Is culture change a busted flush?

By Stephen Jolly, Managing Director of M&C Saatchi Transform, and Calvert Markham, Director of the Centre for Management Consulting Excellence.

On Tuesday 2nd July, M&C Saatchi Transform will host a panel in partnership with the Centre for Management Consulting Excellence.

Our four panellists, Mark Babington, Financial Reporting Council; Megan de Klerk, Pennon Group; Christian van Stolk, RAND Europe; and Baroness Thornton, former CEO of The Young Foundation, will share stories, practical advice and discuss organisational culture transformation - an issue high on the agenda for any company which recognises the urgent need to continually adapt to the rapid rate of business, environmental and political change.

It is clear that traditional approaches to culture change need re-thinking. 81% of change and transformation programmes fail (Smith, 2002). In many organisations, change is seen as something that is done to people, rather than driven by people.

All of us now conduct business in a highly competitive environment fuelled by fast-changing technology (AI and blockchain are just the tip of the iceberg); economic and political disruption; increasingly complex legislation and regulation; new challengers and disruptive business models; and changing societal expectations. In response, organisations across the public, private and third sector need to boost workforce agility, resilience, innovation, wellbeing and engagement. Those who fail to do so will simply be left behind.

For too many years, we have taken the same approach to change, but expected different and successful outcomes. A focus on the ‘hard wiring’ of the organisation without a clear understanding of the drivers of human behaviour, has meant impactful and profitable change is unlikely to be achieved.

Time and time again, we prioritise process over employees’ behaviours, needs and motivations and fail to involve the very people most affected by the change. Lack of employee insight and leadership support are two of the biggest offenders and are both well-researched kryptonite to change programme success.

Workforce insight

People act socially, not rationally. In our heart of hearts, it’s something we’ve always known but the advent of behavioural economics, neuroscience and behaviour change as an industry has repeatedly demonstrated that we are social animals, acutely aware of group dynamics, peer group influence and, in this case, organisational norms.

Organisations must gather data to get under the skin of their workforce and understand the behaviours and motivations of the people who will feel and deliver change. Organisations should then use this insight to identify critical behaviours to be encouraged or deterred in line with your objectives. Then, they must constantly measure as the organisation goes through its cultural evolution to prevent the change programme from slipping off course and to demonstrate meaningful evidence of improvement.

Lack of leadership and management support

The role of the sponsor in modelling and positioning culture change as vital to business strategy cannot be underestimated. Without active recognition from leadership, the rest of the workforce is unlikely to take notice. Change practitioners must also remain keenly aware of middle ranking leaders, who can often be a bigger threat to change than the C-suite. Alvesson (2002) highlighted the majority of managers do not have a bird’s eye view of the entire organisational culture. Instead, they “manage within cultures and affect or negotiate the meanings and values of their subordinates, peers or immediate superiors”.

Guests and panellists joining the discussion on the 2nd July are coming together, because they want to see a better approach to change. They believe, and many have witnessed, how a people not process approach is proven to deliver behaviour change that is more likely to meet an organisation’s strategic objectives. Click here to find out more and register for the discussion.

--

M&C Saatchi Transform, combines rigorous research, a deep understanding of the social aspects of human behaviour and legendary creativity to help ambitious leaders identify and drive the behaviours they need to deliver change and enhance performance within their organisations.

The Centre for Management Consulting Excellence, promotes leading edge thinking in management consultancy by linking academic research and practitioner experience, and is our partner for this discussion.

--

Alvesson, M. (2002) Understanding Organizational Culture, Sage, London.

Smith, M. E. (2002) – Success rates for different types of organisational change. Performance improvement, 41 (1), 26.


Do. Feel. Think.

Using behavioural change to drive employee engagement.

By Stephen Jolly, Managing Director, M&C Saatchi Transform and Mark Mason-Jones, Managing Director, Personal Presentation Ltd.

Nobody’s ever learned to ride a bike from reading a book.

Such a book (if indeed one has ever been written) would probably give you a theoretical understanding of the process: where to sit, how you transfer your energy to the back wheel via pedals and a chain, how to use the handlebars to steer, how to brake, but by the time you have finished reading you still would not be able to ride a bike. Until you actually get on one and have a go, all of that knowledge and understanding will be practically meaningless.

Classroom learning has an important role to play in the education process, whether school, higher education or professional development. However, it has its limitations. It does not suit everyone’s learning style and there are some things it just cannot teach.

Much of our conventional education system is based on the belief that thinking – and developing the faculty of thought – is an end in itself. If action is required, it is predicated on thought – we’re taught to think before we act. Our feelings barely get a look in, typically being bypassed or suppressed as unnecessary interference - Think – Feel– Do (or TFD).

It’s strange that we have persisted so doggedly with this model, because we have known of its shortcomings for a long time. Over a hundred years ago, experimental psychologist Hermann Ebbinghaus formulated the ‘forgetting curve’, which plots memory against time. Ebbinghaus found that our retention of information absorbed in a lecture, for example, drops to around 40% in the first couple of days and then to 2‐3% after 30 days.

Experience tells us that very often it is precisely the opposite of TFD that’s at work, like when we first get on a bike. Here it is our body, through the intermediary of our feelings (a rush of adrenaline, as we feel we’re losing balance and need to correct) that is teaching our brain. Do – Feel – Think.

There is a mass of evidence (not to mention intuition) to suggest that effective, durable learning lies somewhere between these two extremes. Kinaesthetics is a learning system that advocates learning through carrying out physical activities rather than listening to lectures, or indeed, combining intellectual learning with physical activity, so that the learning is ‘embodied’. Its proponents argue that “learning doesn’t happen from the neck up, it happens from the feet up. Educators can no longer place movement, emotion, and thinking into separate ‘compartments’. Many students feel awkward when they want to move around or express emotions when teachers want them to sit, be quiet and learn. Educators would see their classrooms grow by leaps and bounds, once they realise that what their students are experiencing is a healthy integration of mind and body.” [1]

Designers and implementers of organisational change initiatives would see the same benefits. Behavioural change is in essence learning, retaining and acting on something new. So, a holistic approach to initiating and sustaining change – in which TFD, head, heart and body are all aligned and engaged simultaneously and without an imposed hierarchy – makes as much sense here as it does in the classroom.

That is why M&C Saatchi, world leaders in behaviour change, have joined forces world-class communication transformers Personal Presentation Ltd to revolutionise the all too conventional world of employee engagement.

On Thursday 20 June, we will be hosting Transforming Change, a 90-minute experiential breakfast workshop and discussion.

Date: Thursday 20 June, 08:00 arrival. 08:30 – 10:00am workshop and breakfast.

Address: M&C Saatchi, 36 Golden Square, London, W1F 9EE.

Together, we will share our new approach and explore:

  • Why 81% of organisational change programmes fail
  • How collaboration and transparency – two vital ingredients in any behavioural and cultural change initiative – can become lost in face-to-face interactions and how they can be re-established
  • How blockers to change can occur as a result of pre-conceived notions of people and what their behaviour represents. Plus, how a heightened awareness of these blockers can open the door to mutual understanding and a positive outcome
  • The power of energised articulation to give people the impetus, connectedness and confidence to engage in new ways of thinking and doing
  • The role of technology in measuring, sustaining and embedding change

Please contact Flick Hardingham, Senior Adviser at M&C Saatchi Transform on flick.hardingham@mcsaatchi.com, if you would like to attend.

[1]  Mike Kuczala, Training in MotionHow to Use Movement to Create Engaging and Effective Learning.


It's not all about the money.

Motivating your workforce to drive behaviours and performance.

By Stephen Jolly, Managing Director of M&C Saatchi Transform, and Chris Woodman, Managing Director at Leadenhall Consulting. Leadenhall Consulting partners closely with M&C Saatchi Transform in the areas of leadership, coaching and team development.

Last week, M&C Saatchi Transform, the organisational change specialists, in partnership with Leadenhall Consulting, welcomed a Change Management Institute lecture by organisational psychologist and management expert Professor Adrian Furnham. At our London offices overlooking Carnaby Street, Adrian shared insights on the importance of organisational culture and how to motivate employees effectively towards desired behaviours and subsequently, boost individual, team and company performance.

Adrian recently retired as Professor of Psychology at University College London after 37 years and is an adjunct Professor at BI: The Norwegian Business School. He is also the author of 1,200 scientific papers and 80 books, including High Potential (2018) and Motivation and Performance (2017).

 

No alt text provided for this image

The insight which provoked the most discussion over drinks afterwards was how money is certainly not the greatest motivator and can in fact demotivate.

Motivation comes in two forms. Intrinsic motivation is when the activity itself is its own reward. Extrinsic motivation occurs when people are prepared to take part in an activity, because they are compensated by some benefit, such as money. However, Adrian explained that money only has a very short-term effect on motivation for four key reasons.

  • We swiftly adapt to a salary increase and soon crave more
  • A salary increase prompts more concern over tax hikes
  • We constantly compare ourselves to others and this comparison is more important to us than actual money earned
  • Alternative benefits will often matter more. Would you rather have two weeks holiday or a £1,000 bonus?

Money can also decelerate motivation as rewards can be manipulative, rupture relationships, discourage risk-taking and make people feel bribed, leaving them to wonder what’s in it for them beyond their bank balance.

The most important issue is the concept of comparative fairness. If you cannot clearly link pay to performance or justify differential pay, it may be wise to ensure salaries are kept secret as your workforce will attempt to rectify a sense of inequity.

So, how are the most motivating company cultures driving desired behaviour?

  • Clearly link valued reward to the job performance needed to attain them. Implementing a pay-for-performance plan is a good place to start
  • Design jobs that make desired behaviours more attainable
  • Be aware that employees value different things. Create a cafeteria-style benefit plan allowing individuals to select the fringe benefits they most value, whether it be time off or a gym membership
  • Guide individuals towards their true passions, interests and values, and change the job to accommodate these preferences where possible. During the first week on the job at Facebook, managers sit down with new hires and ask them about the favourite projects they have done, the moments when they felt most energised at work and the passions they have outside their jobs. Armed with that knowledge, managers can build engaging roles from the get-go

Yet again, it was reinforced how deep insight into not only the individual, but also the collective workforce, is fundamental to motivate and drive organisational change effectively. Without this knowledge, you are simply stabbing in the dark.

At M&C Saatchi Transform, we combine rigorous research, a deep understanding of the social aspects of human behaviour and world-renowned creativity to help ambitious leaders identify and drive the behaviours they need to deliver change and enhance performance.

www.mcsaatchitransform.com


Governance with a human face.

People, not processes, drive profit and change.

By Stephen Jolly, Managing Director of M&C Saatchi Transform, and Sir Gerald Howarth, former Government Minister and Chairman, Addveritas.

Last week, M&C Saatchi Transform, the leader in organisational behaviour change, partnered with whistleblowing consultancy Addveritas to host a panel discussion exploring how workforce behaviours can drive change and profit in a rule‐governed world.

There is an increased focus from regulators, investors and customers on organisational culture. Behaviours are the manifestation of culture and positive workforce behaviours are a key driver of profit. From increased profit and knowledge retention through to improved productivity, customer experience and innovation, behaviour drives the bottom line.

However, in a market dominated by large management consultancies, systems and processes are almost always prioritised over people and their actual behaviours. The same rule applies to change programmes and repeatedly, change is done to people, not driven by them. As a result, a shameful 81% of all organisational change programmes fail. A figure little changed since the early 2000s (Smith, 2002).

Time and again, it has been proven that regulation, however complex, and compliance are not enough to drive positive workforce behaviours. The recent exposure of 456 patient deaths at Gosport War Memorial Hospital due to gross misconduct compounded by a cover‐up culture is yet further shocking proof of this.

Transform is M&C Saatchi’s latest business venture, established to tackle this people deficit by using behavioural science to drive organisational change. Transform was launched to bring employees back into view, give them a voice and enlist them to deliver real change for their organisations, whether that organisation be a global bank, a major charity or a government department. The partnership with Addveritas, a consultancy that specialises in the ‘hard‐wiring’ of governance and whistleblowing, offers a clear complement to Transform’s focus on the ‘soft wiring’ of people and behaviour.

 

Stephen Jolly introduces Richard Storey, Sir Gerald Howarth, Mary Inman and Bandini Chhichhia (left to right).

Hosted at M&C Saatchi’s Golden Square offices in London, the panel discussion was chaired by former Government Minister and Addveritas Chairman, Sir Gerald Howarth, who opened the discussion by asking: could the disaster at Gosport War Memorial Hospital have been prevented through a thorough understanding of the people involved, not just a focus on processes?

Richard Storey, Global Chief Strategy Officer at M&C Saatchi and our first panellist believes so. Richard has spent most of his career trying to understand how to get people to do what we would like them to do. He is a firm believer in understanding people deeply, before seeking to change their behaviour and shared some of his biggest learnings.

•     People are irrational, irregular and will not do what they are told

Richard shared the example of a recent M&C Saatchi project, where his team was tasked with convincing young men not to risk their lives by racing trains at level crossings. Interviews revealed they knew they shouldn’t and they knew the risks, but they believed they were invincible. Richard realised they couldn’t simply tell them what to do. He needed them to work it out for themselves.

M&C Saatchi’s creative solution, which dramatically decreased the number of incidents, was a video game simulation, which allowed the young men to witness and feel the true risk.

•     People act on incentives rather than instruction

How can we help people understand what is in it for them, rather than simply demanding compliance? The modern organisation needs to support employees to understand what it will do for them, to attract top talent and drive behaviour change, rather than simply expecting them to fall into line.

The second panellist, Mary Inman, agreed that we overlook employee behaviour at our peril.

Mary, an international lawyer, is a partner at Constantine Cannon representing whistleblowers in the UK, EU and worldwide. In her view, it is the message, rather than the messenger, that is most important and whistleblowers should be celebrated. Mary noted that whistleblowers often have the organisation’s best interests at heart, seeking to speak up within the organisation, before they are driven to speak out publicly if they do not feel heard. However, this is generally not the case. Throughout her career, Mary has repeatedly witnessed whistleblowers being demonised and expelled from organisations.

Tricia Newbold, who suffers from a rare form of growth deficiency syndrome, ran security clearance at the White House for many years. Tricia revealed that a number of people, including Trump’s son in‐law Jared Kushner, should not have been granted clearance under current rules. She was swiftly vilified by colleagues, who went as far as moving her files to the top shelves out of reach, before finally being suspended from her job.

Mary advocated seeing those who speak up as allies, allowing the organisation to correct negative behaviours, prevent scandal and minimise adverse impact on the bottom line.

Our final panellist, Bandini Chhichhia from the European Bank for Reconstruction and Development (EBRD), is particularly interested in driving the right behaviours for ethical outcomes.

Bandini works within EBRD’s Office of the Chief Compliance Officer to promote good governance and ethical behaviour, so that the highest standards of integrity are consistently applied to all Bank activities in accordance with international best practice. As a Principal for Policy and Ethics, she is part of a team responsible for establishing, communicating, monitoring and implementing fundamental rules regarding the required ethical conduct of those working in the EBRD.

One of Bandini’s key challenges is ensuring that the ‘right’ behaviours are internalised by new staff members joining the Bank. One of the greatest insights of her role has been linking the ‘how’ to the ‘what’ of any job, so that staff members are continually motivated to behave in an ethical fashion, whilst pursuing the Bank’s mission to develop open and sustainable market economies in countries committed to, and applying, democratic principles. Her key learnings to date include:

•     The need to consistently link motivation and behaviour to the purpose of the organisation, so that people can connect ethical behaviour and values to the end impact of their work

•     Ensure that an organisation’s training strategy is bespoke, responds to the organisation’s risk profile, and where possible, training should be adapted to the needs of different parts of the organisation. For example, procurement would face very different risks to communications

•     Ensure talking about ethics is normalised, and forms part of the organisation’s internal dialogue, so that tricky conversations will not be avoided, and bad behaviour swept under the rug

•     Always listen to your workforce, celebrate those who highlight misconduct and protect whistleblowers, including their identity when requested

During the evening’s discussion, it became clear that the most impactful and profitable organisations listen to their workforce, understand how to adapt messaging to suit the audience (for example, Richard Storey revealed that Millennials tend to prefer casual language) and ensure people, rather than process, are the priority for any change initiative.

Stephen Jolly is Managing Director of M&C Saatchi Transform, helping ambitious leaders harness workforce behaviours to deliver change, mitigate risk and enhance performance through behaviour change communications.

www.mcsaatchitransform.com


The more things change, the more they stay the same.

Organisational change and the AI hype.

People are confused. Organisations are confused. The hype surrounding artificial intelligence (AI) knows no bounds. Pinning a definition on it is in itself no mean feat. For some, it’s a platform to sell new technologies, such as blockchain and cryptocurrency. For others, its focus is on the slightly less prosaic concept of machine-learning. For the populist media, it’s an opportunity to paint a picture of a future when the robots seize control.

Given the hype, is it any wonder that organisations are experiencing their very own version of Fear of Missing Out and are frantically trying to make sense of what AI will mean in precise and rational business terms? The biggest challenge now is convincing management that AI can’t solve everything. Yet, a recently published and excellent report by venture capitalists MMC Ventures found that two-fifths of Europe’s so-called AI start-ups don’t in fact use AI in any of their products. So, what really has changed and what will change?

For those working in communications and change management, the day-to-day reality of AI really is no different from other business issues and initiatives. Whatever the business rationale for harnessing AI, and the business benefits expected, the approach should seem strangely familiar:

  • Build a rigorous platform for change. Invest in proper research to understand the organisational climate for change
  • Use the data to get under the skin of the organisation. Not only will it help bust some of the myths, but will usually deliver some surprisingly useful insights
  • Define precisely the context of and rationale for change
  • Involve people in the developing the change. People don’t normally resist what they create. This is what we call "converting influencers into campaigners"
  • Align leadership at every level
  • Communicate, communicate, communicate
  • Look to align systems, processes and people to sustain effort

As with any shiny new thing, AI is really just the means to an end rather than end in itself. It’s a bit like all things ‘digital’ from a few years back and the rush to create ‘digital’ functions within organisations which are now being hurriedly dismantled.

Taking a human approach to AI means ensuring its adoption is part of an organisation’s business strategy and not a stand-alone strategy divorced from the day-to-day operating environment. We all have a vital role to help cut through the hype and reinforce the people part of change. Until that is we are all replaced by machines...


People not process – a smarter way to change

Traditional approaches to organisational transformation are increasingly high-risk. An over-reliance on process relegates the importance of people in securing positive and profitable change

Change isn’t working. The failure rate of organisational change projects remains unacceptably high (it’s a subject of much debate: we prefer to go with 81%, based on a 2002 study which examined reports on the success of organisational change covering some 40,000 organisations [1]).

The future business environment is going to be a scary place and so we need to re-think our approach to change and transformation. An approach based on people not process. Many organisations pay lip service to the people side of the equation during times of change. But when push comes to shove, it’s all too easy to focus on the ‘hard wiring’ of the organisation at the expense of behaviours, values and attitudes of individuals and groups of individuals who make up the organisation. Without a supportive internal culture that clearly defines desired behaviours, meaningful (and profitable) change is unlikely to be achieved.

The three myths

Even for those organisations which do recognise the importance of people, culture change remains fraught with difficulty. It’s a common cry from those affected that they are the least involved – change remains something that is ‘done’ to people. We believe this is the result of three myths that still characterise approaches to change in general and to transformation programmes in particular:

Myth 1:    People act rationally

People act socially, not rationally. In our heart of hearts, it’s something we’ve always known but the advent of behavioural economics, neuroscience and behaviour change as an industry has repeatedly demonstrated that we are social animals, acutely aware of group dynamics, peer group influence and, in this case, organisational norms.

Myth 2:    Hearts and minds must be won before change occurs

Traditional approaches have focused on changing attitudes and beliefs – the winning of hearts and minds. In today’s environment this simply takes too long (attitudes and beliefs are deep-rooted and hard to change). We believe that by identifying and promoting desired behaviours, people can think and act in new ways that deliver results more quickly and with greater impact.

Myth 3:    Change can only be led from the top

Of course, leaders and their teams have a fundamental role in highlighting the state of the business, its competitive threats (and opportunities) as well as identifying strategic imperatives for the future. Employee reactions will be varied and different. The problem comes when leaders try to second guess these reactions and how to tackle them – as if there is only one solution and, as a leader, “it’s my solution.” The best way to achieve sustainable change is for it to be employee-driven, for it to be built bottom-up and for leaders to trust their people to come up with answers (after all they are likely to know best).

Goodbye to Gantt charts 

Addressing the three myths only goes part-way to delivering successful change. ‘People not process’ also has a less prosaic but no less important interpretation.

For those involved at the sharp end of transformation programmes, the whole area of project management and governance is crucial in delivering desired outcomes. Yet, ironically this requirement for good project discipline can actively impede progress – all too often the focus on observing correct protocols and procedures, over-bearing reporting requirements and the demands of the Gantt chart results in the process becoming an end in itself rather than a means to facilitate desired change.

Change is a not a linear process that involves ticking off one task before moving on to the next. It’s a movable feast, fraught with uncertainty, often influenced by extraneous factors that may have a significant impact on ultimate success.

People not process

By its very nature, focusing on people not process involves more uncertainly, greater irrationality and wider organisational involvement. Yet the end-result outweighs the added difficulty of getting there.

For too many years, we’ve been doing the same thing when it comes to change and expecting different (and successful) results. Now is the time to take a different view – if we don’t, we’ll find ourselves repeating the same old statistics about the failure of change programmes and worse, organisations will continue to suffer consequences that imperil their success.

[1] Smith, M. E. (2002) – Success rates for different types of organisational change. Performance improvement, 41 (1), 26