustainable implementation of the desired corporate culture are formulated. An active corporate culture requires, despite all efforts at normalization, that each individual feels called upon to fill it with life and to counteract possible undesirable developments in a corrective manner in good time.

Corporate culture is always that which is experienced and lived by individual employees in their daily operational routine. It is shaped by the collective patterns of interpretation that are nourished by the widespread narratives. It is the operational habitat that allows or disapproves, that makes new things possible or hinders them. Humans strive for homeostatic states, which means being allowed to arrive once before moving on again. If the cultural journey has proceeded in a manner similar to that outlined in the last chapters, the state reached, provided it fulfils what one had striven for, should certainly be cultivated for a while if possible. The emergence and consolidation of habits, the development of routines, the enjoyment of an achieved degree of professionalization deserve it.

© The Author(s), under exclusive license to Springer-Verlag GmbH, DE, part of Springer Nature 2023 J. Herget, Shaping Corporate Culture, https://doi.org/10.1007/978-3-662-65327-2_13

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13.1 Forming Habits Developing a “new” mindset (Dweck 2017), i.e. adopting new ways of thinking, requires repeated impulses for visualization and reinforcement. Especially the reward of the new behaviour helps to develop new routines (Duhigg 2014). Falling back into old patterns of thinking and acting should be avoided if possible. This will require patience as relearning takes time. Setting reminders again and again is essential. It is the same with a newly learned behavior. Here, too, it is necessary to reflect on the new behaviour again and again and to emphasise the advantages. For this purpose, it is necessary to schedule a 1-h meeting with the manager and/or colleagues every week over a longer period of time, for example three months, in order to exchange experiences, perceived problems, etc. The new mindset and a new way of thinking must not be forgotten. That a new mindset and a new behaviour are accepted smoothly and willingly is likely to be the exception rather than the rule. A constant awareness of the advantages that result from the new behaviour for everyone encourages the practised procedure. Problems that arise should be discussed together and solutions identified and tackled. After a good three months, the necessary meeting frequencies should be reduced – nevertheless, the cultural change should remain on the agenda. This will make it clear to all employees that they are serious about it. If culture change is not given a high priority, the likelihood of failure is high.

13.2 Reflecting on the Corporate Culture in Everyday Life It also makes sense to compare the “old” corporate culture with the new one. In doing so, the advantages of the new corporate culture should always be emphasized, if given. It is not a matter of portraying the old corporate culture as being of lesser value or of disparaging it; what is important is to see the development of the corporate culture as a positive learning process that benefits everyone involved – the employees, the customers, but also the company as a whole. Meetings, staff appraisals or project discussions are always useful for reflection. In particular, the use of culture hacks should be emphasized here as well: Culture Hacks should be used primarily when a deviation from the desired corporate culture is identified. The new corporate culture should always be remembered, and the culture hacks are a useful tool for sharpening the mindset. If the new corporate culture is accepted by the employees, these reminders are extremely valuable. Of course, culture hacks are of little use and are likely to be received rather cynically if the new corporate culture does not meet with employee acceptance. Understanding the need for and acceptance of the new thinking and behavior is a basic prerequisite for the effective use of these intervention techniques. At an advanced stage, culture hacks are not only used by managers, but also among colleagues. If this is accompanied by a positive understatement such as “now we’ve caught ourselves thinking or acting ‘old’” and this is acknowledged with a constructive “aha” effect, then the right level of maturity has been reached.

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13.3 Allowing Corporate Culture to Be a Dynamic Development Shaping corporate culture is one of the most difficult undertakings an organization can undertake. This is due to the following aspects, among others: • Often there is no open communication, reservations and rejections are not openly articulated due to the asymmetrical distribution of power in companies. • If we assume the validity of the widely respected Gallup surveys (Gallup 2018), well over two-thirds of employees, for example in Germany (71%) “work to rule” and a further 14% have no emotional attachment to their employer at all; they have now “internally quit”. These two groups of employees are not likely to want to change their mindset without further ado, because they actually just want to do their job properly and get paid for it; a high level of commitment to the company is not present and is also not raised. • Existing subcultures and different groups of employees do not always pull together, like to cultivate their “animosities” and like to “run down” other colleagues or departments. • Most of the measures to change the corporate culture have very many interactions with other activities, which can rather rarely be anticipated. It will therefore be necessary to exercise a high degree of flexibility, to develop frustration tolerance and to live with inadequacies, at least in the initial phase of the culture change process. These factors set narrow limits to the feasibility and planned design of culture change: culture change processes are learning journeys, the joy of new experiences and new successes must be nurtured. Control measures, readjustments, project plan adaptations will become necessary and these should also be tackled in an open, fault-tolerant and constructive climate. It remains important not to let the “know-it-all” fraction, which usually cannot be prevented, get away with the discriminating “we have always said that”. Here, too, the leadership competence of the executives is in great demand.

13.4 Corporate Culture: Between a “Never Ending Story” or “Life Still Offers Many Exciting Moments” Shaping corporate culture is not done with a one-off process – the process will have to be iterated through, because not all culture factors retain their significance over a long period of time. There will be culture factors that will have stability and constancy over time, such as the “trust” factor. However, in a current situation, other factors may take on greater importance and attention. Especially in the age of digital transformation, high flexibility and agility are becoming increasingly important. Changes in business models may shift the whole coordinates of companies, so that new, more significant culture factors will come to the fore without the “old” culture factors losing importance. The plea must

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therefore be to embark on the cultural journey and then to measure progress again and again, to initiate new measures, to check the degree to which objectives have been achieved by means of new cultural audits and to take adjusted measures again. The necessary instruments for this are alive and adaptable. The individual culture model, the culture audit and the anchoring of the results in the maturity model provide a good basis for continually developing this process and also for starting it anew. Of course, the scope and extent of the necessary measures will generally decrease, and “slimmed-down” approaches can then also be considered. It is also important that the individual management levels and functional areas develop their own roadmap; a certain decoupling in the frequency of implementation from the company as a whole may well make sense, since the individual parts of the company operate in different contexts in terms of stability and environmental dynamics. The ultimate responsibility for this process remains with the managers, because part of their management activities must be reserved for working on the system  – as already explained – and they are responsible for this. To reiterate, the bottleneck in the successful implementation of culture change will be management – starting with top management and ending with team leaders. This is where the necessary support, training and coaching should come in.

13.5 Consciously Celebrate Corporate Culture: And Develop Pride The development of the corporate culture is not a trivial event, this should be appreciated again and again and a pride with the achievements in the individual stages should be encouraged. Developing corporate culture will also be an important process of personal development for employees and management. Questioning mindsets, unlearning behaviour and learning new ones are a great challenge for every single employee. Reflection, attentiveness, leaving comfort zones, getting involved in new things, developing a spirit of experimentation will not be easy for many. This makes it all the more important to notice, communicate and also celebrate intermediate stages and the achievement of intermediate goals. Joint development can strengthen the formation of a common identity. If employees are proud of their company and are happy to tell their family and friends about it, this is also the best employer branding a company could wish for. This is then documented, for example, in a real Facebook posting by the IT manager of a medium-sized company, which may be reproduced in Fig. 13.1.

13.6 Key Points 1. Habits need time to develop in order to become firmly anchored and to increase the degree of professionalism through their inherent routine. This process must be nurtured and supported. 2. The cultural development process requires reflection. This is based above all on communication, which must be given a high priority in the context of change processes.

References

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Werner Stremitzer 31 August at 16:02

We are currently looking for an IT employee at Berner Austria a (Junior) IT Expert (m/f) https://jobpool. berner.co at/... /.../onlineapplication_detail. asp... In the course of the job interviews, during the logistics tour, in conversations with potential employees, I always notice what a great company I work for. Here are our company values that inspire and drive me every day https://shop.berner.eu/at-de/unsere-werte b. proud

b. good

b. responsible

b. real

b. hungry

b. connected

Fig. 13.1  Facebook posting

3. Culture changes are learning journeys, openness and constructiveness are their best companions. 4. Perseverance and discipline remain important, but flexibility and agility also require the systematic review of the premises made. The required congruence should be adjusted if necessary. 5. Shaping and developing the corporate culture pose great challenges for employees. This makes it all the more important to acknowledge and celebrate progress along the way, the achievement of intermediate stages and of set goals. Achieving a cultural change should not be taken for granted – motivation will thank you for it.

References Duhigg C (2014) Die Macht der Gewohnheit. Warum wir tun, was wir tun. Piper, München Dweck CS (2017) Mindset. Changing the way you think to fulfil your potential. Robinson, London Gallup (2018) Engagement index Deutschland. https://www.gallup.de/file/245471/Pressemeldung_ Gallup_Engagement_Index_2018.pdf. Accessed 20 Oct 2019

Challenges to Corporate Culture: Today and Tomorrow

14

Abstract

Dynamism, speed of change, globalisation, demographic change, skills shortage, digital transformation, platform economy and artificial intelligence are just a few of the current buzzwords that outline the corporate environment. All of these factors touch on key aspects of corporate culture. Successfully navigating these environments continually poses new challenges to corporate culture, undeniably corporate culture plays an important role in successfully overcoming these challenges. Some of the buzzwords will be brought to life in the following chapter and discussed in terms of their significance for and impact on corporate culture.

We live in a volatile world with immense impact on businesses. The competitive environment is constantly changing, new technologies radically alter markets, but also the companies themselves. Many concepts of traditional management are currently up for grabs. How is leadership developing, what is the significance of demographic change, what impact will advancing automation have on service provision and performance? And above all, how do these phenomena influence corporate culture or, to put it another way, how can corporate culture contribute to successfully managing these changes? How does it unfold its adaptive as well as coordinative function even more extensively in order to ensure sustainable corporate success?

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14.1 What Are the Future Challenges for Corporate Culture? In the last chapter we want to venture an outlook on developments that pose new challenges for corporate culture and its research. Here, there are still some blind spots to be visualized, there is a need for further research, because we still know (too) little to be able to provide proven praxeological assistance. In the following, we outline various developments and formulate them as questions or hypotheses on future challenges in the field of corporate culture. Nevertheless, some attempts at answers should not be missing and should stimulate further discussion.1 1. Corporate culture in networks The classic area of tension in business administration is characterised by the contrast between hierarchy and the market, as the later Nobel Prize winner Coase (1937) already pointed out in the 1930s. Hierarchy means that the production of goods and provision of services is carried out in an organisation that is subject to a hierarchical structure. The contrast to this is the market, where the required products and services are bought in. When is it worthwhile to build up competencies internally in a company, and when should these competencies be purchased on the market? The transaction costs, i.e. the costs of initiation, contract negotiation, procurement and control form the big difference between the two poles of “make” or “buy”. The current trend is increasingly towards the platform economy and “streamlining (lean)” one’s value creation structure. Temporary service providers and products are increasingly being bought on the market. But also cooperations – partly with competitors, under the artificial word “Coopetition” (Cooperation and Competition) are becoming established. These interconnected competences in networks for value creation are becoming more and more important; they also possess and develop a temporary corporate culture. Under which conditions and influencing factors can the respective corporate culture – which promotes or inhibits joint cooperation – be formed and developed? How can different corporate cultures of several partners be integrated into a productive (temporary) corporate culture? Here, too, the individual stages of the process as described in the previous chapters are likely to be quite applicable. In any case, a temporary organisation should also invest time in a desired “individual” corporate culture. 2. Corporate culture for digital leadership and collaboration Another phenomenon that is gaining in importance is the rapidly spreading digitalization of value creation processes, which enables increasingly alocal and asynchronous service provision. Managers sometimes have a wider management span and less personal contact with their employees, who often work increasingly in home offices, for example. The time factor, in the sense of attendance time, as a basis for remuneration thus loses significance. 1

 The first seven trends were discussed by the author in part in Buchinger and Herget (2018).

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Employees also have less personal contact with their colleagues as a result of this new form of so-called “New Work”, and joint attendance times in the office are reduced. How can a productive corporate culture be supported under these conditions? This challenge can also be systematically addressed with the tools presented. The requirements of employees in terms of leadership and collaboration can be mapped by the selected culture factors. The Corona crisis has acted as an accelerator here and has already led to numerous learnings. The approach outlined in this book has proven to be very effective. 3. Corporate culture and digital transformation Digital transformation (Herget 2018) has a direct impact on companies: Organizations are becoming flatter, interdisciplinary project work is becoming more common, communication is taking place digitally, more collaboration is taking place with external partners, fixed job profiles are becoming blurred, long-term working relationships are giving way to fixed-term contracts, continuing education and lifelong learning are becoming the norm, and established structures in groups and departments are losing importance, employees increasingly have to ensure their own employability, security increasingly gives way to insecurity, the ability to plan one’s professional life (and thus also one’s private life) is restricted, the fear of losing one’s job (and thus of a feared social decline) becomes entrenched. Previous habitual security is increasingly dissolved. There are sometimes significant differences in competence between the working generations; the terms “digital immigrants” (for the so-called baby boomers and Generation X) and “digital natives” (for Generation Y and Z) are often used to describe different degrees of familiarity with digital technology. In corporate practice, the debate on digitalization encounters an ambivalent relationship: the market requirements of the company’s future viability on the one hand, and the possible uncertainty and fear among some employees of streamlining, a possible loss of jobs, or the devaluation of previous qualifications and competencies on the other. In this arc of tension, it becomes clear that the digital transformation by no means only has a predominantly technological dimension, but above all emerges as a cultural and social dimension that will determine the acceptance of digitally induced innovations. It is clear that mastering the digital transformation will have an impact on corporate culture: Dealing with complexity, with uncertainty and risk, and thinking in contexts are developing into central factors of successful corporate cultures. The approach in digital transformation projects should naturally fit into the existing corporate culture. Often, this will have to be further developed accordingly in order to have an adequate level of maturity. These conclusions are also confirmed by the results of relevant studies: “The CEO must sensitize employees to the need for change and become the biggest advocate of digitization in the company. Clear communication at eye level with employees can generate understanding and reduce fears. New forms of leadership and collaboration are the logical consequence. In terms of the company, success in digitization is also inextricably linked to a change in corporate culture” (etventure 2017, p. 21).

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4. Corporate culture in increasingly specialized expert organizations The differentiation of job profiles and specialization has been progressing for centuries. Expert cultures represent so-called macrocultures in companies; they have their own paradigms of thought and specialist languages. The best-known macrocultures in almost all companies are those between the “producing” and the “administrative” areas, often referred to as cultures of technicians and business people. As specialization increases, dozens of macro-, sub-, and micro-cultures will become established in large companies. One example: so-called data analysts will increasingly find their way into market research; these, too, will differ in their training and expertise from the traditional market researchers of the past, who in turn will differ from other marketing staff. Despite this further differentiation, it will be an increasingly important task of the corporate culture to focus on what is common and to orient the activities towards this. 5. Corporate culture for globalised companies The increasing globalization worldwide is also reflected more and more in the individual companies. Both within organizations, employees are recruited from different cultural circles with different macro-cultures that shape cooperation, but also the distribution of organizational units across different countries and continents give rise to the emergence of local, regional, national and even intercontinental organizational cultures. Diversity is another aspect that leads to more heterogeneous employees. In order to lead these different corporate cultures to a prosperous coexistence, further concepts for the development of integrating corporate cultures are needed. More macro-, sub- and micro-cultures will emerge side by side, and greater attention will have to be paid to the connecting aspects. 6. Corporate culture in hybrid organizations Currently, new organizational concepts such as sociocracy, self-organization, holocracy (representative of newer concepts Laloux 2015) or also new forms of cooperation are enjoying widespread attention. The hallmark of these concepts is the replacement of hierarchical power authority by new structures and forms – with a major impact on the prevailing corporate culture. Here, too, there is still a great need for research in order to productively accompany the transition, development and control of new organisational forms from a corporate culture perspective. A number of statements were made on this in Chap. 12 in order to approach this phenomenon productively from a corporate culture perspective as well. The importance of peer-to-peer feedback comes to the fore here. 7. The algorithm and the intelligent colleague “robot” and their influence on corporate culture Automation and mechanization continue unabated, but with a significant change: they are no longer just routine operations with unique algorithms. New systems and future “robots”

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have a distinct “cognitive” component based on artificial intelligence technologies. There are different calculations about the impact on jobs in the next years, assuming jobs at risk in the order of 50% (Frey and Osborne 2013) or “only” 9% (Nagl et al. 2017). However, one thing is already a reality: algorithms are already controlling work processes and robots will be part of everyday life in companies in just a few years. Their main distinguishing criterion from humans will be their lack of susceptibility to errors. Many workplaces will undergo a paradigm shift: it will no longer be the algorithm or the robot that assists humans, but humans assisting the system and robots. As robots become more humanoid, this will also lead to a different corporate culture. Here, too, corresponding concepts of corporate culture must be developed on a theoretically sound basis. 8. Generation Z is pushing into the labour market The generation born in 1995 and later is increasingly entering the workforce. However, according to various surveys, this “Generation Z” does not enjoy a particularly good reputation among many HR managers. They are primarily concerned with their personal well-­ being, are not easy to integrate and have little interest in further development within the company. Particularly because of the shortage of skilled workers, this generation has an important role to play in securing future employment and economic development. The integration and potential development of this generation is above all – not surprisingly – also a question of corporate culture. In the following, some tips for good integration will be formulated in order to be able to better cope with this new challenge, which is currently being faced and will be faced in the near future. • Make sense Why does the company exist, what contribution does it make to society through its products and services? What would the world be missing if this company did not exist? Develop stories and tell them, because all too often this is unfortunately forgotten. What exactly motivated the company’s founders to bring it to life? Don’t underestimate the powerful importance of sense-making – and by the way, this also applies to all employees of other generations. Generation Z wants to use their lifetime for something meaningful. • Introduce feedback culture Give – and take – feedback, directly and on the occasion. But not as a mere niggle, but embedded in a constructive (even short) conversation: what behavior was good, what exactly could be improved and especially how. And please, not only hierarchically from “top” to “bottom”, have the courage to demand and accept feedback from “bottom” without justifying yourself and especially between the hierarchies (and departments) – this will trigger one of the biggest waves of innovation in the company.

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Generation Z is used to rating activities and things, just think of the “Likes” on Facebook or the various rating portals. In this behavior there is a powerful optimization potential for processes that have been run in! • Instant gratification Praise immediately when something goes well. Annual appraisal interviews as a central personnel management instrument are passé, but not in the sense of constant individual coaching. Celebrate the successes (and also look for them), a “High 5” (i.e. high-fiving) has an immediate effect, creates solidarity and conveys pride. Generation Z wants to know immediately where they stand. They live more than all previous generations in the “here and now” – all others can learn something from this. • Experimental and agile work Try to work as much as possible with projects and experiments. This means not lengthy planning and phased implementation. Set up a project group that takes on a problem, analyzes it, formulates proposals, and implements some things right away – with quick feedback from those affected, whether internal or external customers. If it works, roll it out, if it doesn’t, just keep trying. Successful companies like Google, Facebook and Apple have been working this way for a long time – with great success, as you can easily see. Not only are they stock market stars, they are also the most sought-after employers. Routine processes and procedures without quick feedback on the measures taken bore Generation Z; they want to tackle, change and see the results immediately. Not burn-out but rather bored-out, i.e. boredom, is likely to become the generation’s bigger problem. They want to get involved, be involved, gain experience and acquire new skills! • Organize work as an event Try to organize many work tasks as projects and events. Mix teams, tasks and roles, create the opportunity for rapid success. Demand creative work  – you will be surprised what positive virus you bring to life. Agile methods, e.g. Kanban and Scrum are ideally suited for this. Clear tasks, sprints, creative and unorthodox approaches lure out the potential of the young generation. • Use Co-working spaces Offer your employees variety in terms of space as well. Rent a space in a co-working space, a technology centre or an innovation lab. Allow your employees to move there for weeks or months and get in touch with other companies in a new environment. For many jobs, this is possible with relatively little effort, since the computer is the central work tool.

14.1  What Are the Future Challenges for Corporate Culture?

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New environments, creative and unconventional spaces and encounters correspond to the attitude to life of Generation Z, who then also like to come back to their own space. Novel solutions for your company, new views and perspectives can be a valuable consequence. • Live the psychological contract In addition to the formal employment contract, the psychological contract is particularly important, because it is unwritten but decisive for whether employees are loyal and motivated. It regulates everything that is unsaid: what are the individual expectations, how were the promises understood and how is their fulfilment experienced? What this means for you in concrete terms is talk to employees about their current status and prospects. Ask what is not going well, where disappointments lie and find constructive ways together so that not only the professional future can continue to succeed. The young employee wants to know exactly where he stands. And whether what he was promised and what he expects will happen! • Use Feelgood Officer This may seem a little strange to many at first, but it pays off in the long run. Do the employees feel good at work, are they even happy? If we are honest, no one has formally taken care of this so far and we have therefore left a lot of potential unused. As the 2006 Nobel Laureate in Economics, Edmund Phelps (2014), said, “95% of personal happiness is determined by the world of work.” We should not leave this to chance, successful companies appoint so-called Happiness Officers who take care of a good working atmosphere, joint activities, inclusion of all employees, developing a common spirit. When employees enjoy going to work (and coming back) the whole company benefits, motivation and mutual support increase, sickness rates and staff turnover decrease. If the company seems too small, someone can be entrusted with this task as a supplement. For the young generation, community is very important. A positively perceived community requires joint activities and, in addition, the integration of life partners and families into some activities, for example, also leads to the development of a stronger identification with the company. The desire for belonging and cohesion is lived! • A new interpretation of work-life balance The so-called work-life balance is often used and also misunderstood. It is not about a strict separation of work and career, there will be more and more mixing – but it should not be to the detriment of employees. Some measures, such as the introduction of home office days, take a lot of stress away from young mothers and fathers and allow more time autonomy and self-determined working. And almost all studies show that employees are also more productive when they are allowed to work from home on some days. Just eliminating

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the commute and the time it takes can bring great relief. Setting up company daycare centers (or nannies) can also contribute to a more stress-free life. The young generation wants more self-determination and autonomy, the greater importance of family and friends results precisely from the experience of their (helicopter) parents, they want to do better. The job is no longer everything and the family and circle of friends do not always come second, as was often experienced with their own parents. Generation Z wants to be different. • Mentors In the next 15 years, about 50% of the workforce will leave the work process – securing experiential knowledge and know-how will become vital for many companies. But not only that, the integration of young employees happens best when older colleagues are placed at their side, with whom one can initially exchange ideas at regular intervals. What are the unwritten laws in the company, how are things going here? So don’t let the employees figure everything out for themselves in a tedious trial-and-error process, unless that’s exactly what they want, but introduce it through an experienced employee. This might be one of the best investments in young employees ever for the company – at the same time all the “older ones” are happy to be able to pass on their accumulated knowledge and also their life experience. There are hardly any better synergies, and several socially competent mentors can be used at the same time: a specialist mentor who is responsible for passing on specialist knowledge, but also a career mentor who promotes settling in and advancement within the company. Generation Z strives for stability and orientation. Experienced employees can provide an excellent role model here. They act as a coach and represent a valuable companion on the path to developing their own potential. In this way, the seniority principle can be lived in a new collegial way and valuable, unwritten knowledge can be passed on. At the same time, this increases loyalty to the company. In any case, corporate culture can contribute a great deal to the integration of this Generation Z.

14.2 Key Points 1. The corporate culture must also be further developed and lived beyond the individual company framework, increasingly in temporary partnerships with external partners. 2. Digital leadership is increasingly replacing personal contact. This vacuum must be filled by appropriate compensatory measures. 3. Digital transformation requires new competencies to deal with complexity and uncertainty. The communication of overall contexts and an experimental way of working are becoming more important.

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4. Globalization and diversity lead to increased macro, sub and micro cultures in companies. It is important to integrate these and to focus more strongly on a common orientation. 5. Increasing democratisation and partnership-based participation in corporate development processes mean that participation, empowerment and peer-to-peer feedback are becoming important aspects of corporate cultures. 6. The algorithm and the robot will increasingly change the self-image of many employees. Humans will no longer always be at the center, but will often become the vicarious agents of systems and machines. This new interaction must be well-considered and culturally accompanied. 7. Generation Z will permanently change the world of work. These changes can contribute to the positive for all employees. The lived corporate culture will become even more important for this generation.

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