1. automotive and vehicles
2. cars
3. car culture

Booz & Company
Kuwait City, February, 2011
Presentation Document
Culture Evolution - How to Work With
Your Culture to Drive Performance
3rd Annual STC Group Human Capital Forum
Kuwait City
This document is confidential and is intended solely for
the use and information of the client to whom it is addressed.
Outline for Today’s Discussion
 The why and what of culture and culture evolution
– Why culture matters
– What is culture
 How can we work with and within our culture - to win in the market?
– Key imperatives for culture evolution
– Case examples
 Additional lessons learned
– Key points for HR executives
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February 2011
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1
Agenda
 The why and what of culture and culture evolution
 How can we work with and within our culture - to win in the market?
 Key lessons learned
Booz & Company
February 2011
11-0216 Booz.Culture Evolution.STC HC Forum.for pdf.ppt
Prepared for VIVA/ STC Group Human Capital Forum
2
The why and what of culture
There is no shortage of transformational business challenges
facing ME companies
Key Trends
Business Implications
 Globalization
 Large scale transformation
 Liberalization of markets
 Performance improvement
 Regional economic agreements
 Operational enhancement
 Financial markets development
 Shift in priorities
 Global economic crisis
 Restructuring, M&A
 Flight of expert human resources
 Talent development and recruiting
 Digital economies
 Business in real-time
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The why and what of culture
Meeting these challenges and achieving business transformation
will require programmatic initiatives…
Key People Imperatives
NOT EXHAUSTIVE
Linking HR strategy and
people programs to
business strategy
Aligning pay and
performance
Developing effective
leaders and managers
Attracting, engaging, and
retaining critical talent
Creating a culture that
drives innovation,
growth & breakthrough
performance
Booz & Company
February 2011
Rewarding employee
behaviors that drive
business results
… and
recognition that
the success (or
failure) of each
of these will be
impacted by
“culture”
Building differentiated
organizational capabilities
for competitive advantage
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The why and what of culture
Cultural forces have immense power to enable transformation and
strategy advantage -- or to derail it
Organizational Culture Analysis & Company Peer Performance
26 Companies
Indexed EBIT
Performance (1)
Higher
Performers
+1,0
+0,5
Average
60
65
70
75
80
85
Organizational
Culture Score (2)
-0,5
Underperformers
-1.0
“Middle of the
Road”
1) Company Performance relative to EuroStoxx Sector index; result >0 means outperformance; considered time interval:10 years
2) Results of an analysis of company values performance, researched jointly by Bertelsmann foundation and Booz & Co
Source: Booz & Company analysis, Bertelsmann Foundation
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February 2011
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The why and what of culture
So how can we define culture – and do so simply and practically?
A Practical Definition of Culture
“Selfsustaining”
because culture
has inertia
We Say an Organization’s
Culture is …
…its self-sustaining patterns of
behaving, feeling, thinking, and
“Behaving”
because what
people believe
is reflected in
their behaviors
Booz & Company
February 2011
believing – that determine …
…“how we do things around here”
^
really
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“Patterns”
because
repetitive
elements make
up culture
“Feeling,
thinking, and
believing”
because both
the emotional
and rational
side matter
6
Agenda
 The why and what of culture and culture evolution
 How can we work with and within our culture - to win in the market?
 Key lessons learned
Booz & Company
February 2011
11-0216 Booz.Culture Evolution.STC HC Forum.for pdf.ppt
Prepared for VIVA/ STC Group Human Capital Forum
7
Working with and within your culture
Four key imperatives can help practitioners implement culture
change efforts in their own organization
1
Leverage the existing
culture as a powerful
source of energy
4
Use formal, informal
(and viral) means to
motivate behavior
change
3
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February 2011
Practical
Culture
Evolution
Ensure culture is visibly
aligned with the
strategy and operating
model
2
Target for change the
critical few behaviors
for pivotal populations &
roles
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1
1
Leverage existing cultural strengths
4
2
3
Case Example: Working ‘with’ your culture by selectively keeping
and building on the existing foundation
CLIENT EXAMPLE
Leading Retail Company
How to Build on Cultural Strengths
“Keep and Nourish”
–
– “Diminish or
Eliminate”
+
+
“Add or Build”
=
=
Impact
Commitment to
hitting the numbers
Focus on only own
BU
Increase information
flow
Integrated offerings
for customers
Supportive and
respectful
interactions
Avoiding constructive
disagreements;
hierarchical (familyowned)
Directness and
candor; leadership
from all levels of org
Improved problem
recognition and
problem solving
“Can do” attitude
and ability to
mobilize resources
“Hoarding” talent within
org silos; reactive
organization;
Proactive HR planning
and prioritization (e.g.,
rotations)
More developed,
engaged and
versatile workforce
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1
2
Link culture with strategy and operating model
4
2
3
Case Example: Linking change in strategic and operating landscape
to evolving your culture
How a Company Wins in the Market
To address
deregulation,
increasingly global
competition and
increasing customer
expectations…
E.g., enable informed
local decision-making to
get closer to customers;
monitor and reward
innovation performance
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February 2011
Coherent
Business
Strategy
E.g., build first-to-market
customer-centric offers
E.g., Promote innovation
and entrepreneurship by
providing more autonomy
to individuals and by
promoting cross-OpCo
collaboration
Strategy, Culture and
Operating Model Tightly
Linked and In Sync
Operating
Model
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CLIENT EXAMPLE
ME Telecom Client
Culture
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1
3
Target the critical few behaviors
4
2
3
Case Example: Translating ‘values’ into behavioral specifics
ensures concrete actions drive culture evolution
CLIENT EXAMPLE –
HIGHLY SIMPLIFIED
Specific Behaviors for Target Population
Target Population for
Culture Intervention
Current Culture
Behavior Realities
Future Culture
Behavior Implications
Customer Service
Insights between
customer channel
departments not shared
Use regular crossdepartmental insight
sharing sessions
Marketing
Cost management
prioritized over
relationship mgmt.
Run all decisions
through a “client is
always right” lens
Customer data captured
sporadically and
incompletely
Get updates from
salespeople and update
CRM regularly
Service expediency gets
rewarded
Reward service
excellence
etc.
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February 2011
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1
3
Target the critical few behaviors
4
2
3
Case Example: Developing a concrete, vivid articulation
of critical behaviors for targeted groups enables successful change
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February 2011
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1
4
Use formal, informal and viral means
4
2
3
To activate critical behaviors, we employ a reinforcing
mix of both formal and informal elements
Strategy
Tone Set by Senior Leaders
Reporting Structures & Decision Rights
Manager-Employee Connections
Policies, Processes and Metrics
Shared Values
Recruitment and Selection
Pride and Motivation
Training and LD/OD Programs
Informal Networks
Performance Management/ KPIs
Communities and Common Interest
Leadership Development
“Culture Carriers” and Change Agents
Compensation
Artifacts
Internal Communications
Formal
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February 2011
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Informal
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1
4
Use formal, informal and viral means
4
2
3
Case Example: Bell Canada “built a movement” to drive
transformational change in an entrenched incumbent culture
Cultural Intervention Program
2005
500 members
2004
14 members
2008
2500 members
“Members”
75 members
4
“Participants”
“Chapters”
1. Formation
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February 2011
2. Self-Sufficiency
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3. Preparation for
Scale
4. Growth to FullSize
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1
1 2 3 4
Tie it all together
4
2
3
Aetna illustrates how a range of programmatic elements come
together to achieve one of the most notable US turnarounds
$48.40
(Jan. 31, 2006)
750%
Share Price Performance
650%
550%
450%
350%
250%
150%
Developed Strategy Council
and new customer focused
strategy
Strengthened
Senior leadership
team effectiveness
Created Council
for
Organizational
Effectiveness to
support culture
change
Raised price/ dropped
four million
(unprofitable)
customers
Implemented
new customers
oriented strategy
Created all
employee
survey and
follow-up plan
New leadership
put in place
Designed
CEO
Transition
Enhanced front line
productivity and
motivation with
targeted initiatives
Focused on
management process
Created Aetna
Way Excellence
Awards
AET
Developed,
launched
Aetna Way
Launched “Pride
Builders” program
Refined organizational
structure for the Regional
Businesses Segment (1/2 of
company revenues)
50%
S&P 500
-50%
Period of advisory to Jack Rowe
$5.92
(May 29,
2001)
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February 2011
Survival
New Team
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Implementation
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Leadership
Transition
15
Agenda
 The why and what of culture and culture evolution
 How can we work with and within our culture - to win in the market?
 Key lessons learned
Booz & Company
February 2011
11-0216 Booz.Culture Evolution.STC HC Forum.for pdf.ppt
Prepared for VIVA/ STC Group Human Capital Forum
16
Additional lessons learned
A set of additional lessons separate “winners” from the “also-rans”
Lesson
Key points for HR practitioners
Do “culture work” in the
context of “real work”
• Co-lead initiatives linking performance and engagement to identify the critical values,
associated behaviors and metrics for evolution
• Avoid theoretical workshops - instead hold practical problem solving sessions and pilots
Integrate HR’s ‘typical
remit’ with culture efforts
• Tie performance management to the changing culture and strategy - create a sense of
accountability and motivate high performers
• Attract and retain top talent with employee value propositions linked to target behaviors
• Align training and career development with underlying culture evolution efforts
Recognize the critical role
of leaders & mgmt
• Ensure the executive team own the culture and the people agenda – get their
endorsement and ensure transparency; work with business leaders and not beside them
• Help leaders see and feel consequences of their behavior; collaborate on symbolic actions
• Use leadership development to focus on target behaviors and networking
• Introduce best-in-class corporate governance processes
Work on behavior at
multiple levels
• Design the organization to mobilize elements of informal network
• Widen ME best practice in relationship networking to locate/ leverage your key networkers
• Focus on engagement, motivation and pride in the day to day work at all levels
Utilize rich two-way
strategic communications
• Build employee voices into efforts - tap key change agents and “motivational managers”
• Avoid the trap of change happening “to” employees as opposed to “with” and “by” them
Recognize that culture is
fundamentally local
• Balance the need for homogeneity with the reality - and strength - of diversity
• Keep regional and functional sub-culture in mind for new roles and responsibilities,
particularly given the diversity within ME companies
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February 2011
11-0216 Booz.Culture Evolution.STC HC Forum.for pdf.ppt
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Q&A
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February 2011
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Appendix
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February 2011
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While culture interventions look different given a particular
context, we favor a rigorous culture intervention framework
Culture Intervention Framework
3
Business Objectives
1 Culture FROM and TO
Understand the culture
today and tomorrow, and
identify cultural gaps and
cultural strengths
2 Critical Few Behaviors
Booz & Company
February 2011
Culture Intervention Program
Design a tailored culture intervention
program using formal and informal levers,
focused on changing critical behaviors
(mindset/culture change will follow)
Formal
Approaches
Informal
Approaches
Identify the critical few
behaviors that will make
the biggest difference
toward your cultural
aspiration
11-0216 Booz.Culture Evolution.STC HC Forum.for pdf.ppt
Outcomes
People
change
behaviors,
mindsets
follow
Improved
business
results are
evident
Organization
sustains the
change over
time
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Remember that your culture includes some behaviors to capitalize
on, and others to counter-balance
CLIENT EXAMPLE
Make the Most Of …
Counter-Balance …
Speed
Cost Focus
Entrepreneurial
Spirit
All “Good
News”
Committed
People
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February 2011
Decentralisation
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Middle
Management
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Internal
Focus
21
Leaders at all levels have a role to play in motivating performance
and change
Leadership Needed at Each Level
Senior
Leaders
Booz & Company
February 2011
 Champion, direct, and align behavior change priorities
 Demonstrate visible commitment by getting involved in the
work formally and informally
 Learn from others down the line and visibly model changes
Middle
Management
 Serve as problem solvers and enable scaling through wellstructured and actively networked roles
 Need to be willing to change their ways and be part of the
solution
Front Line Leaders
 Engage individuals in highly personalized way, creating
emotional commitment
 Translate top-down messages into messages that resonate
with the front line
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Organizations that use both formal and informal organizing
elements together are most successful
Top Leaders
Vision
Commitment
Values
Integrating
Mechanisms
Pride
Emotional
Commitment
Motivation
Alignment
Rational
Compliance
Strategy
Purpose
Team
Members
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Pride-builders and other exemplars can positively influence
behaviors and beliefs, fueling viral change
Pride-Builders and Other Exemplars
PrideBuilders
Pride-builders draw
on the unique
sources of
motivation of those
with whom they
work, building pride
in the work itself
and producing
great results
Fast Zebras get
things done
informally without
being devoured by
“formal predators.”
They adapt to
changes quickly just like a zebra at a
watering hole on the
savannah
“Fast
Zebras”
Change agents want to
make a difference in
how the broader
organization works,
take risks to champion
causes they believe in
and act beyond the
boundaries of their role
Influencers
Agent diffuses
new behaviors
Change
Agents
Change
Exemplars
Peer is not
affected
Influencers are
disproportionately
influential in
shaping the
attitudes and
perspectives of a
community of
people
C
Peer imitates
behaviors and
becomes new
agent of change
New behaviors
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A
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B
Peer
imitates
behaviors
Social links between
colleagues
24