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“If you can embrace the fact that you are probably wrong half the time, it will open you up to ideas that can transform your organization.”
–Ed Catmull, p. 124
DEAR EXECUTIVES, We have two requests for you. First, stop relegating your cultural change programs to HR. Start adding them to the top of your leadership agenda. And second, stop blaming others if your attempts at culture change don’t stick. Start shifting your focus to how you and your colleagues behave.
In our work with leading organizations, we are seeing a growing divide between the rhetoric of leaders and their actual behaviour. In their words, they are ‘eager to abandon the conventional, command-and-control model.’ They want to change the narrative. They use popular words like purpose, psychological safety, empowerment and tolerance for failure. But in practice, these buzzwords are frequently not reflected in their daily actions and attitudes.
Recently, an executive of a large utility company praised the importance of psychological safety during a half-day workshop we organized with his team. A couple of hours later, he was telling his team what needed to be done, leaving no room for discussion. Unfortunately, this happens more often than not. Too many executives aren’t walking the talk. And the more inconsistent their espoused val-
ues are with their actual behaviour, the harder it is to fight employee cynicism, disengagement and dissatisfaction. So, what should executives do to avoid perpetuating ‘culture theatre’?
Mixing our consulting experience with the research of Harvard Business School Professor Gary Pisano, we have developed a practical approach to help leaders lay the foundation for successful cultural transformations. At the heart of our ‘culture change recipe’ is what we call the Leadership Social Contract, a set of actionable behaviours that leaders must commit to either stop doing, start doing or keep doing. Our approach follows three main steps:
1. Measure concrete behaviours rather than abstract values;
2. Select specific behaviours to stop/start/keep doing; and
3. Live these behaviours in practice.
Let’s take a closer look at each.
Why shift the focus from abstract value statements to concrete behaviours? Simple: because they are observable and measurable. In 2021, we surveyed over 3,000 executives
Our 30 questions were clustered into five main dimensions (each with two polarities)
Bars indicate respondants who ‘agree’ or ‘strongly agree’ with their company’s propensity for each element
from large industrial, life sciences and chemical companies in the U.S. and Europe. For each level of the organization, participants anonymously evaluated the behaviours of the leader they reported to. Some companies applied the evaluation to individual leaders (with their acceptance) rather than at a category level, which made the analysis more powerful, specific and actionable, reducing the typical dilution of general surveys.
The assessment covered 30 concrete behaviours organized around five main dimensions of innovative cultures: collaboration, psychological safety, empowerment, attitude toward failure and experimentation. With survey results, each leader could identify the key imbalances and improvement areas. They also looked at how demographics both within and across teams compared.
The survey allowed, for example, chemical manufacturer BASF to confront the challenge of a substantial lack of giving candid and frank feedback rather than muffled criticism. Comparison of scores in different areas, functions and layers helped the company identify areas of opportunity to focus on. “One of the key findings for us was the need for more candid and open discussions at gate meetings of the innovation funnel, in order to determine measures for providing further important insights,” recalls Helmut Winterling, a senior vice president at BASF. The company was able
to track real progress by quantifying its ‘leadership behaviour shift’ and launched further targeted actions. By pulling together the survey data, each participating company could also compare its own positioning against the benchmark, deriving common patterns or differences. For instance, candour was a common challenge across companies (see Figure One), with most leaders falling short on that dimension.
Some companies went further and applied the survey more granularly. Leaders were assessed anonymously by the people they manage or work with (not only direct reports but also other collaborators and peers). “To be honest, I was hesitant to participate,” declared the vice-president of operations of a European energy firm. “My specific behaviours were the subject of the analysis. The discussion on survey results was difficult and sometimes painful, but I must say, the gains were significant. We agreed on the importance of working on ourselves. It sealed our shared commitment for authentic change.”
Change starts with an understanding of where gaps and unbalances exist and calls for an honest discussion about what leaders have learned and agree to address going forward.
Tolerance for failure BUT no tolerance for incompetence
Willingness to experiment BUT highly disciplined
Psychologically safe BUT brutally candid Collaboration BUT with individual accountability
Empowerment BUT strong leadership
FIGURE TWO
• Being uncomfortable with poor/subperformance (‘I’ve tolerated incompetence for too long’; ‘I’ve defended failure assuming I was defending my team’)
• Hesitating to kill experiments if they are not progressing
• Making facial/body expressions of irritation when receiving bad news
• Encouraging conversations on failure, measuring learnings and embedding them into our ways of working
• Promoting a high-performing and competent culture, taking concrete actions when incompetence occurs
• Setting clear goals, criteria and rules for experimentation
• Challenging the status quo by exploring uncharted territories
• Ensure active listening and being present during meetings by setting clear meeting rules (e.g., ‘close laptop’/ ‘put mobile on airplane mode’)
• Clarify meeting expectations: who should join and why it makes sense for some to skip a meeting
• Making decisions based on consensus
• Marking own territory (‘us vs. them’)
• Acting as a top-down decision-maker, overriding decisions, wanting to be involved in all decisions
• Clarity on who decides and how decision-making should unfold (e.g., context setting)
• Communicating strategy clearly
• Being more explicit and/communicating expectations on what you expect other people to do — as well as what they should expect from you as a role model
To facilitate the discussion and alignment, we developed a set of 30 behavioural cards that mirror the survey questions. On the front of the card, a behaviour is labelled with three or four words. On the back, a few sentences make it more concrete, with an empty space that participants can customize to write specific actions related to their particular context. Half of the cards represent typically virtuous positive behaviours, while the other half comprise negative/toxic behaviours.
We applied the cards in dozens of workshops with leaders, helping them sort out positive behaviours they commit to start/keep doing and negative behaviours to stop. Nothing was hidden. The hard truth about what needed to change, and why, forced leaders to align on a shared path forward.
Simon Norton, head of Vodafone Digital Networks and OSS Europe recalled: “Alongside the usual priorities that typically eat up so much of our available time, we found the time to focus on our organizational culture. The card deck
lent structure and helped to make the discussion concrete. We went to the core of a number of challenges that have led to certain tensions on our team in the past.”
When the discussion was over, leaders signed their contract (see the sample in Figure Two), a one-page document with a list of three or four concrete behaviours to stop and three or four to start or keep doing from day to day. Being specific when choosing the behaviours that need to change is fundamental so leaders can remember them every day.
At Enel X WAY, the electric mobility division of Enel, the first two management lines defined their own Leadership Social Contract. Once finalized, each presented and discussed it with their team during a dedicated meeting. The goal was to nurture a diffused sense of ownership and commitment throughout the organization. The people and organization team and the communications function supported the dissemination and visibility of the contract. “Working
in a new sector like e-mobility means that you cannot leverage a traditional culture,” Elisabetta Ripa, CEO of ENEL X WAY, told us. “What you need is a strong pact with the team, a framework of solid trust and encouraging people to try new things without fearing mistakes. To define our #waymakers Social Contract, we openly shared reflections and visions about the team we want to become.”
To turn a Social Contract into daily practice, each person should customize it to their specific context, by identifying one concrete individual action for each behaviour included in the contract. All individual actions, written on cards, can be placed on a bulletin board in the office. Making all commitments transparent reminds people to give ongoing feedback — and to recognize people for living the social contract.
Respecting the behaviours listed in the Social Contract is hard work. Despite leaders’ best intentions, it is tempting to go back to familiar ways of being and managing. To help leaders live their contract, new routines, metrics and team practices should be introduced to support them. The CEO of an agrichemical company devised a structured approach to ‘force’ himself and his leadership team to behave consistently with the Social Contract. In the agenda of routine meetings, he started including a specific discussion item related to one of the challenging behaviours identified in the contract. By providing time and space for candid discussion and peer feedback, he keeps people focused on making the transition to a new behavioural framework.
At Vodafone Digital Networks and OSS Europe, the leadership team organizes ‘Social Contract circles’, which are remote periodical sessions to share stories and experiences on how leaders are making the transition. They also have candid debates about challenges and ways to overcome them.
Another essential element to help leaders pay more attention to behavioural change is measuring the evolution and progresses against the initial baseline survey. Ideally every year, the survey should be repeated to measure the improvement on the scores after implementing the corrective actions of the selected behaviours. For the most critical areas, it could be helpful to develop ad hoc indexes. For instance, one life sciences company addressed the gap discovered on ‘candor’ by measuring progress on a tool dubbed The Candor Index.
We have seen far too many culture-change programs built around vague value statements and cascaded down throughout companies. Before announcing that entire organization needs to change, executives have a duty to change their own behaviour first.
Starting from the hard truth depicted through a quantitative baseline of observable and measurable behaviours, leadership teams can construct a Social Contract and make it a habit to sustain the change every day. So, to be credible, dear executives, please look to your own behaviour — for the good of your organization.
Elisa Farri is Vice President and Co-Lead of Capgemini Invent’s Management Lab and a member of the Thinkers50 Radar Class of 2023. Previously, she was a researcher at the Harvard Business School Europe Research Center in France. Gabriele Rosani is Director of Content and Research at Capgemini Invent’s Management Lab.
Each team member should identify one concrete action to tackle for each behaviour in the contract.