Leading Culture Change in Global Organizations

Either you manage the culture, or it manages you (Edgar Schein, 1999).

There is a popular saying that culture eats strategy for lunch. And this statement aptly summarizes the power of culture for any organization and also points out why culture cannot be ignored. Culture is a powerful tool for leading and managing change for two reasons. One if properly managed, culture can be a great facilitator of change. Second, if culture is not properly understood and aligned with proposed change, then the change itself may backfire. Since 1980s when the focus on culture started, there are plenty of books written on organizational culture. However, there is hardly any book available which illustrates the power of culture as a tool for organization change. It is precisely this gap which has been filled by this book. Authors have systematically tracked what works and what does not while implementing a successful change in global organizations. The book is divided into eight chapters and each Chapter is based on a case study representing successful implementation of change captured in a before‐after survey result mode.

Chapter 1 focuses on role of culture in building a high performance organization. Based on two decades of research, Denison (1990) has created a tool or model, Culture Survey, which attempts to link four dimensions of culture with organizational performance. Like any contemporary model of organization studies, this model focuses on set of dynamic contradictions or tensions that must be managed (Denison et al., 1995). The model has four dimensions: mission, adaptability, involvement and consistency. These dimensions represent tradeoffs between stability and flexibility and between internal and external focus. Authors have used this model in seven case studies to study the changes these organizations made, and tried to understand that those changes had on business and culture.

In any organization – be it service or product; government or non – government, action happens at the frontline. Critical mass exists at frontline. Creating a system that supports the front line makes all the difference in implementing change, argue authors of the book in Chapter 2. Domino's Pizza case study is used to highlight the empowerment of frontline for successful implementation of change, transforming a one pizza delivery shop into one of the world's top brands with 6,000 stores and over $ 5 billion as revenues. Cornerstone of this success story has been by creating a competitive advantage through people with relentless focus on improving the capabilities and work environment for frontline employees.

A strategy without execution has no meaning. Without careful attention to aligning people, the strategy is just a plan, is emphasis of Chapter 3. Creating strategic alignment is the key to successful implementation of strategy. Formulating a business strategy is very different from implementing a business strategy (Kaplan and Norton, 2008). Formulation can occur primarily at the top of organizations, but implementation can work only when alignment is achieved across levels, geographies, functions, product lines and supply chain. Case studies of Deutsche Tech and Swiss Re are used to explain how alignment was achieved for the successful implementation of change.

In Chapter 4, the focus is on creating “One Org Thinking” or “Enterprise Thinking”, which refers to the mindset that allows people to act on behalf of the organization as a whole, rather than representing just one part of it. Creating an Enterprise Thinking at global level is a big challenge (Yip and Bink, 2007). And this challenge becomes even bigger in the case of mergers and acquisitions. When mergers throw in a new combination of technologies, new ownership and governance structures, and a different leadership style and history, then the Holy Grail of synergy becomes harder and harder to attain. This chapter examines these issues by focusing on the efforts of a Scandinavian financial services firm as they struggled to integrate three strong cultures into one company.

Any organization which aspires to be a Global organization faces a basic dilemma of how to export the spirit, the essence, and the principles that form the foundation of a successful organization to a new context without imposing home country habits to a new setting. Chapter 5 underlies a perspective that implies that transforming a global organization requires successful change in one part of the organization to be “exported” to the other parts of the firm and then integrated into the local context. So all change is first local, and then multi‐local, long before it becomes global. So how can an organization make a local change as a global one and that too successfully? Transformation of a North America based automotive company, which successfully “exported” culture to Europe, is explained in this Chapter to focus on issues related to exporting of culture change.

As the markets in developed countries reach a level of maturity, established corporations enter emerging markets like China, India or Brazil for next level of growth. Primary reasons for entry are to meet the demand for their goods/services or to take benefit of low cost of production/service. Chapter 6 explores the complexities involved in managing the cultural change associated with established firm's decision to enter the emerging markets. The process starts with developing sales and marketing capabilities and production operations. This part of the process is easy. Challenge starts from this point to the point when the local operation plays a key role in implementing an integrated global strategy. GE Healthcare's case study of building their Chinese business from a base near Shanghai is used to explore the issues faced in building a global business in an emerging market.

In the recent past, many companies from emerging markets have increased their footprint by acquiring established multinationals in developed markets, for example, Lenovo acquiring IBM. Boston Consulting Group (BCG) observed this trend and started publishing a “Global Challengers” list (Aguiar et al., 2006). According to BCG, a successful Global Challenger needs to have some characteristics like being successful at home; having deep financial pockets; a clear vision and a visionary CEO. How do emerging market companies grow into Global Challengers? What it requires to become a successful Global Challenger? Chapter 7 attempts to answer these questions of becoming a Global Challenger with the help of case study of Brazilian iron Ore Company called Vale. According to authors, becoming a successful Global Challenger requires adaptation of the organization's culture to a global environment and a global role. They may have all the systems and processes in place to execute strategy, but if they are not quick to learn and adapt their culture, then they are unlikely to succeed.

Finally in Chapter 8, authors propose a framework for leading culture change based on their decades of research and case studies featured in the book. Habits, rituals and routines are the bedrock of any organization's culture as these are embedded little deeper. Elsewhere in literature emphasis on habits, rituals, and routines has been much less on managing and leading culture change perspectives. Framework proposed by authors is 2 × 2 matrix based on habits, rituals and routines. Habits, routines and rituals link knowledge to action. For a culture change, this connection cannot be ignored. Intuitively framework is simple, but powerful.

In summary, this book is the most recent one on organization culture studies but focusing with a special emphasis on managing and leading change. Authors, particularly Denison has decades of research and practical experience in the culture studies and a book by him always brings out new perspectives. Best part of the book is that authors have used case studies tracked by them to explain the process of leading and managing culture change and each chapter and case study is full lessons learnt. This experienced based compilation is full of wisdom for practitioners of change and organizational development (OD) and students of behavioral sciences or OD looking for practical insights. Book does not offer much for researchers studying culture change except that it lays out a structured approach for pursuing a culture change study.