building a high performance business culture daniel denison international institute for management...
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Building a High Performance Business Culture
Daniel Denison
International Institute for Management DevelopmentLausanne, Switzerland
Denison Consulting, LLCAnn Arbor, Michigan, USA
Denison & Hooijberg’s newest book illuminates the cultural dynamics firms need to manage in order to remain competitive, including:
• Supporting the front line• Creating strategic alignment• Creating one culture out of many• Exporting culture change• Building a global business in an
emerging market• Building a global business from an
emerging market
“A milestone in the culture studies arena.”
-Edgar H. Schein
Published June 2012
Supporting the Front Line
Domino’s Pizza
Creating Strategic Alignment
DeutscheTech & Swiss Re
Creating One Culture Out of Many
“Polar Bank”
Exporting Culture Change Across National Boundaries
GT Automotive
Building a Global Business in an Emerging Market
GE Healthcare China
Building a Global Business from an Emerging Market
Vale
What Is It All About?
Image by R.A. Clevenger
Norms,Behaviors
and artifacts. Visible, tangible.
Personal Valuesand Attitudes.
Less visible, but can be talked about.
Cultural Values and Assumptions.
Usually not visible at all, often held subconsciously, rarely (if ever)
questioned in everyday life.
Mindset is the Foundation
Lessons SurvivalCulture
Underlying Principles
Visible Symbols
http://www.youtube.com/watch?v=6_WAmt3cMdk
Culture Reflects the Lessons Learned Over Time
Understanding Habits & Routines
Rituals, Habits, & Routines
We must make automatic and
habitual ... as many useful
actions as we can.
The more of the details of our
daily life we can hand over to
the effortless custody of
automation, the more our
higher powers of mind will be
set free for their proper work.
William James
Morrison’s essay opens with a story of a young time & motion
expert trying to find a way to speed up artillery crews during
WWI, just after the fall of France. He watched one of the five-
man gun crews practicing in the field with their guns mounted on
trailers, towed behind their trucks. Puzzled by certain aspects of
their procedures, he took some slow-motion pictures of the
soldiers performing the loading, aiming, and firing routines.
When he ran these pictures over once or twice, he noticed
something that appeared odd to him. A moment before the firing,
two members of the gun crew ceased all activity and came to
attention for a three-second interval extending throughout the
discharge of the gun.
Since this seemed like quite a waste of time, and the young time
& motion expert really couldn’t make any sense of it, he asked
an old artillery colonel to look at the films to see if he could
explain this strange behavior.
The colonel, too, was puzzled. He asked to see the pictures
again. "Ah," he said when the performance was over, "I have it.
They are holding the horses."
Elting Morrison, Gunfire at Sea
Hold Your Horses!
Preserve&
Strengthen
Invent&
Perfect
Unlearn&
Leave Behind
Rethink&
Try Again
Good
Bad
Old New
Changing CultureBy Changing Rituals, Habits & Routines
Building a High Performance
Business Culture
Adaptability Pattern..Trends..Market
Translating the demands of the
business environment into action
“Are we listeningto the marketplace?”
MissionDirection..Purpose..Blueprint
Defining a meaningful long-term direction for the organization
“Do we know where we are going?”
InvolvementCommitment..Ownership
Responsibility
Building human capability, ownership, and responsibility
“Are our people aligned
and engaged?“
ConsistencySystems…Structures…
Processes
Defining the valuesand systems that are the basis of a strong culture
“Does our system create leverage?”
What Counts…
http://www.youtube.com/watch?v=6_WAmt3cMdk
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One Hundred Year Old Manufacturing Company
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• First in industry, but declining• Trying to hold on to the past• 1st time in 20 years failed to meet targets• Targeted by competitors• President operationally focused• “We’re a team going down together
One Hundred Year Old Manufacturing Company
Creating Strategic Alignment
Global Purchasing: Executive Team
Global Purchasing: Middle Managers
Global Purchasing: Buyers
Post-Merger Integration
Parent Company Acquisition
Transformation:
GE Healthcare China
http://www.youtube.com/watch?v=yB47wx-b6sY
2002: GE acquired Datex-Ohmeda and entered the anesthesia business. DO was focused on the medium and high-end of the market.
2006: GE acquired Zymed (CSW), a family-run business in Wuxi Zymed had “adopted” their technology from Datex-Ohmeda.
“The organizational structure of Zymed was simple. It had dreams, but no long-term strategy. It had a culture of thrift. It also had good execution,
which was based on a transparent rewards system. In its ten-year history employees benefited a lot financially.”
2007: GE hired Finn Matti Lehtonen as General Manager of LSS in China He replaced Singaporean P.S. Sim, the original GM
“Sim was busily engaged in marketing and sales, He has no time for quality, operations, costs, or other issues.”
2007: Lehtonen, an engineer with over 25 years experience in China He built a team with long experience in GE Healthcare China A few key hires (engineering, sales) from the outside.
GE Health Care China:Entering an Emerging Market
GE underestimated the quality problems that they had inherited and had to stop shipping CSW machines. DO machines were high quality, but assembled at another, separate site in Wuxi. Engineers were too busy fixing quality problems to do the necessary product design work to replace the existing CSW products with new one.
“We have to put about 90% of our engineering resources on maintenance. If I could start from scratch and put 90% of the engineering resources on new product development, we could reduce quality issues by 80%.”
GE Health Care China:Entering an Emerging Market
Leadership Team Managerial & Supervisory R&D
Survey Results: Late 2007
What to Do?
Lehtonen decided to lead with vision. The goal was to inject a strong sense of vision, mission, and strategy into the organization and reshape the mindset of all employees. He held monthly town hall meetings that involved all 180 employees on site to discuss the vision and the strategy map for the organization and for each function.
The culture survey results showed that among the engineers, there were three major issues: lack of customer focus, limited sense of purpose, and little attention spent on capability development. They addressed this issue by sending each of their engineers into the operating room one day each year, to see their products in action.
“When I was in the operating room, the idea occurred to me that if the machine didn’t work, we could harm people. On the other hand, when the operations are successful, I feel proud of my job because I help save people’s lives.”
GE Health Care China:Entering an Emerging Market
Survey Results: Early 2009
2008Leadership Team Managerial & Supervisory
2009
R&D
Leading with process was much harder. The organization had at least three different processes: GE Process, DO Process, and CSW Process. They involved very different mindsets:
“It seems no one realizes how much a good process means to engineers. My understanding is that a good process is like a signpost on the highway. With a good process, you’ll know clearly how to do things… Engineers are people who like to ask “why” and find the answer… But we have neither clear signposts nor people answering the question here… Sometimes you have to spend more than a day doing something that could be done in one hour with out the process.”
“The new GE process is developed based on US FDA requirements. Its level is just too high for our low baseline.”
“A lot of requirements come from EHS (environment, health and safety), HR Finance, and other functions. GE culture is very aggressive. You must close lots of things within a very short period of time.”
“We can’t use the DO process as it doesn’t have a supporting system here. But the new process is not clear. When you get lost with the process and ask someone else, it seems no one knows the direction.”
GE Health Care China:Entering an Emerging Market
Questions & Answers