Last week I conducted a leadership program for a group of senior managers in an internationally operating company in Vienna. Participants came from 7 countries: Belgium, Turkey, Finland, Sweden, the Netherlands, France and Austria. Among the many themes we deal with in such a week, the topics of ‘managing change’ and ‘designing strategy’ were prominent. And in spite of all the exercises, small group work and self-reflection, we had a lot of discussion in the plenary group about involving people in decision making or not.
Below model was used: it illustrates the increased level of engagement that can be expected when increasing the involvement of employees in creating a shared vision. The traditional ‘Tell and Sell’-model is on the left, where a new strategy is designed by a small group of company staff, decided by the Board and then communicated to employees, expecting them to follow the new guidelines.
On the right hand side a ‘new’ model emerges, where strategy is created in an on-going cycle by everyone in the company. In this dynamic process both leaders and workers are involved for their unique views of the company and its challenges. This co-creation model is used by more and more companies these days, although the majority still resides on the left. To oppose the ‘Tell and Sell’ we may call this approach the ‘Hear and Fear’ model: leaders in the company will need to listen to inputs they receive, handling their fear that they loose their power and status when suddenly ‘everybody can do strategy’. Making the change from left to right will be ‘out of comfort zone’ for any leader who is used to the traditional model.
The discussion we had in the group was about the cultural influences that determine the way strategy is done in the company. In many cultures, being in the best position to design strategy is a matter of power and status whereas, in other cultures, your influence is largely defined by your personal capability to influence people, or by your technical competences and skills. In cultures where hierarchy in the workplace is taken very seriously (high-PDI), it is obvious that you have to be high in the hierarchy to be able to define the direction of change. These are high-PDI countries (Russia, China, France) or countries with low to medium power distance in combination with high uncertainty avoidance (Germany, Austria, Switzerland). Employees from these countries will not use their personal influence to change the way of working when they do not have the formal power. The situation where any employee can drive change “as long as he has good ideas and makes these heard” is not understood in these cultures: it is simply not your role and not in your power to be involved in important major tasks like initiating change.
In other countries – generally characterized by low power distance in combination with high individualism, such as the US, Canada and Australia – any person can decide what the desired state should look like. The assumption is that you do not need a formal position to be able to influence the direction of the company, but that everybody can do so. And as the subset of this category we find the countries that score low on masculinity, such as the Netherlands and the Scandinavian countries. Here we see a reluctance (or even skepticism) to believe that management can define what is good for the company. Employees in these cultures will expect to be seriously involved in defining the change, and they will speak up clearly if they are not properly involved. The success of change will be determined by the involvement of employees in the creation process.
The above can be seen as the ‘paradox of change’: should the change process be participative or should it be driven top-down? Participative change assumes that the workers in the organization collectively know more and have better vision on the effectiveness of work processes and are therefore better to decide on the change. Top-down change assumes the top can best oversee the necessity for change, and therefore is in the best position to decide. The two views however are not mutually exclusive, but should be complementary. Some organizational change is driven by external necessities that are not visible deeper down in the organization, and it requires senior management with a wider perspective to see the ‘burning platform’ that makes change necessary. Such larger change processes may require change in cross-divisional work processes, and the initiative for such efforts is usually beyond what can be expected of individual contributors. Other change processes benefit from the collective knowledge on details of work processes and can only become successful when a large number of individual, relevant contributors participate in designing the change.
When multiple sites and divisions of the company – each with its own national and company culture – are involved in the change process, a mixture of the two styles of change is essential. The complexity of multi-site projects will require managers with sufficiently broad scope to oversee the total: individuals that serve the interest of one division or site will hardly ever be able to weigh all interests and choose optimal solutions, as this may mean compromising or giving up the interests of the organizational unit they represent. At the same time, once the required change has been defined and individual work processes need to be re-engineered and optimized, the input of many skilled individual workers will be required to ensure success. The manager driving the change process should have the skill to manage his stakeholders and align top leadership on each of the steps of the change processes, as well as the capability to motivate specialists at lower levels of the organization to contribute to the change. Not every manager has these skills.
For a manager implementing change, it is important to realize the extent to which individuals expect to be involved in the change process:
- Involve them at a very early stage, solicit their input, and make them part of taking decisions (the Netherlands, Scandinavia).
- Involve them in an early stage in order to get the right (expert-based) opinions, although management make the final decision and does not have to justify these decisions publicly (Germany, Austria, US).
- Involve them in a later stage after all decisions have been taken, set a clear course of action and give instructions for deployment (Mexico, China, India).
The manager should decide which of these approaches fits the company culture best, and examine the expectations of the national cultures involved in the change process. It is clear that you cannot satisfy the cultural preferences of all, but it is good to go through the mental exercise of understanding cultural expectations before defining and deploying a change initiative.
Above discussion has partially been published in my book Managing Through a Mirror, where more can be found on managing change across cultures. For a free download of chapter 1 of the book, click here.