Culture, leadership, and power: the keys to organizational change - includes bibliography

Business Horizons, Jan-Feb, 1994 by Ronald W. Clement

General Motors, IBM, and Sears: three companies facing a need for dramatic change that have already tried, but failed, at major change efforts. Judging from what I've read about these three companies in the business press recently, I'm inclined to believe they are unaware of the current ideas on organizational change--including the successful efforts of many large corporations---that have been appearing in the change literature.

The most important idea of all for companies like GM, IBM, and Sears is that those pushing for organizational improvement--whether they are external members of the board, major investors, or top executives--must deal with cultural and behavioral obstacles to change. Specifically, attempts at organizational change must consider three key features of organizational life: the firm's culture, the leadership of the change effort, and the existing network of power.

In this article, I discuss first the importance of dealing with organizational culture. My key point here is that rather than changing culture directly, management must work with and through the existing culture to transform the organization. Whether the culture itself changes is secondary; the important objective is to improve the company.

The role of leadership in organizational change is my second key topic. Here I build on the discussion of organizational culture to reveal (1) the role of leadership in dealing with culture and (2) the form that leadership needs to take. For example, based on recent research we know that top management--and not some team of consultants--must lead the change effort. We also recognize certain key leadership actions that can help those efforts succeed.

Third, I discuss the need to consider organizational power (and the related topic of politics) in organizational change efforts. This topic, largely ignored in the literature until recently, is now recognized as central to any organizational improvement effort. Goals are accomplished in organizations largely through the use of power and politics, so it seems fairly obvious that changing an organization also requires their intelligent use. I close the article with a summary of the key implications for top managers trying to improve their organizations.

CHANGING ORGANIZATIONS: THE ROLE OF ORGANIZATIONAL CULTURE

Organizational culture was the hot topic of the management literature of the 1980s. New techniques for assessing and changing culture appeared in the organization development (OD) field, and a wide range of consultants on culture appeared almost overnight (some promising to change a firm's culture almost as fast). A great deal of research on culture was performed some to determine exactly what it was, some to find out how to measure and change it. The good news is that we have learned a lot about what culture is; we now have some good instruments for measuring it. The bad news--and the harsh reality--is that we have also learned that it cannot be changed easily or quickly.

Before going further, I will posit an explanation of "organizational culture." I rely on Edgar Schein's (1985) widely accepted definition, which identifies three levels of cultural phenomena: basic assumptions, values, and artifacts. Basic assumptions are the circumstances taken for granted in an organization as the "correct" way of doing things. They lie at the deepest level of culture and are the hardest to change. One basic assumption Schein found in an engineering firm dealt with decision making: the individual employee was valued as the key source of ideas, but the ideas still had to be assessed by the employee's work group--all relevant parties--before they were accepted.

The values of the firm are at the next higher level of culture, according to Schein. These refer to a sense of what "ought" to be. An example of a value might be the belief that on-the-job experience is the best form of training. Given this value, and assuming employees successfully learn their jobs this way, there would be little reliance on structured training programs.

At the most superficial level, artifacts are the overt behaviors and other physical manifestations of culture. They can usually be observed directly and are easier to change than assumptions and values. Artifacts include, among other things, procedures followed, technology used, and ways of communicating. Unfortunately, changing the artifacts generally does not yield a change of culture. To do that, one must eventually reach the values and (preferably) the basic assumptions.

Given this definition of organizational culture, let me now summarize the conclusions I have drawn from my own experience (and my review of the literature) on this topic. We can measure culture; therefore we can identify and understand any one organization's unique culture. Being able to measure culture, however, does not mean we can change it quickly as a prelude to transforming and improving the organization. We must learn about a company's existing culture--identify and understand it--to bring about any real change. I discuss each of these points in greater detail below.