With the painful memory of Madonna’s Super Bowl halftime show finally fading, the past NFL season offers some clear lessons on changing the culture of an organization.
The new coach calls his staff into the office. “I want to change the culture here.”
“OK. What do you want it to be?”
Every new leader wants to put his or her stamp on the culture. Without fail, HR designs a jaunty PowerPoint deck proposing everything from cumbersome initiatives to trivial gestures too quickly forgotten; Implement a more rigorous goal-setting process, serve better food in the cafeteria, put foosball tables in the break room, replace the worn sofas in the lobby. If the goal is to increase performance and achieve greater results, these kinds of changes won’t get it done.
This year’s Super Bowl participants have clearly created positive, productive cultures and sustained success over a long period of time. Between them, the Giants and Patriots have won 5 of the last 12 Super Bowls. They are the Google and Zappos of their industry.
More illuminating though is what has happened in San Francisco—where culture went seismic. Despite their glory days of the 1980s and 90s, the 49ers were one of the worst teams in the NFL over the previous decade. The 2010 season was a low point with just six wins. Cash-strapped and reeling, the 49ers made one major change—hiring new head coach Jim Harbaugh.
Harbaugh was a decent quarterback during his NFL playing days, but has thrived as a head coach, turning around losing programs at the University of San Diego and Stanford. In their first year under Harbaugh, the same 49er players that went 6-10 a year before, finished this past season 13-3, won their division, and took the championship-bound Giants to overtime, falling just short of the Super Bowl.
The lobby furniture is the same. The food is the same. No PowerPoint deck was necessary, yet the culture in the 49ers locker room and around the offices is vastly different.
Matt Doyle, the Stanford football operations director who once worked with Harbaugh every day said, “He once told me that every decision he made was going to be for the good of the team, said that I might not agree with some of the decisions or staff members might not agree, but it was going to be for the good of the team. And he was right.”
Harbaugh preaches team unity. His players say they know he has their back. He reportedly eats in the cafeteria with the team and sits in coach class with the players on team flights, leaving his first class seat empty.
Try to remember the last time you saw your CEO in the cafeteria, or sitting in coach. Nevermind meals or travel, when is the last time you saw the CEO at all?
A recent study by FTI Consulting showed that the biggest driver of opinions of a new CEO is his or her track record of execution.* When a highly-respected corporate turnaround expert was hired as CEO of a flailing technology giant a few years ago, he announced to the employees that his door was open and he was ready and willing to have a dialogue with employees—that he was one of them. Soon after, he had the executive office suite gutted and renovated as a protective bunker, complete with blast-proof walls, bulletproof glass, a private entrance, and a gated, walled-in parking lot. Any credibility and trust he was given by the employees coming in, was undermined.
A quick internet search will turn up dozens of companies that have announced layoffs, restructuring, and downsizing within weeks of handing the CEO a hefty performance bonus. Levels of trust in leadership? Gone.
If there is one thing that stands in the way of changing the culture of an organization, it’s executive hypocrisy. Culture is changed by example. When everything the CEO says and does is focused, aligned and consistent, employees pay attention. When actions match the words, employees notice. When they don’t, employees notice that too.
The same FTI study shows that investors expect new CEOs to set a strategy and establish expectations in the first six months. That’s the easy part. Executing that strategy and meeting expectations is where many CEOs stumble. Regardless of the company’s mission statement or the posters in the break room, culture starts in the CEO’s office, just as it does in the coach’s. Employees, like players, watch and follow.
Last spring, Harbaugh agreed to spend a day at the headquarters of an iconic but struggling Silicon Valley company, to share his take on success and winning. Morale was anemic, leadership was derided in the press daily, and the culture was passive and complacent. Harbaugh embraced the chance to help a company that employed hundreds, if not thousands of 49er fans, just down the street from his new office. A buzz began to build across campus about Harbaugh’s appearance, but when one of the company’s top executives was presented with the idea, he squashed it, saying he was “not into football.”
Too many corporate leaders don’t understand that changing the culture isn’t about parties and PowerPoint. Culture is shaped by every decision they make. The tone is set by their words and cemented with their actions, every day—when the CEO establishes a strategy and follows it, sets rules and abides by them, not only says he or she is “one of us,” but acts like one of us. The culture of an organization will change only when every decision made by the leaders is in the best interests of the organization, even if it’s not in the best interests of the leaders.
*CEO Transitions and the Risk to Enterprise Value, FTI Consulting, Inc., 2012; www.ceotransitionstudy.com.