When the project and the organizational culture clash
Michelle J. Markus, Chief Communications Officer, Point B
A clash between the project and the organization's culture is often inevitable. At a fundamental level, change does not come naturally. To achieve break-out results or alter the way business is done, an organization must often drive toward goals and objectives that challenge its status quo. The projects and initiatives that successfully implement change must model new thinking and behaviors and, above all, make room for others in the organization to follow. Typically, project managers and project sponsor don't address the friction points between the objectives of the project and the culture of the organization until after trouble appears and success is in jeopardy. But, like any other project risk, the potential conflict between the organization's culture and the project should be managed proactively. Project leaders should assess both the culture and the stakeholders so they can adopt the right change management strategies to head-off a potential clash before resistance impedes success.
“Guiding change may be the ultimate test of a leader” (Kotter, 2007, p. 4).
Organizations are under pressure, more than ever, to change. Technology propels ideas around the globe instantaneously. Less than a generation ago, before the Internet; possessing information created privilege, today barriers to obtaining information are breached effortlessly by few key strokes. Compounding this transformation is the recent and deep global recession. Since 2008 business models that thrived for the last 100 years across dozens of industries have been cast aside. To stay afloat, management must frequently reinvent the relationship their products and services have with customers. Yet amid these profound changes, the way people behave within organizations often lags behind the pace that the market place demands. People are creatures of habit. Working in groups to perform complex tasks demands high degrees of collaboration. To make working together possible, organizations cling to beliefs and ideas that promote specific behaviors so they act as a cohesive unit to accomplish mutually desirable outcomes. Teams seek routine to drive efficiency, then become reluctant to deviate from those routines when the forces around them change.
It is inevitable, that the initiatives and projects organizations deploy to accomplish their goals often challenge the very fabric of the culture in the very same organization. In this paper, we'll look at two examples of mature companies, each with strong and distinct organizational cultures that faced a clash between deeply rooted behaviors and new business objectives required to ensure their businesses thrived.
Project managers can find themselves caught in the cross-hairs between opposing forces: on the one hand an organizational culture resistant to changing longstanding ways of doing things, and on the other hand, business drivers for the project that demand the culture changes to accommodate new organizational behaviors. Project managers and project sponsors often neglect to address the friction points between project goals and the culture of the organization until after the project is underway and success is in jeopardy. Conventional project management training does not often equip project managers to identify and manage potential flashpoints in the organizational culture. Project managers who are attuned to the underlying culture of the organization and understand how the objectives of their projects may challenge that culture can prepare to head those challenges off like any other risk the project might face.
Assessing the Organizational Culture
Astute project managers embarking on a high impact project take the time early on to understand the culture of the organization. By definition, an organization's culture is comprised of the beliefs and standards of behavior that exist to form and sustain the identity of the group (Turner & Rosenbloom, 2008, p. 3). An organizational culture presents itself broadly across an enterprise but it may also be distinct between different divisions of a larger entity. Project managers can take proactive steps to assess the organizational culture. Through a set of systematic interviews with stakeholders and key influencers over the project, individual project managers can build an understanding of these four areas:
Figure 1. Key Indicators of an Organization's Culture.
Every organization has enduring beliefs that it attempts to act upon through its mission. Core values are often widely promoted internally by senior leadership and if genuine, these values resonate with customers who interact with the organization.
Core values provide both a catalyst and litmus test for how people behave in the organization. Because these values are often broad and encompass a wide set of behaviors, drawing a firm connection between the goals and objectives of the project and the organization's core values is a necessary step to heading off a potential clash once the project is underway. If the project team is unable to clearly describe how the project supports the core values of the organization, it may quickly meet resistance. Endorsement from senior leadership is often essential in presenting a clear argument for how a potentially contentious project either perpetuates core values or, if values must change, how the project is driving a positive and necessary evolution in the beliefs of the organization. Once the project team settles on the right set of messages to bridge any perceived gap between the organization's stated values and the project's outcomes, these messages should be central to how the project is communicated.
Reward and Recognition
Beyond money, the means (either formal or informal) by which praise and encouragement are shared and wins are celebrated provide important insights into what behaviors the organization values. Project teams should quickly adapt informal and formal means of reward and recognition to bolster the efforts of those who are supporting a controversial project. Applying familiar ways of celebrating quick wins and hard work will not only support individuals taking risks in support of the project, but will demonstrate to the larger organization that the most positive aspects of the culture are being applied in support of the project effort.
How the organization faces adversity and overcomes obstacles illustrates the types of sacrifices the culture is willing to make to perpetuate its values. Projects that challenge the organizational culture may require mitigating steps to preempt and address adversity.
Here the project manager and the project team must develop a wide and effective set of tools, including leveraging leadership and project sponsors, creating targeted communications that speak to what is controversial and heading off the potentially adverse consequences with concrete and highly visible steps.
Perhaps the most important aspect of the organizational culture that a project manager must understand is the ways decisions are made. Projects that threaten or challenge cultural norms will make objective decision-making more difficult and thus place greater emphasis on the project team and project sponsors to establish clear decision-making bodies of stakeholders who can remain objective. When assessing the organizational culture, determine its natural decision-making patterns and styles. Examples of common decision-making styles include:
Authoritative: One or a small set of leaders reserve both the process and the information to make decisions; decisions provide broad guidelines for further decisions by others (often of lesser rank) in the organization.
Consultative: One or a small set of leaders reserve the right to make decisions, but the decision-making process is transparent and open to input by others.
Democratic: Affected parties have a direct stake in making decisions and outcomes are set based on majority opinion.
Consensus: All affected parties must agree on a decision before moving forward.
Organizations often use multiple decision-making styles at once, picking the type that best fits the magnitude of the issue at hand and the consequences it will have. For key areas of the project, project managers must ensure that decision rights are clearly stated and that those responsible for decision-making truly have the appropriate information, authority, and ability to foresee and communicate the consequences of their decisions across the organization.
Change: Beyond a Single Event, the Journey
A fundamental principle to managing organizational change is that change is not an event, it's a journey. Individuals encounter change all the time; the journey is in how the individual transitions or responds to the change. In many cases this transition or reaction to change is second-nature or a learned behavior. For instance, one could be walking along the street on a cool crisp morning when it starts to rain. The change is weather related and the transition might be to find shelter, open an umbrella, or as many may do—do nothing. How someone transitions to the rain is a learned reaction and it's usually not disruptive to one's day. But what happens when the transition is not second-nature? Or when the experience of a change is unwelcomed or one is unprepared for it? Fear may set in; the feeling of being physically or emotionally unprepared may be traumatic ultimately leading to a natural resistance that the change is happening. The change may turn someone's daily job upside down. It may change who one works with and how they work with them. It may impact one's family, commute, and stress level. The fact that the change is out of a person's control can be debilitating. This is the type of change that many projects and their project teams are up against; the type of change essential to knowing how to lead people through.
In addition to recognizing that change is a journey, project managers must consider that the journey from current state to future state is not instantaneous. The cliché of “change takes time” and “there's no short-cut around it” is true. Once a project manager knows a change will be implemented, there are essential steps to follow to plan and prepare for the journey that those impacted will take. The first is to identify those stakeholders who will be impacted by the project.
Stakeholders are either positively, negatively impacted by your project and in some cases, may not be impacted at all. From executives to front-line employees, customers to shareholders, the list of stakeholders may be small or large depending on the scope of the project. For instance, in the case a time tracking system, stakeholder groups may include: employees who will use the system, their management, IT resources, and finance resources. Once stakeholders are identified, the change curve can help project managers understand stakeholder behavior and move it in a positive direction.
The Change Curve
Kübler-Ross’ On Death and Dying (1969) explores the stages human beings experience when faced with traumatic change. The same concepts are explored in the change curve; a framework that project managers can apply when looking to understand how stakeholders experience organizational change.
Figure 2. The Change Curve
The vertical axis is “performance”—as the magnitude of the change becomes clear, project managers can expect to see a performance hit in the stakeholder group. The length of time that the group's performance is impaired—the horizontal axis—is directly related to how well the journey is managed. There are five stages to the change curve.
Unaware—The stakeholder group has no knowledge or realization that a change is coming.
Aware—Stakeholders realize that something has or is going to happen.
Understand—In this stage the change is no longer conceptual. The stakeholders can process what the change directly means to them personally and professionally.
Acceptance—Stakeholders now take action related to the change. For example, with a system implementation, the behavior a project manager can expect to see is that users log into the system and perform the new tasks they were trained to do.
Buy-in—Sponsor-type behavior is illustrated in messages, actions and decisions that communicate enthusiasm and a commitment that inspires others to accept the change.
Dynamics of the Change Curve
A disruptive and common element of the change curve critical for any project manager to plan for is the valley of despair. The valley of despair is when organizational productivity is at its lowest due to the distraction of stakeholder doubt, fear, and resistance. Rumors, lack of trust, and lack of control weighs on stakeholders and impacts their willingness to accept the change. This valley is natural and most stakeholders go through it; although, a project manager can influence how quickly people move into and out of the valley.
Before stakeholders encounter the valley, project managers can plan for what concerns they will have and endeavor to answer their questions, enlist peer support such as change agents, or provide venues by which stakeholders can express their concerns and know that they have been listened to. One tactic to employ to influence stakeholders’ journey out of the valley is to provide them an opportunity to experience the change in a test environment. A project team can set up a business simulation environment whereby stakeholders can simulate the new system, processes, or roles. Stakeholders should be encouraged to ask questions and provide input into what may not be working, an investment that engages them in the change and helps move them along to the stage of understanding.
Another dynamic to the curve is that stakeholders can move both to the right as well as back to the left on the curve. One example would be if a project sponsor communicated that there was going to be an organizational change but the Customer Care Team would not be affected. The Customer Care Team would likely move from aware to understand pretty quickly due to the expressed minimal impact. The next day, the CEO sends an email announcing that the same Customer Care Team is actually now part of the organizational change and will have a new leader. The project manager can anticipate that the Customer Care Team would slide back down into the valley of despair, questioning the change and worrying about their new leader.
One notable dynamic on the curve is the stage of buy-in. Project teams all too often aspire to move every stakeholder to buy-in. Experience shows that this often requires unnecessary effort because not everyone needs to buy-in to the change. For many employees, acceptance is all that's needed. The most critical stakeholder groups to move to buy-in are executives and project sponsors. The success of a project depends on stakeholders following through with their new responsibilities, performing new tasks, and using new tools available to them. Those are actions and behaviors a project manager should expect to see at acceptance, not buy-in. Additionally, project managers should anticipate that stakeholders will be at different places on the curve at any given time.
Stakeholders on a Change Journey
The ability to influence stakeholders’ journey along the curve is a critical skill for a project manager. From unaware to aware, it can be as simple as informing stakeholders that a change is coming. As more details are shared about how the impact of the changes will affect individuals, teams, and the entire organization, stakeholders will begin to move to understand.
As the project team continues to answer stakeholders’ questions and demonstrate how the stakeholders’ goals align with those of the project, they will continue to move along the curve. Acceptance requires that what a project sponsor or project manager said would happen, does happen. Project managers should keep an eye on consistent messages, look to share key wins and successes, and be honest and forthcoming about what is not working and why.
There are additional stakeholder groups to understand and influence where they are on the curve. One such group is the project sponsors. If a project's leaders are not ahead of their employees, the employees will end up leading themselves. Another group to pay attention to are the early adopters: these are stakeholders who are first to embrace any change and are willing to help or contribute however they can. Project managers should consider harnessing the energy of early adopters to bring other stakeholders out of the valley of despair. Project managers should also identify key influencers: people with positional authority, control over resources or thought leaders who wield influence in the organization (Turner & Rosenbloom, 2008, p. 3) and can answer questions and address the concerns of those in the valley to help move them out of it. And sometimes for stakeholders in the valley of despair, it is simply a matter of waiting and seeing—which is a seasoned project manager will learn to accept as long as it does not disrupt the success of the project.
Establishing a Change Management Strategy
“In reality, even successful change efforts are messy and full of surprises” (Kotter, 2007, p. 11).
Even well thought-out change strategies will encounter unexpected roadblocks and surprises. Upon selecting which change management strategy to employ, a project manager should take into account the organization's internal and external conditions, culture, and factors that may support or restrain the successful implementation of a change. Three strategies to influence stakeholder's change journey include: force-coercion, rational persuasion, and shared power. Based on various levels of social power, these strategies evoke different behaviors of key influences of the change, resulting in different outcomes (Stolovich, Pershing, & Keeps, 2006, p. 271).
Force-coercion uses positional power to create change through formal authority or force. Reward and punishment is usually the power behind force-coercion. Leadership behaviors include direct force, political maneuvering and sometimes threats. One organization that lives and breathes force-coercion is the military, known for its command-and-control structure.
Whereas force-coercion exerts the influence of political or positional power, rational persuasion is used to create change through empirical argument or data. Expertise is the power behind this strategy and leaders usually reference facts, sources, studies, and outside experts to persuade stakeholders to accept the change. Doctors often employ this strategy with their patients, citing research studies to show what will happen if the patient if does not change his or her diet or begin to exercise.
Shared power develops support for the change through personal values and commitments. Participation and reference drives shared power. When implementing shared power, a project manager will involve stakeholders in the planning and implementation of the change. Projects may leverage focus groups, surveys, change agents, pilot groups and steering committees of stakeholders. Shared power is especially supported by social media and the visibility it provides to processes, decisions, and issues. Member-owned co-ops are a great example of how shared power is used in an organization. Members are involved in decision-making and even sit on the organization's board.
Each of the three change strategies thrive when used in the right culture and when managed in the right way. One might ponder the failure of leveraging shared power in a military organization. Members of the military most likely would revolt; in a command-and-control organization, a hierarchical structure that requires following directions without question is critical to success.
There are risks associated with all three of these strategies. With force-coercion, there's a risk of temporary compliance. People may have 24 hours to implement a new policy and they will execute that order; however, they may not follow that same policy a month later. Additionally, a project team is less likely to get feedback and contrary perspectives on decision-making with force-coercion. Sometimes this feedback is crucial and the unwillingness to bring something forward could be detrimental to the success of the change.
With rational persuasion, politics can become a risk. Stakeholders opposed to a change may select a different expert that the one presented by the project team. Trust may also become an issue, especially when stakeholders perceive that experts are only telling you what they want you to hear.
Lastly, shared power can be time and effort intensive. The more people a project team involves in decision-making, the more time it will take to make a decision. Challenges also exist in keeping everyone content once the decision has been made.
Case Study 1: Changing the Decision-Making Style
A privately-held American outdoor retailer was facing multiple opportunities and challenges due to its aggressive growth goals in an unstable environment flooded with multiple e-commerce channels and the growing influence of social media. The retailer's traditional direct marketing channels needed to be improved to realize more efficiency and stronger returns. Their current direct marketing channel—specifically direct mail—was laden with legacy-based processes and decision-making. Together with a strong consensus-based and destructive “this is how we have always done things” culture, the retailer's project management and executive teams struggled to make any progress toward reprioritizing their cross-channel marketing investments and aligning corresponding goals.
Upon further investigation, the critical difficulties were lack of clear ownership and muddied roles and responsibilities in their direct mail processes. By applying a RASCI model (ratify, accountable, support, consult, and inform), the team was able to agree on a streamlined and clear decision-making matrix. The approval and immediate application of the RASCI model enabled the identification of a project sponsor, steering team, project lead and project team.
Another roadblock for the team was their overall corporate decision-making model. The retailer valued the experience of its employees and had a deeply embedded practice of consensus-based decision-making. Consequences of these cultural attributes included passive-aggressive behaviors whereby the more experienced (and typically more legacy based) employees would disrupt progress, and the desire “to get everyone on board” took months of cycle time. Leveraging the commitment behind RASCI, the team identified: (1) which decision-making model they would leverage; (2) the change strategy to be employed to help move the organization forward; and lastly (3) through applying the change curve, tactics that would be required to deploy the necessary changes to the direct mail processes.
Moving from Consensus to Consultative Decision-Making
The true commitment to transition from consensus to consultative based decision-making came from a desire to bring more clarity to roles to empower their team to make decisions more quickly. Through gaining alignment on their working RASCI, those who ratified and were accountable for implementing changes were expected to consult with others, but no longer required to build consensus across all stakeholders. Another positive outcome of this change was to create more focused leadership teams who now no longer needed to be part of every decision happening in their organization.
From Shared Power to Rational Persuasion
The retailer's former consensus-based culture prevented them from leveraging any other change strategy aside from shared power. As they evolved to consultative-based decision-making, those in consultative roles became more influential. Influence equates to power and those stakeholders’ influence in consultative roles could be positive as well as destructive, depending on how aligned these stakeholders were to the goals outlined as well as their impacts on individuals and teams. One critical decision the direct mail project lead made was to manage rather than avoid those who may be destructive to the initiative's efforts. By including these stakeholders early on in the process and deployment decisions, the team was able to respond to their concerns, eventually turning their biggest opponents into their most influential change agents.
Leveraging the Change Curve to Influence Deployment Tactics
The most important stakeholders on the direct mail project's change curve were the marketers and merchandisers whose roles and responsibilities were now changing. They were aware of the changes; however, the effort to get them to understand and then begin to implement the changes was no easy task. Employees feared lay-offs and worried that the new processes would hamper the merchant's ability to meet forecasted sales goals. Even though the new processes and roles reduced the risk that the retailer was bearing in these areas, most of these stakeholders needed to see it to believe it. Through listening to what their needs were, the project team added three additional weeks to their project plan to introduce a business simulation step whereby marketers and merchants could simulate their new roles and responsibilities and see the tangible positive impacts to the direct mail pieces. Additionally, the simulation helped to identify otherwise unforeseen issues and afforded the team an opportunity to work directly with the marketers and merchants to resolve them. The investment in this activity—from the time, design, willingness to listen and involve stakeholders in improvements—all helped move this critical group from aware, to understand, and eventually to acceptance of the changes.
The retailer leveraged the project's success to influence work in other departments. RASCI, consultative-based decision-making, and a focus on rational persuasion are now widely accepted practices across the organization.
Case Study 2: Applying Rational Persuasion to Overcome Resistance
Throughout its 75-year history, a major U.S. airline always left the responsibility for determining how cargo and perishable goods were loaded onto its airplanes to each individual airport's staff. The airline valued empowering individuals closest to the aircraft to make as many decisions as possible. Over the years however, as the cargo business grew, each individual airport was increasingly focused on looking after its own cargo, and was loading multi-stop flights in a manner that had little regard for the next airport “up the flight line.” As a result, perishable cargo was getting bumped and some priority cargo never left the warehouse. Customers were furious and threatening to take their business elsewhere.
The project team responsible for centralizing the operational decision-making for loading commodities knew they would face resistance from many of the individual airports around the system. Moreover, skilled employees responsible for calculating the weight and balance of goods to be loaded on the airplane would no longer be needed at each individual airport. This meant for some employees that a way of life was coming to an end.
Identifying the Need for a Change in Decision-Making Style
To head-off the potential clash, the project team knew that in clear and simple terms, everyone affected had to understand the reasons for this change. However, it was unrealistic to believe that every employee could be won over. Moreover, a consensus-based decision-making style at the airports needed to be replaced by a more authoritative central organization. It was essential to move the leadership at the individual airports along the change curve, to where they were modeling the new behaviors to their employees.
Creating Opportunities for Shared-Power to Build Buy-In
The project team chose a rational persuasion change management strategy. By first educating the airport leadership on the costs of doing business currently and the benefits to the larger airline of centralizing part of the operation, each manager could see how their actions could contribute to the greater good. Then the project team used the airport leadership to drive how the change would be deployed at each individual airport by taking a shared power approach. While not giving the airport management veto power over if the change occurred, the project team at least allowed the airport manager to be proactive in how and when the change occurred. Some employees felt disenfranchised, and a few even left the company. But the transition occurred smoothly and today the airline is realizing significant cost savings and revenue benefits from centralizing this portion of their operation.
Project managers often discover too late that the initiatives they are leading are clashing with the underlying culture of the organizations they are working in. By taking deliberate steps to understand the culture early on, project managers can identify and begin to mitigate potential challenges. Taking the organizational temperature, identifying what type of change management strategy is needed and then putting that strategy into place is not easy. It requires an objective point of view, a willingness to engage key influencers early in the project and the ability to surface aspects of the organizational culture that may be at odds with the project in a manner that is diplomatic and not off-putting to those with a vested interest in how the organizations runs. Building the awareness of the organizational culture and addressing its impacts may seem daunting. But the consequences of not doing so can be dire. Most transformational initiatives fail because of lack of awareness and buy-in, and because managers fail to understand that change is a process, not an event (Kotter, 2007, p. 1).
Preventing a clash between the project and the organization's culture takes time and forethought. Understanding and preempting the cultural forces that have the potential to sabotage success usually requires several rounds of lobbying stakeholders and key influencers before final plans are set. The benefits of doing so are significant, however. It often means the difference between a failed project and one that reaches and sustains its goals.
Kübler-Ross, E. (1969). On death and dying. New York: Touchstone.
Stolovich, H., Pershing, J., & Keeps, E. (2006). Handbook of human performance technology. San Francisco: Pfeiffer.
Kotter, J. (2007, January). Leading change: Why transformation efforts fail. [Electronic Version]. Harvard Business Review.
Turner, B., & Rosenbloom, S. (2008, July). Mastering team political capital in high risk/high profile projects. PMI Global Congress 2008, North America, Denver, Colorado.
© 2010, Seth Rosenbloom and Michelle J Markus
Originally published as a part of 2010 PMI Global Congress Proceedings – Washington DC