5. Measuring Cultural Action

SCENE: Mid-October. Alex’s office. Calvin, Florence, Elin, and Alex are talking enthusiastically.

ALEX: Calvin, that’s an amazing photo! I can’t wait to show it to Katz.

[Katz knocks and enters.]

We were just talking about you. Or rather, talking about some of the authentic informal leaders and some of the great things they’re up to.

KATZ: I’m sure they are much more interesting than I am! Certainly, they have a lot more wisdom about Intrepid. Tell me what you’re all talking about—I can tell I walked in at the good part.

CALVIN: Well, just as you suggested, we found and launched some initial groups of our best authentic informal leaders and started to convene them on a regular basis: first to come up with behaviors and then to identify some areas of the business where these behaviors would make a real difference to results. It was a little counterintuitive at first, but it turned out to be easier than anticipated.

KATZ: Terrific. How have those sessions been?

FLORENCE: They’ve been “rollicking” discussions, to use one of your favorite words. The more cross-functional the group, the more energetic the discussions and ideas. One of the best sessions so far was with a handful of frontline store employees, some people from marketing, and someone from my supply chain team.

KATZ: Have you taken the behaviors back to the leadership team? And how difficult was it to align them on the critical few?

ALEX: We had a leadership team meeting in early July where we moved from about a dozen behaviors down to three: those are—[Pulls out a sheet of paper and hands it to Katz]

KATZ: [Reading aloud] “Where processes don’t work, focus on fixing them or making them more flexible.

“Respond to what the customers want, based on both quantitative analysis and what we can see and feel.

“Communicate openly; prioritize transparency over a ‘need to know’ approach.”

These are great, really granular and specific. [Calvin, Elin, and Florence exchange looks of satisfaction.] I could imagine having a conversation with a colleague where I commended her for doing one of these well, or held her accountable for not doing enough of it. More im por tantly, I can see how more people doing more of these more of the time could really move the needle for Intrepid. How difficult was it to line up the leadership team on them—and how are you encouraging them, at that level? From what you told me in our first meeting, Alex, I can imagine that the last one especially, about open communication, has gotten a lot of attention. [The team members look to Alex to speak, but he gestures to Elin.]

ELIN: I’ve asked the leaders to all make personal commitments to hold each other accountable for these behaviors. Once a month, in the leadership team meeting, we ask each leader to arrive with at least two specific examples—one where they have acted on a behavior and another where they’ve observed a behavior in action. We’ve opened each meeting by sharing these—it’s been a good way to keep this culture dialogue alive and moving, through real specifics.

KATZ: That’s a terrific example. And closer to the front line? I’m imagining that’s what the great story is that I interrupted by walking in.

[They all laugh.]

FLORENCE: How did you know that, Katz?

KATZ: Because the most interesting and varied examples of how behaviors are changing are almost always down in the trenches where the real work gets done. So, what’s happening in the trenches at Intrepid? calvin: Well, we’ve brought back the green initiative, and this time we asked stores to opt in, rather than mandating it for everyone.

KATZ: [Looking at Alex] I think you’ve gone down this road before? With a green initiative?

FLORENCE: If you’ll excuse me—I know what you’re thinking, Katz. This isn’t something top-down at all, like Toby’s campaign. The idea came from frontline employees who had been—per our behaviors—listening to what the customers had to say. Customers had mentioned that a company’s footprint influenced their buying decisions. So we’ve given stores that are interested the leeway to come up with and implement their own initiatives, and it’s developed into a contest.

KATZ: So what’s the great story?

CALVIN: One of our stores set up a table next to the checkout with scissors and a recycling bin, so customers can undo the packaging on their purchases for us to recycle. A few customers asked offhand questions like “What does this actually do?” and “What can you actually recycle this packaging into?” so one of the store associates set up a weigh station in the back of the store, then put up a large poster board showing how many pounds of packaging the store has recycled each week, as well as pictures of the things that could be made with the cast-offs. The poster gets updated each week, and some of the pictures have been pretty hilarious. [Turns his phone toward Katz] Here’s the one that had us all laughing.

KATZ: Who are those guys?

CALVIN: The store manager, Jess, and a customer, Callen— they mummified each other in bubble wrap!

KATZ: That’s a great picture—and a really good story. calvin: It’s even better. The store now recycles about three times as much stuff as the average store. The employees in the back, even out of the customers’ eyes, have become more conscious about whether packing materials end up in recycling or trash. And Jess, who was initially skeptical about the idea, has been thrilled with the community response and high customer engagement. She’s going to take the idea to the summit next month for all the managers in her region; we’re helping her with her presentation—that’s why she sent this photo. Callen, the customer, is really involved in recycling initiatives in the community, so he shared a lot of ideas too. Ideally the regional leadership could then help the idea spread all across the company. We’ll see. [Looks at his watch] Actually, we’re checking in with her in a few. We should go. Great to see you, Katz.

[Everyone leaves except Alex and Katz.]

KATZ: Seems like a lot of good news and positive energy. How is business overall? And of course, I’m curious about the rumors we discussed on my last visit. I’ve been watching the news, and things still seem to be quiet on that front.

ALEX: I’m glad we have a chance to talk in private. I’ve been meaning to give you a call and fill you in. I sat down with the CEO of the startup, then went on a walk through their offices. The short version of the story is, I could just feel in my bones that this would not have been a culture fit. They are innovative and fast moving, and we’d love to bring those qualities into Intrepid. But they were also throwing money around—and a little full of themselves. I could not see our leadership team tolerating that. For now, it seems, Intrepid will stay the course as its own company.

KATZ: You must be relieved—and a little let down.

ALEX: Yes, that’s right, a little of both. This whole emotional piece of leadership—it’s complicated! It was a lot easier to just make rational decisions and not actually talk about how people feel about them. [They both laugh.]

KATZ: [Smiling] So now you’re talking about emotions. I’m going to hazard a guess: you took my advice and you’ve been listening to your AILs.

ALEX: You guessed right. This initiative has been all about emotional energy. It’s amazing how, when you try to get really precise and specific about intangible things like how people behave, you can unleash such a strong emotional response.

KATZ: Tell me more.

ALEX: Well, this green initiative of course is a great demonstration of the positive side of it. It’s an idea that came out of regular meetings of our best authentic informal leaders, and the fact that it’s actually taking flight is a huge source of pride for that group and a huge motivator to come up with even more new ideas. And we seem to be experiencing a slight uptick in overall profitability based mainly on reducing some costs; we need more time to get accurate data, but I suspect that running the stores in a greener way has a real benefit to the bottom line, as well as to consumer satisfaction and employee motivation.

KATZ: You should absolutely get that data. There is nothing like moving from “suspect” to “believe” to really give an initiative energy. People love to see that their actions are having impact and that that impact is good for the company’s bottom line. And leaders, of course, are far more likely to keep supporting it over time.

ALEX: Great idea. [Jots down a note] There’s a darker side to this, too. Once you give people a chance to open up, you have to really be willing to hear all their frustrations as well.

KATZ: Naturally. What is it that surprises you about what you’re hearing? What are the sources of anger, sadness, and frustration in this company?

ALEX: I’m not sure it actually surprised me, but people at all levels of the business are well aware of how precarious the retail business is and what a threat this represents to Intrepid—today and in the future. Even with the recent gains, we are going to have to close some stores and lay off some good people—there is no way around it. As painful as that is, we’ve put it in motion.

KATZ: There are ways to put those kind of cost-containment efforts in motion that can respect people’s emotions and help them get on board—it’s worth a longer conversation. Layoffs and bad news don’t mean you don’t focus on culture—in fact, they mean that it’s even more important to understand what motivates people even in tough times.

ALEX: Also, we did another employee survey, which was disappointing as well. Forty-eight percent of respondents believe that the changes implemented by senior managers do not seriously consider input from lower-level employees. The top reason people resist change, according to the survey, is that they don’t understand the change that they’re asked to make and therefore can’t support it. The positive message I take from that is that at least people are aware of some of the barriers, so we can begin to address them.

KATZ: It still sounds like more good news than bad, right?

ALEX: I hope so. But I bet that if you asked people, they’d say we’re only improving things around the edges. We haven’t really shown how all of this will result in us becoming a really different kind of retail merchant.

KATZ: Well, this is where the measurement piece is going to be absolutely crucial. There is no better way of encouraging momentum than showing people that things are already changing. It’s more impactful to show significant change in a small subpopulation than to show a small change across the whole organization. Cultural evolution takes time, and when folks see that a small group has already reaped significant benefit, they become hopeful that their turn will come and are interested in being the next guinea pig.

ALEX: So you’re saying I should focus on measuring change at the stores that have opted into the green initiative.

KATZ: Spot on. Think about that story Calvin just told me. Coming up with the idea for that initiative—and that poster board—took initiative, creativity, and passion. And they have already come up with a metric—the weekly weigh-in of pounds of materials recycled in each store. I suspect they could come up with a few others— a simple one like per-store sales and maybe something else, like how likely a new customer is to return. What’s important isn’t that you find a perfect metric but that you stick with it consistently and encourage other stores to adopt it and do the same. I suggest you’ll all find much to be encouraged about.

ALEX: That makes sense. Make the effort to connect this successful experiment to something broader.

KATZ: Exactly. Evolution is not a one-step process but an ongoing one. Elin’s impulse to hold the leadership team mutually accountable for behavior change? Institutionalize it. Keep it on the agenda at the leadership team, and then encourage each member to implement it with direct reports, as well. Stories like the one I just heard? Keep sharing them. Those metrics from the green initiative pilot, like weighing the trash and recycling at the end of each week? Make them ongoing key performance indicators. And just keep looking.

ALEX: This really is a never-ending undertaking.

KATZ: Yes. As long as you’re CEO, you’ll never take your hand off the tiller of strategy and operations. You will need to stay responsive to the competition, to market shifts. Culture is just as dynamic and just as important. It’s something you can’t change overnight. But you can shape, align, and steer it—today, tomorrow, and for the long haul.

ALEX: I get that now. And I’m glad I have you to give me advice on this.

KATZ: I’m flattered, but you’re wrong. I can tell, just by walking in the room today, that you’re doing what you need to do—building an active council of foot soldiers who are on this journey with you.

THE IMPORTANCE OF MEASUREMENT

We hear two questions over and over from leaders as they digest and respond to the theory of the critical few. The first is, “How do I actually get people to act differently?” And the second is, “How will I know if my culture is improving?”

The answers to these questions are deeply intertwined. Helping your culture evolve is indeed possible. A culture evolution program does not consist of just talking and listening—once you identify the critical few traits, behaviors, and people, there are tangible actions that can shift a culture toward better alignment with your organization’s purpose. One of the central messages of this book is that cultural situations evolve slowly over time. You can’t point your finger and mandate behavior change. But you can intervene to create the conditions that make the right behaviors emerge. That’s why we use the word intervention throughout this chapter as a broad term for any deliberate act that an organization undertakes to explain, encourage, reinforce, or reward critical behaviors. You’re looking to surround your people with a coherent system of “enablers,” some formal and some informal, that all, taken together, suggest a new path.

Interventions can take many forms, and this chapter outlines some ideas for how to design ones that will work for you and your people. The most effective interventions have three characteristics. First, they evolve out of the critical few behaviors discussions, and therefore they are, innately and by design, coherent with the overall message about how the desired behaviors will support the business. Second, they track and measure the tangible impact of putting the new behaviors into action—and, ideally, even attach these new ways of behaving to “hard” business results. Third, they appeal to the minds and hearts of those impacted.

Just as AILs are distinct from cultural ambassadors and change champions, behavior interventions are distinct from the top-down communications programs that accompany traditional transformation programs—the type that tend to result in colorful posters and wallet cards. Clear, top-down communications have a useful function in any organizational transformation. When well executed with clarity, consistency, and emotional commitment, communications send a strong message about future direction, expectations for people, and support from and alignment at the top. Communications alone are unlikely, however, to actually change the way that people work together. Katz likes to tell leaders, “I’m not worried about what you will say; I know you’ll say all the right things. I’m more interested in what you will do.” To move from a communications-led transformation to a true culture-led, behavior-focused transformation demands an approach that requires much more active engagement from people than simply downloading the latest FAQ. Interventions, when well designed, aim for the front line, where work gets done. They rewire how people work together day to day.

In this area, as in the area of selecting traits, behaviors, and informal leaders, the key to interventions and measurement is to focus on a critical few. You select a few targeted areas of your organization where a shift toward the identified behaviors—more people doing more of them more of the time—is most likely to have a tangible impact that can be seen and felt in a manner that helps people rally behind your cause. Working with your AILs, you codesign interventions that will help embed and reinforce the behaviors. Specific ideas will bubble up, as in, “Hey, we could all do more of behavior X by setting up a work group and meeting once a week to share ideas.” We call these ideas “mechanisms” or “spreading mechanisms”—tangible ways that the behaviors can be put into practice. And you both measure and celebrate achievements often as you go, creating a self-perpetuating loop of reinforcement.

The only way to keep the momentum is for progress to be both made visible and acknowledged—it encourages and inspires others, and thus the critical behaviors are rewarded and repeated. To put it simply, this is why churches track funds raised for the church fair with plywood thermometers on the lawn and why online fundraising campaigns show progress toward a goal on their home page. It is encouraging simply to see progress, and that encouragement then helps the behaviors be repeated.

Why not start with your whole organization at once? Alternatively, why not begin with the leaders and then work your way down the organization layer by layer? Early interventions provide valuable learnings on what works well for your organization and highlight where appropriate customization will be useful. Top-down cascades, by definition, fail to solicit frontline input early on, so they miss the opportunity for energy and ideas from lower levels.

Furthermore, if you try to take on whole layers of the organization at once, you rely on everyone in that layer to be ready and willing at the exact same moment—a tall order! It’s much easier to join forces with a few top executives who are excited to champion the cause, rope in a couple of managers who are similarly energized by driving behavioral change, and invite AILs who already exemplify the chosen critical behaviors. Just by pulling this group together, you’re already halfway there. You are leveraging hierarchy and organizational support, involving middle management, and engaging the front line—all at the same time. You’re focusing not on what’s broken in your culture but on the pockets of positive energy—encouraging them to replicate and thrive. You can get to tangible results quickly and send a strong message to the organization that purposeful alignment of culture and strategy is of benefit to the whole enterprise.

This, of course, has to be seen to be believed—and so the rest of this chapter is dedicated to sharing ideas we’ve learned from our research and experience, using examples of organizations that have seen impressive results. The examples vary, but they have common themes. Leaders and AILs worked together to develop practical, let’s-start-tomorrow ways of weaving new behaviors into the fabric of how work got done in their company. They conducted “pilots,” a term we’ll use throughout this chapter.

Pilots are deliberate experiments with new behaviors, real-time laboratories designed to highlight and acknowledge new ways of acting and attach these actions to measurable results. Pilots begin at a small scale and then, if effective, scale into broader programs or reforms. Pilot results demonstrate impact, build momentum, and serve as a proof of concept that this “soft stuff” really works. This chapter describes several examples from our work—pilot programs that were thoughtfully constructed, designed to attach the organization’s “critical few” behaviors to meaningful results for the organization’s business. In each of these examples, the set of metrics that moved—the scorecard for each of these efforts, in other words—was cocreated by the culture program leaders and the participants themselves. This cocreation has motivational benefits because people are far more energized by metrics that they have helped develop. And in each example, the scorecard is unique to that organization and its specific context.

We mention this here to forecast what might be a disappointment as you get to the end of the chapter: you will not find a “universal scorecard” exhibit that we have applied at one thousand other companies that you can pull out and use for your own organization. Hopefully, however, by the time you reach the conclusion of this chapter, you’ll be persuaded by what’s become vividly clear to us as we’ve explored these ideas through real client situations: the best way to make a real difference in your culture is by focusing on your own company’s critical few behaviors, engaging your organization’s authentic informal leaders, and developing your own company’s specific, measurable approach to intervention. This is the secret to real, lasting culture evolution.

ASPIRATIONAL AND MEASURABLE GOALS

In 1987, Alcoa, the Aluminum Company of America, hired a new CEO, Paul O’Neill. O’Neill opened his first meeting with analysts and investors with a bold declaration: he would make worker safety his highest priority. Although analysts thought this was a bad decision and advised their clients to sell, O’Neill proved them all wrong. By the end of O’Neill’s first year at the helm, profits at Alcoa had reached a record high, and by the end of his thirteen-year tenure, the company’s performance had exceeded all expectations. And true to his promise, Alcoa became one of the safest companies in the world.

The transformation of Alcoa under O’Neill is a popular tale because it illustrates many appealing, counterintuitive points about management and leadership. It’s an excellent example, of course, of how compassionate, employee- focused leadership can drive financial performance. Lives were saved, as well as dollars. When Katz conducted research at General Motors in the early 1990s, one plant manager credited O’Neill’s safety notion with his entire plant turnaround simply because it gave him a tangible way to demonstrate to workers that he cared for them on a basic, human level. It’s also a good keystone behavior story and is cited as such in The Power of Habit by Charles Duhigg. O’Neill, Duhigg writes, believed that some habits have the power to “start a chain reaction, changing other habits as they move through an organization.”

The Alcoa safety example also illustrates how effective it can be to catalyze a comprehensive transformation through relentless focus on one aspirational, internal, measurable goal. Consider how different the goal “eliminate worker injury” is from more common organization-wide CEO mandates, like “beat competitors” or “be the best in the business.” As opposed to these more general goals, “eliminate worker injury” demands that every single person in the business think consciously about how his or her own behaviors contribute. In this manner, it reminds us of one of our comprehensive culture evolution programs, conducted a handful of years ago at a technology client. The technology company was in the midst of a large-scale transformation. Our work focused on selecting critical behaviors and identifying and mobilizing a global cadre of authentic informal leaders. It also involved a deep-dive effort to focus on the customer experience and quality in one specific area: the quality of lap-tops within the personal computer business.

The company’s leadership team had chosen to narrow in on laptop quality for its symbolic value. Internally and externally, it had been a red flag for several years running. Consumers complained about breakage and design flaws, both directly to customer service and in online forums. They sent back their laptops and demanded new ones—fair practice under the warranties and also very costly for the company. Analysis along the whole value chain of each laptop’s development revealed many potential areas for improvement, such as product development processes and supplier management. Metrics related to these gap areas were limited. From the outside, it was difficult to dive in and see how to make a difference. Even where metrics were available, they were lagging instead of leading indicators and did not connect to performance ratings. In addition to these formal issues, the team discovered several informal areas for improvement, including poor communication across silos and insufficient working norms and behaviors. For example, people tended to create paperwork reporting on the issue instead of fixing problems.

Working with the business area leaders, the culture leadership established a comprehensive improvement program, including the traditional guardrails: redesigned metrics and incentives, improved development and handover processes. These guardrails were codesigned with the AILs in intense, hands-on, facilitated work sessions. These sessions also served as opportunities for the AILs to discuss and react to the critical behaviors and to talk about how these could or should be put into action to drive quality. At one point, to synthesize the ideas the AILs had offered, a facilitator drew an ideal new value chain on the whiteboard. The room went quiet. The facilitator paused the session and called attention to the discernible drop in energy and enthusiasm. She asked, “What, if anything, is stopping you today from putting these behaviors and this value chain into practice tomorrow?”

One manager raised his hand. “It’s all well and good to look at the whole value chain,” he said. “But the only thing I’m measured on is time to ship.” It was a pin-drop moment: the truth had been spoken. The leaders had not discovered this incentive misalignment through their top-down gap analysis—it took someone who worked near the front line and handled the laptops every day to see and diagnose the problem. If the only metric that anyone paid attention to incentivized frontline workers to toss laptops into boxes in any condition, how and why would anyone focus on quality and the condition of the product in addition to speed of production?

But this isn’t a simple story about how one tiny misaligned incentive can lead to dramatic unforeseen consequences, like the proverbial missing nail in the horse’s shoe. This was a watershed in the company’s overall culture evolution. The misalignment between the existing incentive and the goal of improving quality that the manager’s comment brought to light was, of course, corrected. In addition, the entire set of metrics across the life cycle of products was redesigned. Prior to this program, every employee was, to some degree, measured on return rates that seemed both vague and after the fact. In other words, the metrics were not granular enough for any individual person to see that his or her own work had an impact on them; furthermore, the metrics all lagged, meaning they were tallied too late for any adjustments to be made in real time to alter them. Our overall effort involved establishing a much larger set of metrics that were designed to drive individual accountability in specific areas and balanced the leading and lagging indicators.

Without the culture program, this manager and other AILs would not have ever been in a forum that encouraged them to speak their mind so frankly. (And just as likely, the leaders would not have been primed to listen to it—and act on it.) The issue would have stayed under the radar of management, and as such would have contributed to foment skepticism at the front line relative to whether leaders were taking “quality” seriously. All the traditional, formal ways of trying to fix the quality program would likely have come up short.

Further, the AILs in the room who witnessed this moment and then saw leaders follow through and change the incentive experienced a powerful realignment of their expectations around leadership. They realized that their opinions mattered and their voices would be heard. They repeated the story outside the room. The story merged with and amplified a broader conversation taking place across the company about how things were different, things were improving. This small incident mattered because it took place as part of a larger movement and was consistent with that movement, was indeed representative of what the movement overall was trying to accomplish. Through repetition, the meaning of the story was reinforced. It acquired powerful emotional impact.

Within months, more than one thousand engineers had gone through quality behavior workshops. In addition, new metrics were introduced to evaluate the readiness of a product to move from one development phase to the next. Through these metrics, several hundred managers and frontline employees were now accountable for highly granular quality performance data. And crucially, they understood the behaviors required of them, as individuals and teams, to help them meet these marks and viewed this as a piece with the broader effect to transform the company.

Senior leaders also played a part: In both their day-to-day decision-making and their broader communications, they became much more explicit and direct about quality as a priority. The senior vice president of supply chain management set aside a full day each month for video conferences with all the suppliers and manufacturing partners to review Excel files detailing any issues with each product and resolve them line by line—a powerful symbolic act that demonstrated to both internal employees and external partners that the senior leadership was dedicated to problem solving and getting to the bottom of issues. Holding back a product to fix quality issues became an action to be proud of, not something for which to be blamed. And product managers loved it when their products were taken apart and examined—their work became a source of pride. Not surprisingly, the bottom-line result was an 8 percent improvement in warranty cost in year one of implementing the program, saving the company close to $100 million.

Another valuable point about interventions and measurement emerges from this example. Previous examples demonstrated how leadership’s focus on a single metric— worker safety in Alcoa’s case, laptop quality in the case of the tech company—can provide a focus and goal for a culture effort, catalyzing, as Duhigg notes, a “chain reaction” of further improvements. It’s also worth pointing out, however, that the culture evolution team at the technology company did not focus solely on quality improvement—it was an aspirational metric that they hoped to see move, but it was also part of a broader ecosystem, a comprehensive program in which many elements overlapped and reinforced one another. Leaders walked the floor and openly acknowledged employees who demonstrated new behaviors. Some of these elements could, of course, not be measured. But some elements—such as the gradual increase in volunteer participants in the pride-builder program and the numbers of people who showed up for town halls—could be, and were, measured along the way. The overall approach taken at the technology company placed a premium on measurement, and this helped leaders constantly reinforce the core messages, track projects, and encourage forward momentum across the enterprise.

PILOTS: BRINGING BEHAVIORS INTO THE BUSINESS

Choosing the business issue or aspirational metric on which you will focus your interventions is important. It’s also crucial to choose the area in your business—be it a department, facility, or function—that would be most opportune for the first pilots.

A combination of factors should play a role in this decision. You want to show the rest of the organization that when more people exhibit more of the critical few behaviors more of the time, good things happen—for them and for the organization’s performance. So, start by looking for those executive and department leaders who support you, who are clearly energized by the topic of behavior-led transformation. Then, from this group, filter down to those who lead a manageable, midrange area of the business. If your initial group is too large or complex, it might be difficult to tackle right away. It also might take much longer to generate results. Small groups or very specialized groups also aren’t ideal, though, because even groundbreaking results might not be recognized as applicable to the rest of the organization. And finally, filter out those groups that are dealing with a heavy burden. Trying to institutionalize a new set of behaviors in a refinery that’s knee-deep in an ongoing maintenance turnaround is next to impossible. Similarly, avoid an IT function in the months running up to a major systems launch or a customer call center just as a major new product or promotion is being prepared for release.

Certainly, all these situations would benefit from more people acting out the critical few behaviors. (And be prepared—someone who owns one of these problems might argue vociferously for the special attention of being in the pilot because he or she wants to achieve a particular goal.) But in choosing one of them, you will risk not having the full attention of management and employees in that area because they will be more focused on their immediate goal than on the longer-term work of evolving behaviors. Also, if that group makes a huge leap in performance while focusing on behaviors, your results will be clouded by the other changes related to the ongoing process improvement. Think like a scientist conducting an experiment when selecting your pilot area: you want to be able to pinpoint areas of improvement and have it be crystal clear that implementation of the behaviors has made a difference. These areas will be the origins of the data you boast about, the stories that get told over and over—the formal and informal ways that anything gets rewarded.

But what if your entire organization is undergoing transformation—does that mean that the critical few approach can’t work? Quite the contrary. If you are conducting an across-the-board transformation of your organization (or even a broad department within your organization), a critical few effort can be a powerful accelerant. Positive results and win stories travel quickly and can lead more people to jump on board.

An excellent illustration of this is the culture evolution we recently supported at a global agrochemical and agricultural biotech organization. The head of supply chain was leading an organization-wide manufacturing transformation, identifying areas of process improvement and applying lean manufacturing principles across all the production facilities. Wisely, he recognized that a real transformation required not only a comprehensive approach that included process improvements and lean practices but behavior changes as well. In our work, we focused on understanding each site’s culture and the leadership behaviors required to support, enable, and drive these manufacturing aspirations. We facilitated discussions with frontline employees framed by two questions: “What are the strengths to build on?” and “What is stopping us from being great?” From these discussions, we came to understand when the customary ways of behaving were coming into conflict with the behaviors that would be necessary for all the other changes to stick.

This rich employee feedback supported the development of a critical few behaviors for each site. These behaviors were designed to reinforce the cultural strengths, thus encouraging positive emotions, and to address the most prominent pain points, thus reducing the potential for negative emotion.

The operating premise here was simple: positive emotions would encourage increased productivity. The behaviors were very specific and tangible; for example, “Promote transparency by increasing my availability on the floor and maintaining an open door protocol to address concerns and answer questions.” Then, for each behavior, a culture team that included site leaders and human resource partners developed ideas (called “formal and informal enablers”) that would help and support this behavior. These enablers ranged from tangible ideas that would be easy to execute (such as putting a suggestion box beside a manager’s door) to complex proposals that would require concerted efforts across many stakeholders (such as significantly improving the documentation of all processes).

Next, for each of these ideas, we developed a charter proposing a series of steps for site leadership to put the idea into practice, including metrics by which leaders could trace progress in this area. (For an example of one of these charters, “Share Feedback and Coaching,” see exhibit 5.1.) The program owner then presented these charters to senior leaders at a meeting convened to update them on the culture program to date and encourage them to select a “critical few” from a long list of behaviors. As the leaders discussed the portfolio of behaviors, they focused on the metrics; it was clear to them that they should select a few behaviors that could be documented and measured with relative ease. In other words, when it came to mechanisms for changing behaviors, measurability was a deciding factor in choosing the critical few.

MEASUREMENT AS AN APPROACH, NOT JUST AN OUTCOME

The agrochemical and agricultural biotech organization example—specifically, the charter the company designed for each mechanism—illustrates a useful point. As the culture team and the AILs worked together to design practical mechanisms that would encourage more people to exhibit each critical behavior more often, they kept asking the question, “And how would that be measured?” This perspective of perpetual inquiry helped them develop a nuanced, multifaceted approach with a lot of reassuring, solid metrics to report along the way. They were focused not just on one final big-picture score, like worker safety at Alcoa or laptop quality at the technology company, but on a whole portfolio of leading indicators designed specifically to help build accountability and follow-through. Ultimately, your goal should always be to find a way to attach new behaviors to improved business results, even if that link can seem tenuous or indirect. The continuous effort to find that link, to make it real and tangible for others, should be your north star.

Critical Behavior Charter: Share Feedback and Coaching

Exhibit 5.1 Example of “mechanism” charter from a critical few project

Just as with any other initiative or program, there are always opportunities to capture valuable data on effectiveness along the way. You can—and should—trace practical, tangible, simple information, like the number of people involved, responses received to email communications that are sent out related to the overall culture effort, and traffic to intranet sites that promote critical behaviors. This will help provide a baseline reference data set, allowing you to trace how momentum builds over time. Also look for data your organization is already capturing, such as employee engagement scores, and track whether any of these scores rise. This is especially effective if you preselect, early on, specific questions that relate to behavior areas where you are trying to make a difference—for example, if you have a critical behavior related to empowering employees at all levels, you might narrow in on a specific engagement survey question, such as the response rate to “I feel encouraged to come up with new and better ways of doing things.” You could even break out this data by level and investigate how the rate changes over time or by area of the business and assess whether any pilots improved those scores.

It’s also possible to build new data capture tools, such as behavior pulse surveys, an example of which is shown in exhibit 5.2. These surveys are, by design, quick and easy to respond to and ask only about the employees’ opinion on whether the desired behaviors are showing up in the organization. In chapter 4, we described the organizational network analysis rolled out across a bank to locate its exemplars and influencers. That survey also incorporated a pulse survey on the key behaviors to set a baseline. Leaders in this company intend to continue to employ this behavioral pulse check as an ongoing key performance indicator (KPI) to capture the momentum of their movement and identify areas where the behaviors are “taking” versus those where progress is not being made. This will help the leaders understand how and where to direct future interventions.

Exhibit 5.2 Example of a pulse survey

Finally, pay attention to stories that emerge along the way. Often, when an organization is successfully evolving its culture, stories about new ways of behaving that demonstrate “it’s not just business as usual around here” pop up and go viral. An incident becomes a story that others repeat because it contains some powerful truth —an implicit lesson that resonates with other experiences and conversations. The technology company story of the manager speaking his mind about metrics is, of course, a great example. When this kind of story emerges, grab it and make use of it—if people already find it interesting enough to pass it around, do what you can to amplify its impact. Mention it in communications, call out the “stars” of the story publicly, and ask them to speak more about their experience. But don’t just wait for stories to emerge: actively cultivate them by encouraging people to frame their experiences of witnessing how behaviors are evolving in story form.

Some companies make storytelling a standing agenda item for the groups of AILs. This helps focus discussions on clear articulations of what a behavior looks like in the work that gets done in the company every day. You can also solicit stories more broadly, and even make storytelling a theme of your entire culture evolution; we’ve seen some organizations run CEO-sponsored contests for best behavior story, hold TED talk–style meetings where frontline leaders tell stories to broad audiences of how things are changing, and conduct storytelling training as a form of intervention. These are all excellent ideas, and I also encourage you to remember that these stories are also a data set—you should be disciplined about collecting them along the way, analyze them to make their meanings clear, and report on their numbers and emergence just as you would with other “harder” metrics.

James served an energy company in the Middle East on a culture transformation project that was nearly two years in duration. Over the course of this project, he got to know a particular manager. This manager began as a great skeptic, but over the course of their collaboration he came to be a strong believer in what they called, on that project, “ behavior-based transformation.” At one point in the program, he was asked to report results to senior leaders. This is a direct quote from his enthusiastic report:

If I were to tell you that in six months we went from having ten people in my organization talking about and making commitments to our critical few behaviors to one hundred, and that the whole of my organization has gone from reporting us as a five-out-of-ten in terms of the prevalence of these behaviors to a seven, and we have a dozen positive anecdotes about things happening that weren’t previously observed, and plant availability (the business KPI that we cited as a priority before we started) has improved by 5 percent—then would you believe me when I say that I think we’re making good progress?

We love this quote! It illustrates the core point of this chapter about measurement and impact—that it is complex, multifaceted, and possible. The combination of measures expressed in this statement is very powerful. It pulls in aspects of participation (going from ten to one hundred people), custom-designed behavior survey results (going from a five-out-of-ten to a seven), and close observation of emerging stories of the behaviors in action (having a dozen positive anecdotes). Finally, it makes an explicit link to the business outcomes (improving plant availability by 5 percent). While the manager does not explicitly connect that 5 percent improvement in the tracked KPI to the critical behaviors, it is clear that he sees and believes in a causal correlation between them.

MEASUREMENT IS EMOTIONAL

James has worked with a mining company in the Middle East with mines and processing facilities that extend across the region. The organization’s workforce represents an extraordinary cross section of ethnicities, religious backgrounds, and even languages. The culture evolution program that James and the company’s leaders designed was, for those leaders, an important opportunity to ensure that the organization’s values were understood all across the com pany, as well as to align organization-wide behaviors with the strategic goal of continued geographic expansion.

This company, like the banking firm described in chapter 4, used a network analysis to identify the AILs and then gathered these authentic leaders for full-day facilitated workshops to discuss the critical behaviors, how they might be embedded at all levels in the day-to-day work, and what some potential metrics might be for tracking and demonstrating their manifestations. One critical behavior was demonstrating respect for others and for their workspace. At one processing facility, the AILs posited that safety and cleanliness of the physical locations where work got done was an accurate reflection of people’s respect for one another. The heavy metals industry in general and the facilities where metals are processed specifically require dirty, dangerous work; to the people who work at these locations every day, the links between cleanliness, safety, and respect are not abstract but direct. Together with the culture program leaders, the AILs identified a list of mechanisms that would encourage individuals to take personal responsibility for the collective cleanliness and safety of each site. They also developed an interesting metric for this behavior: waste management.

In several interviews and dialogues, AILs noted how dispiriting and frustrating it was to take waste out to the trash bins and notice that others hadn’t bothered to dispose of their own waste according to regulations but had simply left it beside the bins. This spoke to them of lack of respect; people were, when alone, behaving in ways that did not consider the impact that their actions had on others. One AIL proposed that a photograph be taken each week of the bins’ condition after a week of use before they were emptied. The photographs, week after week, documented progress from a site where people did not behave in ways that demonstrated their mutual respect for one another’s safety to one where this behavior was embedded—where the ground beside the bin was bag-free and clean.

We love this example because the organization’s leaders, as earnest and well-meaning as they were, never could have developed this mechanism and related metric. (Recall that we made this same point about the discovery of the mis-aligned quality metric in the technology company story earlier in this chapter. Let us underline this message here: listen to your AILs!) One must work at that facility to understand the actual and emotional impact that the sight of those trash bins had on the people whose job it was to navigate around them—and what this communicated about the lack of respect for others. The photographs, over time, served as a measure of progress. And the fact that the leaders studied them and took them seriously was progress of a different sort—the evolution of a very hierarchical organization toward one where leaders were actively, deliberately learning to consider the perspectives of people who did the tough work of their industry every day.

LOOKING AHEAD AT CULTURE AND MEASUREMENT

We will be the first to admit it: culture is a “fuzzy” topic, one for which establishing firm rules or universal standards of measurement is difficult. Our aim has been to convince you, with the stories and examples we’ve shared, that it is indeed possible to move conversations about culture from the theoretical toward the empirical. The key is to be practical and disciplined and to listen very hard to the voices of the people who do real work. You want to choose metrics just like you choose behaviors—not according to some abstract set of ideals but by paying close attention to the way real work gets done and what matters emotionally to people.

The longer we spend in this culture game, the more aware we become that this is an area of study still in its infancy. Other practitioners in this space are searching for or claim to have created a reliable, universal index that can measure whether a culture is “working.” We encourage these efforts and hope to someday applaud and embrace one as successful. For now, though, we will continue to encourage clients—and to encourage you, the reader—to focus not on an abstract idea of what the “best” culture is but on what is strongest, most reliable, and most effective within your current culture. We believe that is the quickest and most effective way to get the best out of people.

In our work at the Katzenbach Center, we are one small part of a larger movement of theorists and practitioners who are looking to make advances in the study of the “softer side” of organizations. In 2016, Morgan Stanley published “A Framework for Gender Diversity in the Workplace,” which proposed a correlation between companies that had made deliberate formal steps to address gender equity and stock returns and volatility related to those companies’ financial performance. Using a quantitative model that incorporates not just the mix of women and men at different levels of the company but also factors such as pay equity, maternity leave policy, and the existence of flexible work opportunities, the researchers were able to create a score that ranks companies relative to what Morgan Stanley calls their “gender diversity culture” and then connect that score to their standard financial metrics, such as returns and volatility. Morgan Stanley’s data is conclusive: “More gender diversity, particularly in corporate settings, can translate to increased productivity, greater innovation, better decision-making, and higher employee retention and satisfaction.”

We end here with this study because we were so inspired by this effort to make a clear connection between measurable, quantifiable root causes and a broad “cultural/behavioral” issue, gender diversity. We believe that the curiosity of colleagues inside and outside our own networks and the forms of data that are now available to all of us will allow more studies like this to proliferate in years ahead, further clarifying the connections between how we all behave, feel, and operate at work and how our organizations perform. And we would like to challenge you, our reader, not to rush out and build a model like this for your own company but to take away the simple idea that measuring and quantifying aspects of a culture not only is possible but can lead to some powerful insights.