Great Place to Work® is a global authority on building, sustaining, and recognizing high-trust, high-performing workplace cultures. The organisation has created a Trust Model© built on 30 years of research and data collected through their Trust Index© Employee Survey, which is taken annually by millions of employees in hundreds of organisations worldwide. One such organisation is Daimler Financial Services.

In 2015, Mercedes Benz Financial Services South Africa (MBFSSA) scored in the bottom quartile of companies in its Daimler region (Africa, Asia, Pacific). When the survey was repeated in 2017, MBFSSA came 1st in the region! This is a huge cultural turnaround in a very short time. How did they do it?

I interviewed the current CEO of MBFSSA, Joerg Essig, and asked him how he did it. His story is especially encouraging in a country where changing organisational culture is a national imperative. We speak of the ANC, national government, State Owned Enterprises, and a host of organisations in the private sector that are feeling a groundswell of public pressure to change in favour of a more ethical and transparent culture.

An organisation’s culture does not need to be outright toxic in order for change to be desirable. When Essig arrived at MBFSSA, he came into a culture in which there was a lot of hierarchy. “At all levels people had belief in the hierarchy with the consequence that people didn’t speak up, raise their voice or deliver at 100%. We had so much unused capacity. People were delivering at maybe 70 or 80%. There were lots of issues regarding opportunities, race, fairness, credibility and respect.” This situation could probably have continued for years without much negative consequence. After all, it doesn’t sound too awful – and business results were fine. However, various audits revealed that there was insufficient quality and attention to detail.

Any new leader worth his salt will spend the early days, weeks and months of his tenure listening, gathering information and making observations before forming clear opinions and plans. Essig sought and listened to input from people all over the organisation. There were the “official voices” of his managers, and the “unofficial voices” of those in non-managerial positions. Something didn’t add up. There was lack congruence in the information.

Of course, this is completely normal – whenever there is a new leader, you can expect to find that people will craft the message they want that leader to hear according to their own agenda. You will find that there are people invested in preserving the status quo (especially at a senior level), and those who are invested in change – so who do you believe?

When Essig read the comments from the 2015 Great Place to Work® survey, he was able to put 2 and 2 together. It was clear that something fundamental needed to change and that he needed to unite his Exco team around the change. After all, MBFSSA had once upon a time been the benchmark in the wider international organisation.
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Not only did Essig want to see the business reclaim its former glory, but it was also essential to transform the company in order to take it into the digital future and deliver results. “We needed to leave a sustainable legacy. International assignees come for 3 – 5 years, but what they leave behind is not necessarily sustainable. How would we make this transition to a digital future, create something sustainable and not personality-based, in a declining market with this atmosphere? We really needed people to be willing to show up 100%. We were going to need them to dig deep, work awkward hours and be on their toes to move from a mediocre to a high performance culture,” says Essig.
This was not the first time Essig had needed to change an organisation’s culture. He speaks of the fact that his own leadership values are in line with the kind of workplace Daimler Financial Services (the global business) seeks to achieve. The common theme throughout has been the sense that the department or company was not performing at 100%, so the main driver in each case has been the need to deliver results while and through creating a positive culture.

I asked Essig what the key ingredients are in his approach to changing culture:

1.       Make it easy for your people to have lots of personal encounters with you. “Be as close to the people as possible and as time allows. Walk around. Speak to people. Show that you care, that you are interested in them as people and in their business.” This is classic MBWA (Management By Walking Around, as recommended by management guru Tom Peters). “I would ask people about how it was going, what are the challenges, etc. You can’t underestimate the impact that this has on the other leaders. They see what you are doing and start to do some of the same. It is interesting how so many people find this way of leading closer to people’s hearts than commanding. So people jumped on the bandwagon very quickly. Those who didn’t join in discovered they were in the minority and would either face consequences or would take themselves out of the organisation.”

2.       Get your leadership team aligned behind the change. This can be a real challenge to achieve and to sustain. “We had lots of discussions with members of the team who struggled to align; we had to be open and honest and trust them to deliver. We had to give them support and encouragement and a certain amount of choice in terms of aligning themselves with what we were trying to achieve.” In any culture change, those who are unable to get on board often take themselves out of the organisation voluntarily. If they don’t, they need to be helped to leave and move to an environment where they fit better.

3.       Make culture change a project. Essig ensured that a Great Place to Work® project team was put together of people from all parts of the organisation, charged with looking at how systems, processes and structures needed to change in order to align with the desired culture. Make sure that this team is empowered and has a budget. It needs to have real clout.

4.       Talk a lot about what is important. “We have shorter meetings now, but we have more of them. Our monthly Town Hall meeting is an opportunity to share information, celebrate successes, talk about target achievement, people on the move and people development, birthdays and anniversaries. Now I don’t do all the talking any more. I only have a minor part, and all sorts of other people from all levels stand in front of 150 people and lead and moderate the meeting. Project leaders talk about their projects. GPTW people talk about their project. At our 20th anniversary we had a Town Hall with senior international guests. It was entirely moderated and presented by non-managerial employees on a big stage to 200 or more people. I felt so proud of this.”

5.       Celebrate successes. Reward and recognise team members publicly when they do contribute. “You have to speak for your great people so that they get the recognition they deserve.”  Daimler Financial Services has regional and global awards. It has become a feature of the organisational culture that leaders and team members in MBFSSA make compelling submissions about their colleagues for these awards.

6.       Create a family feeling. Make a real effort to include every member of the organisation. Raise their expectations and give them the sense that every one of them can contribute. This was more important in South Africa that in other countries where Essig has worked: “This family feeling does not exist in this society. There is nothing else that brings all of us together.” It was important to create a family feeling in MBFSSA that transcends racial and social divisions. This belonging and family feeling causes loyalty and energy. Where this safety exists people will step out of their narrow job descriptions and get engaged. “Now we have a choir who we use in Town Hall and other celebrations. They run it themselves. You don’t have to do for them – just give support and a budget and they do for themselves. Give them the responsibility and they will fill in the space.”

7.       Be courageous and model the behaviour you are looking for. Essig was looking to create a culture in which transparency and openness are a feature. This meant that he had to demonstrate this openness. “We did some brave things in this context. We had no Q&A. We started a box where people could ask anonymous questions. We would open this publicly and answer questions openly. Some questions were personal and nasty, but we answered as well as we could in the moment. Colleagues found this brave and acknowledged this openness. The box is still there but is empty because people now ask their questions more openly and more appropriately. Now everyone knows how bonuses are calculated, and can see month to month how we are doing – and how they can contribute to target achievement.”

8.       Be consistent. What you start you must sustain. “There are some moments of truth where you have to really walk the talk – it is difficult to recover when you have been seen to not uphold your talk.”

9.       Learn. Understand that you will make some mistakes. “There are always some things that one might do differently with hindsight – people who might be given second or third chances; situations one should have handled quicker or more decisively.” These are learning opportunities for both the leader and the team.

“Changing culture is a lot about ego – you need to be credible, and you are credible if you are authentic. Some people will need to get their ego under control because it can get in their way in terms of connecting with people. You also need to have people around you who will give you honest feedback.” You can’t allow your ego to get in the way with this.

The point of this story is that it is possible to change an organisation’s culture in a relatively short time. What is crucial is that this change be led by a person who is absolutely clear on what a more positive culture looks like, brings a key team of aligned change leaders along for the journey, uses organisational conversations as an opportunity to regularly and consistently keep culture and culture change top of mind at every level in the organisation, and makes sure that desirable behaviour is recognised and rewarded and that people are skilled to act in alignment with the desired culture. This is true regardless of the size of the organisation.
 
Sources and recommended reading:

Great Place to Work®: https://www.greatplacetowork.com/
Harvard Business Review January – February 2018: this issue has several articles on Culture and Culture Change

Everything we do or don’t do leads us towards or away from our vision. Behaviour is not neutral – particularly not behaviour that represents how we do things around here. All endemic behaviours that are observable in organisations speak to the prevailing culture in that grouping.

In South Africa (and we are not special – this is happening around the world), we are confronted with daily headlines that repeatedly remind us that all is not as it should be. We read of the likes of Bell Pottinger and KPMG – stories that describe a company culture that supports and encourages behaviour that speaks to a lack of integrity; our own government appears to be rotten to the core, where corruption and capture are simply how things are done around here; companies that sanction dishonesty in pursuit of market dominance and billings. One can be forgiven for believing that the rot has gone too far and that the patient is doomed to die of gangrene.

Changing the culture of an organisation is difficult, but it is not impossible. If you have been handed what appears to be a poisoned chalice – think of Cyril Ramaphosa, who appears to be sincere in his wishes to clean up the ANC, and Nhlamu Dlomu who has been afforded her own special opportunity to fly KPMG, South Africa – you will need to think very carefully about what it will take to bring about the change that is required to restore trust in your brand and create a positive culture.

This is not the preserve of the seriously tainted organisation either. Successful organisations with strong brands can also succeed despite the prevalent negative leadership culture. Think of those companies you have dealt with or heard of that are leaders in their markets, but scratch beneath the surface and you may find a culture in terms of which “the way we do things around here” is experienced negatively by those inside the organisation. Perhaps executives get away with being bullies, going after colleagues who they perceive as opponents (or on the other team) even to the extent of sabotaging them and their careers; and companies where the only managers who get ahead are those who kick butt and take names – even if there are more positive leaders who achieve real results without ruining lives. What about those companies where the Financial Director is expected to “massage” the results in order to tell the board what they want to hear? You can be sure that this extends to all other parts of the organisation where people at every level have learned to be creative in their reporting in order to ensure that the higher ups only hear what they want to hear – for to hear the truth would incur intolerable wrath and end careers.

I believe that these examples of negative company culture can be found in most companies – even if only in pockets – and the price will be paid, whether it is in the form of some scandal, broken employees, low morale or declining results.
So what is to be done? In this series of articles, I will discuss what can be done to turn a negative culture around and create a way of doing things around here that is constructive, healthy and worthy of pride, while delivering results. Let’s be clear, culture is driven from the top – be it the leader of an entire business or the leader of a junior team. The leader creates and drives culture. The leader shows the rest what behaviour is desired and what will be rewarded. You cannot change culture from the middle – it has to start at the top.

To start with, it is important to take stock:

1. What is your personal value system? How do you believe people should be treated – colleagues as well as customers? What are your beliefs about how people should go about achieving results? What do you believe it takes to get people to perform – do you have to be tough on people or do you need to be tough on task while being supportive of people?
2. What have you noticed and why does it trouble you? What are the behaviours you have noticed? What language is used? What do you think it is causing or supporting that behaviour?
3. What would you prefer to see? What currently mitigates against this? How are people rewarded and punished, and how does this mitigate against more desirable behaviours? Is your own behaviour consistently congruent with the culture you would like to create? If it isn’t, you need to start with yourself! 
4. Who do you have around you? Whose behaviour exemplifies a more desirable culture? Whose behaviour emulates the undesirable culture that you see? Of these people, who do you think might be behaving in this way in order to survive, rather than because this behaviour squares with their own beliefs and values? Who might you enrol as collaborators with you? Who else? And who else? Who are the opinion-leaders around here? How might you enrol some of them? How will you enrol them? This enables you to create a team that will drive the change you seek to achieve.

Changing culture is not so different from any other change in an organisation. This model from John Kotter and Dan Cohen’s Book, The Heart of Change – Real Life Stories of How People Change their Organisations, illustrates a typical successful change process:​