How New CEOs Can Adapt To A Company Culture and Carry Out Culture Shifts?
Imagine that you have been hired as the new CEO or Executive Director of an organization. Without a doubt, you have undergone an extensive drill in the form of exhaustive interviews with key stakeholders and reviewed a ton of qualitative and quantitative data the company has shared with you during the Executive Search process. So, it is likely that you have a fair idea as to what kind of an organization you are going to lead.
Changing an organization’s culture is nothing short of a Himalayan task, and the situation worsens if you are hired as the new CEO for a well-established Multinational Conglomerate. Also, the pressure is mounting as the employees begin to expect some level of change in the culture along with the entry of a new CEO, even if change wasn’t exactly a mandate during the hiring process.
A wise move here is to try and adapt to the organization’s current culture while slowly assessing every aspect on the go and make shifts gradually yet progressively. This is easier said than done, but worry not, as we decode the steps to carry out culture change effectively.
Dissect the Company’s Organizational Model
The first thing you need to do as the new CEO is to assess your organization’s culture and observe what they follow as mandates.This step is of utmost importance and skipping this step can lead to larger repercussions. Here are a few organizational models that companies of today follow to get you started.
The Mechanistic Model
Some companies are mechanistic in nature – here, the people are viewed as integral cogs in a machine. In this case, more often than ever, the employees seek a leadership that is based on an organizational chart and a focus towards extrinsic motivations like raises and bonuses are key features of an organization with a Mechanistic Model.
For example, McDonald’s is an organization that has a highly mechanistic structure. If you look at it from a microscopic perspective, you can decipher that all the tasks performed in the organization are highly repetitive at every McDonald’s joint. They have a vertical chain of command from top to bottom and decision-making is highly centralized with the top management.
The Organic Model
Some companies can be organic by nature. In this case, the company considers itself as a living, social organism. Responding positively to intrinsic motivations of the employees by fulfilling their deepest professional desires and aspirations is fundamental to the company’s success. In this type of organization, the leadership needs to transcend beyond being just transactional. The leader here must strive hard to earn the authority and respect through the consensus of their subordinates.
One stellar example of an organization with an organic model would be undoubtedly Google Corporation. At Google, the employees are encouraged to put their creative skills to use for problem solving and development of new products and services. In this culture model, employees are more goal-oriented as opposed to being job-oriented and empowerment is encouraged from all levels of the organization.
The Anthropological Model
A few companies follow the anthropological model. Here, on top of fulfilling the intrinsic motivations of your employees, the leader must also possess stellar social values and prepare themselves for charismatic and transformational leadership.
Forge Trust With Your Employees And Empower Them
Once you have figured out the organizational model, it is now time to get involved personally with your employees and put your interpersonal skill set to use. Of course as the CEO of a large conglomerate, you might not get to interact with all your employees, but it is imperative that you do strike up as much conversation as possible. Encourage your employees to take decisions and be accountable for their actions. Make sure that even the Junior-level employees are given freedom to learn, grow and act. The idea here is that if they know that a CEO trusts them, they naturally feel empowered.
Talk Culture With your Senior Managers
Remember that the company culture starts from the CEO and works its way down through the CEO’s messages to the senior management team. Organize discussions through your humility, vulnerability and openness while fully optimizing the brainpower in the room, allowing the senior leadership to weigh in on the conversation. Discuss what you have in mind in respect to the culture you expect at work and brainstorm with them. Try and strike a balance between the culture you want and the culture they have and arrive at a consensus. This works both ways, as the CEO will be perceived as a person who takes their employees’ opinions seriously and also makes the senior leadership team feel more secure and valued.
Focus on Results and Not The Process
Once you have a clear roadmap as to what exactly needs to be done and get down to the nitty-gritty of changing the company culture, obviously you are going to encounter some resistance along the way. You needn’t immediately retaliate by forcing the change down their throats and there could be a simpler way.
For instance, Scott Lynch, the CEO of American Boiler Manufacturers Association faced a similar resistance when he was in the middle of a culture change. In the process, he naturally had some pushback from some of his staff and instead of pushing back harder with the weight of his CEO title, he sat them down and promised that if the new approach didn’t work, he would go back to the old regime. The “only if it works” approach from the CEO garnered him respect and reduced the resistance significantly.
Also, it is equally important to resist yourself at times and specifically speaking, the urge to insist on doing things exactly the way you want to. Acknowledging that your subordinates might be right is also an important trait of a CEO.
Culture Shift 101 from Tata’s New CEO N Chandrasekharan
A living example of culture shifts that is worth learning from is the phenomenon of N Chandrasekharan, the current and only non-family CEO of Tata Sons. When he was hired as the conglomerate’s new CEO, he inherited a set of companies that were bleeding. The Tata Motors domestic business was dwindling and its steel counterpart was muddled in disputes in Europe. And adding to it, Tata Power had mountains of debt due to the losses suffered because of the Mundra UMPP Project.
Soon after taking the reins in his hands, he embarked on a journey to make the company more structurally sound and organized. He took it upon himself to explain three simple concepts to his employees: Simplify, synergize and scale.
Previously, the organizations had a lot of verticals, which meant a lot of time, energy and effort wasted on what could be one consolidated, functioning unit. He merged similar verticals such as Aerodynamics and Defence together into a single entity to make the organization’s function much simpler.
Unlike before, all the companies under Tata Group must work together in tandem where it made business sense to support each other’s causes. For instance, the Tata Motors recent foray into EV technology is totally self-sustained with the help of Financing from Tata Capital and Charging Infrastructure from Tata Power.
The modus operandi is quite simple here: high scale and high growth to achieve maximum expansion of companies and their associated businesses. N Chandrasekharan has not just set these concepts theoretically, but has also gone ahead and implemented them practically. Under him, there were eight company mergers for successfully launching an ecosystem for electric vehicles. Additionally, Tata Chemicals and Tata Global Beverages were merged to form a single company Tata Consumer Products – the company is a flourishing success, with its stocks rising to over 300% since 2017.
Remember that there is no such thing as the “perfect” company culture, but once you feel what works for your organization and what keeps your employees love coming into work, find ways to maintain the same and continue on a development trajectory. Leading by example and becoming an embodiment of the culture that you want your employees to follow will set the tone for the organization and the employees you lead. Let’s talk!