A lot has been said and written on the subject of organisational culture and change. Many theories have been pedalled and valiant attempts to change companies recorded. Yet most major change fails to deliver the value promised at the outset*.
The more I have learned over my career, the more I have come to appreciate just how bloody difficult it is to change culture. However, I have never thrown in the towel because, before I immersed myself in books about lofty theories and sad tales of failure, I was involved in a hugely successful culture change…I didn’t realise at the time that it was a ‘culture change’ as it just seemed like the sensible thing we needed to do to turn the business’s fortunes round. Yet, it has informed my thinking, and Rambutan’s approach to culture change, more than anything else in my career. We have now helped so many clients use a similar approach to get results through culture change that our work in this area is covered by our guarantee. Let’s go back to where this story started…
I was an area manager at the time. It was 1996 and after 25 years of profit growth (a FTSE record at the time), Iceland was struggling with the effects of more intense competition as superstores were permitted to open on Sundays for the first time. The inevitable profit warning came, the doomsayers waded in to pronounce imminent death and I said to myself “What have I done?” having just joined the business from the then darling of retail, Tesco.
It turns out the end wasn’t nigh. In fact, the business changed and grew stronger. The culture shifted from what would now be described as ‘command and control’ to an empowered, customer-centric one, and the process and experience of change had all the hallmarks of good practice that I still use today.
There was a burning platform provided by the profit warning and the increasing threat of the bigger supermarkets. There was a compelling vision: to be recognised as the retailer that delivers legendary customer service. It was led from the top…the board were trained first before they trained their teams and this approach was cascaded all the way to the front line. The Gandhi quote, “Be the change you want to see” is frequently used in the culture change context. At Iceland it was 100% applied from top to bottom. Policies and procedures were changed to make them underpin the new culture…some old policies were even ceremoniously ripped up, on stage at the company’s management conference, by the legend that is Malcolm Walker (C.E.O. and founder). The final piece of the puzzle was the creation of a reward system that gave a balanced performance rating for all managers. Bonuses were paid for good financial performance but only if this was delivered with strong customer metrics and a constructive leadership style that was measured through a 360° process.
Iceland has had its ups and downs since the ‘90s like most companies and the full story is told beautifully (without pulling any punches when it explains ‘The Dark Ages’) on their website. Other than Rambutan (obviously), it was the most enjoyable part of my career and I love the fact that Iceland has recently been named one of the ‘Best Big Companies To Work For in the UK’ for the 11th consecutive year.
I don’t recall anyone at the time using the words ‘culture change’, but I do recall Malcolm constantly saying, “We need to change the way we do things around here!” A burning platform, a compelling vision and story, led from the top, the board fully involved, leaders role-modelling, processes being aligned and management not being the judge of its own success. My first-hand, first-class experience of a successful culture change.
*Change Management Needs to Change by Ron Ashkenas, Harvard Business Review April 2013 – “Despite the huge investment that companies have made in tools, training, and thousands of books (over 83,000 on Amazon), most studies still show a 60-70% failure rate for organisational change projects – a statistic that has stayed constant from the 1970’s to the present.”