Culture Change Through Turnarounds

After a scandal or crisis has brought basic assumptions into consciousness and been assessed as dysfunctional, the basic choices are between some kind of “turnaround,” a more rapid transformation of parts of the culture to permit the organization to become adaptive once again, or destruction of the organization and its culture through a process of total reorganization via a merger, acquisition, or bankruptcy proceedings. In either case, strong new change managers or “transformational leaders” are likely to be needed to unfreeze the organization and launch the change programs (Kotter and Heskett, 1992; Tichy and Devanna, 1987).

Turnaround as a mechanism of cultural change is actually a combina­tion of many of the preceding mechanisms, fashioned into a single program by a strong leader or team of change agents. In turnaround situations, the replacement of key people with internal hybrids and/or outsiders combined with major changes in technology become central elements of the change process, as we will see in the next chapters on managed change.

Turnarounds usually require the involvement of all organization mem­bers, so that the dysfunctional elements of the present culture become clearly visible to everyone. The process of developing new assumptions involves defining new values and goals through teaching, coaching, changing the structure and processes where necessary; consistently paying attention to and rewarding evidence of learning the new ways; creating new slogans, stories, myths, and rituals; and in other ways coercing people into adopting new behaviors. All the other mechanisms described earlier come into play, but it is the willingness to coerce that is the key to turnarounds.

Two fundamentally different leadership models have been promul­gated for managing turnarounds—or, as they have come to be more pop­ularly known, “transformations.” In the strong vision model, the leader has a clear vision of where the organization should end up, specifies the means by which to get there, and consistently rewards efforts to move in that direction (Tichy and Devanna, 1987; Bennis and Nanus, 1985; Leavitt, 1986). This model works well if the future is reasonably predictable and if a visionary leader is available. If neither of these conditions can be met, organizations can use the fuzzy vision model, whereby the new leader states forcefully that the present is intolerable and that performance must improve within a certain time frame but then relies on the organization to develop new visions of how to actually get there (Pava, 1983). The “We need to change” message is presented forcefully, repeatedly, and to all levels of the organization, but it is supplemented by the message “and we need your help.” As various proposals for solutions are generated through­out the organization, the leader selects and reinforces the ones that seem to make the most sense.

This model is obviously more applicable in situations in which the turnaround manager comes from the outside and therefore does not ini­tially know what the organization is capable of. It is also more applicable when the future continues to appear turbulent, in that this model begins to train the organization to become conscious of how to change its own assumptions as part of a continuous adaptive process. Turnarounds usu­ally have to be supplemented with longer-range organization develop­ment programs to aid in new learning and to help embed new assumptions. Embedding new assumptions in a mature organization is much more diffi­cult than in a young and growing organization because all of the organization structures and processes have to be rethought and, perhaps, rebuilt.

Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4^th edition.