Erich Stolz

Building on a very successful International Management career in several corporations, Erich has concentrated on helping companies to provide the foundation to grow, turning around or restructure.  Read more...

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Three Steps to a High-Performance Culture

Three Steps to a High-Performance Culture

Senior executives tend to think about corporate culture as a topic that’s hard to measure and hard to change. As a result, many choose not to invest in it despite all the evidence that, when skillfully managed, culture can be a powerful and enduring source of competitive advantage.

What does it take to get really great results? In the work described in Beyond Performance you will find a reliable formula which you can use to create a distinctive performance culture in your organization.

Step 1: Establish a common understanding of culture and metrics for it. Ask the top team of any company what their highest priority business goals are and you will likely hear answers like “increase market share by 10 percent” or “reduce costs by 15 percent.” Ask the same question about their highest priority cultural goals and you’re likely to hear a broad range of platitudes with few, if any, numbers. A recent research indicates that high-performing cultures are characterized by an ability to align (gain clarity on vision, strategy, and shared employee behaviors), execute (move in the agreed-upon direction with minimal friction), and renew (continuously improve at a pace that exceeds competitors) - three factors I also refer to as ‘organizational health.’ Companies that use this definition of culture to find the specifics that matter to them, and the right tools to measure those specifics, find that culture is no longer something that is hard to measure and manage just as rigorously as business performance.

Step 2: Focus on the few changes that matter most. I have found that it’s possible to meaningfully change no more than five aspects of an organization’s culture in a 12- to 18-month period. Concentrating on a short list has the additional value of forcing everyone to focus on the changes most important to reaching the desired end state. After 18 months, you will see that these cultural elements are sufficiently improved, and you can move on to creating a culture of innovation, people development, and customer focus for the next 18 months. Attempting to tackle all of these themes at once would likely fragment the effort and weakened its impact.

Step 3: Integrate culture change efforts with business improvement initiatives. Few employees have too little to do. This means that culture change efforts run as stand-alone programs typically are last on the list and rarely succeed. Successful efforts are fully integrated into the business initiatives you’re pursuing — easy once you’ve defined the culture effectively. For example, during the second 18 months of your cultural change program, you may want to include in your sales stimulation program some type of peer coaching from high performers across its organization, which will help to build a culture of developing people. In addition, you may want to make sure that the end-of-day team meetings for sales staff include not just numbers, but also stories of how individual reps had interacted with customers to build relationships, highlighting the goal of improving customer focus. The quality of coaching and customer focus is also incorporated into evaluations of regional managers, and sales force incentive payments are expanded to include assessments of these behaviors as well as financial results. Executed well, culture change programs using these three steps not only deliver better bottom-line results, but also provide a more fulfilling environment for employees. And for many executives, leading a successful culture-change program is the most rewarding work of their career, because doing so allows them to integrate the human factors that matter to everyone with business concerns.


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