Discussion Assignment Part 1

mcyrayvahgr

Chapter5ExportingCultureChangep91-112U3D2.pdf

Home >Business & Finance homework help >Discussion Assignment Part 1

EXPORTING CULTURE CHANGE

Every global organization faces the same challenge. It doesn’t

matter whether they are American, Dutch, Swiss, Chinese, Ger-

man, French, Japanese, Brazilian, or Indian: their organization

started in one place and grew successfully from there. The core

logic and the established culture of the firm reflect those origins.

As their organization has thrived, it has grown far beyond their

initial origins and aspirations. But in the process, they start to

bump up against a basic dilemma: How do you export the spirit,

the essence, and the principles that form the foundation of a

successful organization to a new context without falling victim to

the folly of imposing home country habits in a new setting where

those habits don’t fit very well?

Examples are everywhere. How do you sell hamburgers in

India? Yes, management consultants are fond of saying that

‘‘sacred cows make the best burgers,’’ but that doesn’t help

McDonald’s create a product strategy for Hindu customers.1

When Domino’s Pizza first entered Germany, they tried to stick

to the formula that had worked for them in the States. But

they quickly found out that most German men would not take

their families out for pizza if they couldn’t sit down at a table

and have a beer. So they had to change their plans to adapt to

the local habits. In Chapter One, we talked about the fact that

IKEA’s flatpack strategy made it nearly impossible for them to

really prosper in the commercial furniture market. However, they

have successfully introduced lingonberries as an icon of Swedish

Denison, Daniel, et al. Leading Culture Change in Global Organizations : Aligning Culture and Strategy, John Wiley & Sons, Incorporated, 2012. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/capella/detail.action?docID=861640. Created from capella on 2017-10-23 11:43:26.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

92 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

style in many different countries. Building a successful global

corporation always means successfully importing and exporting

elements of an organizational culture across national boundaries.

When Japanese companies first began building cars in the

United States in the 1980s, they tried, with mixed success, to

introduce Japanese work practices into their American factories.

One practice that didn’t transfer very well was the Japanese habit

of workers doing calisthenics together before starting work in

the morning. I never understood why this practice worked so

well with Japanese workers until our oldest child Roland went

to fifth grade in a Japanese public school. Every morning, even

in the winter, the students would line up in the playground at

the beginning of the day. Their teachers would call roll, make

announcements, and talk about the plans for the day. While

they talked, the children shivered, but did not dare to complain.

When the teacher stopped talking, the exercises would begin!

Slowly, the day would come alive, as the children started to warm

up together.

So for a Japanese worker, morning calisthenics has a lot

of meaning with deep roots in their national culture. But the

same practice had very little meaning for the American workers,

so it didn’t achieve the intended purpose. These stories are

good reminders for all of us that meaning makes sense only in

context. When we change context, we always need to make sure

we connect.

Can Culture Change Be Exported?

A successful transformation of any one part of an organization is

a major achievement. But translating those changes to another

part of the organization is a far bigger challenge. Achieving

uniform change on a global scale is the biggest challenge of all. It

is difficult because organizations seldom change at the same pace

throughout the world. Many firms make the mistake of assuming

that they can roll out programmatic change on a global basis. In

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 93

our experience, it is quite different. All change is local, and then

multilocal, long before it becomes global. Learning from local

best practice, so that the most important lessons are transmitted

to the entire firm, is the hardest part of the change process. The

seeds of the future always exist in the present, where they are

waiting to be discovered and leveraged on a global scale.

This perspective implies that transforming a global organiza-

tion requires successful change in one part of the organization

to be ‘‘exported’’ to other parts of the firm and then integrated

into the local context. Is that really possible? What does it take

to make this process successful? Let’s have a look at one example

of a successful transformation in the United States that was then

‘‘exported’’ to Europe.

Transformation and Turnaround

In 1998, GT Automotive acquired S&H Fabrication and formed

the HVAC Division (heating, ventilation, and air conditioning)

to serve the automotive market.2 GT was a private company that

originated in 1919 in Birmingham, England, as Tube Investments

Ltd. From the start, GT was an industrial company specializing in

products that carried fluids through tubing, such as braking sys-

tems, fuel systems, and HVAC systems. Through the decades, the

company grew organically and through acquisitions (the company

is now owned by a private equity firm). By 2009, they operated

over a hundred facilities in twenty-seven nations with sixteen

thousand employees on six continents. Of around $3 billion in

annual sales, Europe generated 50 percent; North America, 35

percent; and the remainder came from Asia and South America.

GT is a supplier to every major auto manufacturing company,

and General Motors is their largest customer.

In 2002, Tim Kuppler became general manager of GT’s North

American HVAC Division. Kuppler was a veteran employee of

GT, having joined the company in 1992. His experience in the

company included ten years in quality assurance, followed by

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

94 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

a stint in fuel systems. He inherited the leadership role in an

organization that had gone through a lot of transition and was

the ninth leader to take charge of the organization within the

last five years!

Since the S&H acquisition, all administration has been

centralized around the North American headquarters near

Detroit. Many long-term employees felt that the innovative and

entrepreneurial culture of S&H had been replaced with the

slow, bureaucratic culture of GT. With tight functional silos

and limited workspace, some of the staff even found themselves

working in trailers in the parking lots. Furthermore, as the

smallest division of GT, HVAC seldom got the attention that

they needed from the top GT executives. One HVAC manager

noted, ‘‘We were like the red-headed stepchild of GT.’’

Tracking the Progress

Our Organizational Culture Survey had been used by GT for

four years before Tim Kuppler became GM of HVAC.3 Given

what he observed in the early days of his tenure as general

manager, he believed that this approach could be helpful in

diagnosing the division’s problems and helpful in improving the

business. The message from a survey of all the division’s salaried

employees in 2003 was clear. These survey results are presented

in Figure 5.1. The results showed a weak sense of direction and

a lot of uncertainty about the division’s capabilities to make the

changes required to become more competitive. They needed a

sense of their future — and a plan for how they were going to

get there.

Involvement Meetings

GT’s approach for moving from diagnosis to action has important

implications for every organization. They brought all salaried

employees together for a day-long ‘‘involvement’’ meeting that

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 95

Figure 5.1. 2003 Culture Survey Results:

HVAC North America

& Intent Or

gan izatio

nal

Lea rning

G oals &

V isio

A gr

ee m

en t

E m

p o

w e rm

e n

O bjectives

C re

a ti

n g

C h

a n

g e

C us

to m

Fo cu

& I

n te

g ra

ti o

C o

o rd

in a ti

o n

Valu es

CoreDevelopment

Capability

O rien

tation

T eam

StrategicDirection

External Focus

Internal Focus

F le

x ib

S ta

b leBeliefs and

Assumptions

56 44

3755

5427

would serve as a platform for understanding the division’s survey

results and starting to plan the changes that would address their

major problems.

From the beginning, there was pervasive skepticism. In the

past, meetings of this type had led to few real changes. But

Kuppler’s enthusiasm for making HVAC North America a better

place to work was infectious. Their first involvement meeting

started with a review of HVAC history. After that, the leaders

presented the culture model and the survey results. No one was

surprised by the news that they had some work to do.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

96 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

As a part of this meeting, the leadership team proposed a

vision statement for the HVAC staff to consider. Small work

groups then reacted to the proposed vision statement, offering

suggestions on enhancing the customer relationship strategy and

suggesting ways to address the issues raised by the survey. The

process invited and rewarded everyone’s participation in helping

to determine the future strategic direction of the company. The

ideas that came from these small-group discussions were presented

to the entire group, with lots of suggestions for action steps and

follow-up.

A few months later, a second involvement meeting was held

to evaluate progress against the goals that they had set in the first

meeting. Both management and employees were held responsible

for formulating ideas and implementing change. As this cultural

transformation started to gain momentum, attitudes started to

shift throughout the organization. The involvement meetings

became a twice-yearly event for employees, who started to look

forward to these events as great opportunities to catch up with

colleagues and contribute to shaping the future of the division.

Our Role at GT Automotive

We started doing consulting work at GT Automotive about

four years before the work described in this chapter began. The

Culture Survey was used extensively in the HVAC Division

described in this chapter; it had more limited application in

the other divisions of GT. We met with the executives and

managers of GT to present results and facilitate the action

planning process. By the time that the work described in

this chapter began, GT was very familiar with our approach

and managed this process very well themselves. In 2008, we

completed an IMD teaching case on GT.

Source: Denison and Lief, 2009a and 2009b.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 97

Business Teams

But involvement teams alone were not enough to drive the trans-

formation. To sustain the momentum created by the involvement

meetings, the next step was to capture that energy and direct

it at a set of core business issues. To do this, they created a

set of business teams focused on the specific changes required

to enhance the customer experience at HVAC. Five business

teams were created, ranging from five to twenty individuals,

and every salaried employee was involved in the work of at

least one of those teams. They thought through the choices

for the best structure, composition, goals, responsibilities, and

metrics of each of the new business teams. Leadership selec-

tion and operating procedures were left to the discretion of

each team. The only requirements for each team were that they

should: (1) meet regularly, to encourage communication and

engagement; (2) participate in a charity function annually; (3)

update their objectives on a quarterly basis; (4) report progress

at monthly business meetings; and (5) maintain a site on the

company intranet. To keep each other informed, the business

teams were invited to present their best practices and current

challenges at monthly all-team meetings.

These business teams overlapped quite a bit with the existing

organizational structure. But their purpose was not just to have

every department form a business team; rather, it was to create

a new way of working, in keeping with the overall purpose of

‘‘enhancing the customer experience at HVAC.’’ One important

feature of this approach was that the business teams were not

simply the leadership teams of the departments or units. Instead,

the members of the business team were usually one or two levels

down in the organization from the leaders of the department

in which the business team was being formed. This ‘‘action

team’’ approach is usually very effective, because it creates a

team of knowledgeable and experienced individuals with a strong

stake in leading the organization into the future, rather than an

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

98 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

intact leadership team that may be tempted to get distracted by

defending the decisions of the past.

After a year of this process, the leadership team and the staff

were actually a little surprised by their progress. Their 2004 survey

results, presented in Figure 5.2, showed substantial improvements

in every category. HVAC beat their profit plan by 20 percent

in 2004, and quality and safety performance also improved. The

efforts of Kuppler and his team drew the notice of TI corporate

executives. They had created a cultural transformation of their

own and had led a significant turnaround in the business. HVAC

was no longer the ‘‘red-headed stepchild’’ of TI.

Figure 5.2. 2004 Culture Survey Results:

HVAC North America

& Intent Or

gan izatio

nal

Lea rning

G oals &

V isio

A gr

ee m

en t

E m

p o

w e rm

e n

O bjectives

C re

a ti

n g

C h

a n

g e

C us

to m

Fo cu

& I

n te

g ra

ti o

C o

o rd

in a ti

o n

Valu es

CoreDevelopment

Capability

O rien

tation

T eam

StrategicDirection

External Focus

Internal Focus

F le

x ib

S ta

b leBeliefs and

Assumptions

78 89

83 94

86 79

89 92

96 82

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 99

Be Careful What You Wish For

As a result of these successes, Kuppler was asked by TI to take on

global responsibility as vice president and general manager for the

HVAC Division. Although he was convinced that he needed to

implement a change agenda in his new position, he wondered if

he should take the same approach in this new context. Corporate

culture would clearly be an issue, but this time national culture

would be too. In his new global role, he would have to deal with

the complexity of HVAC’s operations in eleven countries around

the world. The workforce was scattered over a wide geographic

area, and the influence of diverging national cultures on the

corporate culture would make the job much more difficult.

His initial idea was to extend the successful change process

that they had used in North America but to continuously modify

it based on the lessons they learned in each country. Europe was

clearly the top priority. HVAC had manufacturing operations in

Spain, Italy, and the Czech Republic, with commercial operations

headquartered in Heidelberg, Germany. There were big cultural

differences among these locations. Would the same approach that

brought an enhanced work environment and impressive financial

performance in the United States also prevail in this diverse set

of European settings?

Kuppler sensed that the strength of the European organiza-

tion was in its disciplined approach, respect for authority, and

dedication to following through on tasks. However, he also found

that employees seemed very skeptical of new initiatives and,

therefore, less willing to candidly share their feelings and ideas.

This group needed convincing that real change would come, no

matter what they did or how much they talked. But this time the

job was also more complex because of the five operating languages

that were used in the European facilities. He had his work cut

out for him, but he had the strong support of the global HVAC

leadership team he had created with representatives from around

the division. Table 5.1 presents a summary of the similarities and

differences between the United States and Europe.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

Table 5.1. North America/Europe Culture Change Comparison: GT Automotive HVAC

Culture Change Culture Change Marketing

Strengths Issues Key Elements and Initial Implementation

North

America • Quick to accept the

need for change

• Team spirit builds quickly and leads to

increased discipline

and commitment

• Open to sharing ideas and criticism

• Strong desire for team coordination and moti-

vation

• Critical and sarcastic • Initial lack of discipline

and organization; poor

follow-through on com-

mitments

• Quick to turn negative with lack of communi-

cation

• Easily bored with plans and details

• Implementation of team structures

• Alignment of vision, strategy, objectives, met-

rics, and rewards

• Denison survey and for- mal corrective actions

• Involvement meetings and business stream

meetings

• Implementation of extensive capability

development processes

• Regular communication and team activities

• Emphasize key facts to make the case for change

• Management implements small changes based on

employee feedback to

build momentum

• Extensive team activities to build team spirit

• More extensive team reviews and support, with

emphasis on team commit-

ments

• Very regular recognition activities of all sizes to

maintain interest and sup-

port

• Use of humor and stories to combat sarcasm and

maintain interest

D e

n is

o n

, D a

n ie

l, e t a

l. L e

a d

in g

C u

ltu re

C h

a n

g e

in G

lo b

a l O

rg a

n iz

a tio

n s : A

lig n

in g

C u

ltu re

a n

d S

tra te

g y , J

o h

n W

ile y &

S o

n s , In

c o

rp o

ra te

d ,

2 0

1 2

. P ro

Q u

e s t E

b o

o k C

e n

tra l, h

ttp ://e

b o

o k c e

n tra

l.p ro

q u

e s t.c

o m

/lib /c

a p

e lla

/d e

ta il.a

c tio

n ?

d o

c ID

= 8

6 1

6 4

0 .

C re

a te

d fro

m c

a p

e lla

o n

2 0

1 7

-1 0

-2 3

1 1

:4 3

:2 6

Europe • Disciplined and organized

• High respect for order and authority

• Excellent follow- through on commit-

ments

• Skeptical • Tentative to share ideas

with senior managers

• Team spirit builds when commitments are met

• Change accepted only with clear explanation,

planning, and initial

follow-through

• More significant accomplishments

required to motivate

• Same • Thoroughly justify the case for change and the pro-

cesses for driving change

• Emphasize more substan- tial management commit-

ments and timing to gain

respect when met

• Team activities start slowly and grow over time

• Management involvement to encourage sharing of

ideas

• Emphasize major recog- nition activities with

more detail about plans,

commitments, and accom-

plishments

D e

n is

o n

, D a

n ie

l, e t a

l. L e

a d

in g

C u

ltu re

C h

a n

g e

in G

lo b

a l O

rg a

n iz

a tio

n s : A

lig n

in g

C u

ltu re

a n

d S

tra te

g y , J

o h

n W

ile y &

S o

n s , In

c o

rp o

ra te

d ,

2 0

1 2

. P ro

Q u

e s t E

b o

o k C

e n

tra l, h

ttp ://e

b o

o k c e

n tra

l.p ro

q u

e s t.c

o m

/lib /c

a p

e lla

/d e

ta il.a

c tio

n ?

d o

c ID

= 8

6 1

6 4

0 .

C re

a te

d fro

m c

a p

e lla

o n

2 0

1 7

-1 0

-2 3

1 1

:4 3

:2 6

102 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

Figure 5.3. 2004 Culture Survey Results: HVAC Europe

& Intent Or

gan izatio

nal

Lea rning

G oals &

V isio

A gr

ee m

en t

E m

p o

w e rm

e n

O bjectives

C re

a ti

n g

C h

a n

g e

C us

to m

er Fo

cu s

& I

n te

g ra

ti o

C o

o rd

in a ti

o n

Valu es

CoreDevelopment

Capability O

rien

tation T eam

StrategicDirection

External Focus

Internal Focus

F le

x ib

S ta

b leBeliefs and

Assumptions

The survey results for Europe in 2004, presented in Figure 5.3,

were actually more challenging than the initial survey results in

North America in 2003. Consistency, which was not so much

of a problem for North America, turned out to be the weakest

trait for Europe, reflecting that there was little agreement among

the different locations about what was needed to create one

global HVAC business. The survey results were available in June

2004 and the first involvement meetings were scheduled for that

same month. Once again, the agenda for the meeting included

the presentation of the group’s results and votes on establishing

priorities for action plans. A vision and strategy for the European

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 103

unit was discussed and clarified. The next meeting was scheduled

for November 2004.

The reaction to these results varied quite a bit by location. In

the commercial center in Heidelberg, home to the sales teams and

the design groups, there was a lot of skepticism about the results

and their implications for change. In their first involvement

meeting, it took a long time to gain a consensus to move forward.

But once they had reached an agreement, the Germans tended to

move forward with discipline and structure. The manufacturing

locations in Italy, Spain, and the Czech Republic, in contrast,

had initial discussions that were more receptive to the results and

the need to take action. Their consensus came more quickly, but

their follow-through was less structured.

The low scores on agreement that appeared in their results

pointed to a set of issues that could not be resolved using a

location-by-location approach. This led to a series of discussions

among managers from the four locations about coordination

and agreement between the customer, the sales process, the

design team, and the manufacturing sites. This kind of discussion

had never happened before. It forced them to sort out issues

that had several layers of culture. With the Germans, the Italians,

the Spaniards, and the Czechs all in the room, there were several

layers of culture to consider: the center versus the locations,

sales versus manufacturing, design versus production, Northern

versus Southern Europe, and Germany versus the rest. All of

these factors had an important influence on the values of the

team members and their ability to work together. Nonetheless,

these discussions led to a set of cross-functional metrics — such

as launch quality, sales, and margins — that forced a new level of

collaboration in the European organization.

As in North America, Kuppler worked quickly with his

leadership team to create business teams throughout Europe

to follow up on the momentum created by the involvement

meetings. In all, thirty business teams were established across

the global business unit by the time he was finished. A summary

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

104 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

Table 5.2. HVAC Global Business Teams

Global

Core Engineering

Technology

Commercial

Business Systems

Purchasing

Estimating

Europe

GM / Fiat / Suzuki

Strategic Customers

Tier 1 + Truck

Customers

Jablonec Plant

Tauste Plant

Cisliano Plant

North America

DCx

Delphi

Air International

Ford

Prototype

Employee Involvement

Design

Tool Group

Plants: 1, 2, 3, 4, 7, Service

Sanford Plant

Asia

Asia Commercial

Anting, China Plant

of the global business teams that were created is presented in

Table 5.2. Each of the teams was required to develop a standard

set of metrics that they would use to report their progress on a

regular basis. Each team was also required to update everyone

through their team webpage on the company intranet. Although

this process had many similarities with the process used in the

United States, it was also very flexible. Kuppler noted,

This was not a tightly planned effort from the start. It was

more watching how things evolved over time and continuously

obtaining employee feedback for improvement as we defined and

updated our priorities. We learned what to emphasize as we went

along. And we got a better appreciation for how culture touches

everything.

The changes from 2004 to 2005 were dramatic. Much im-

provement was noted, with better results in every category.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 105

There was still much to be done, particularly in the area of

Consistency — Core Values, Agreement, and Coordination and

Integration — but overall the leadership team had much to feel

good about. As reflected in Figure 5.4, HVAC operations in

Europe moved forward in a variety of ways. There were signs of

progress in everything from financial performance to new business

wins to safety, quality, and strategy implementation.

Kuppler came to believe that the only way to survive as a

firm in the auto industry was to strengthen the team, building

individual leadership capabilities through regular feedback for

senior managers, routine developmental reviews for all man-

agers, exchange programs between locations, and a significant

expansion of the opportunities for training and development.

But it was also important to line up behind one comprehensive,

well-understood vision. Regular follow-up and communication

with respect to progress toward that vision was also important

in order to sustain the effort. These changes led to considerable

improvement in the performance of the business and made TI

a healthier, more enjoyable place to work. Table 5.3 gives an

overview of the changes in performance that occurred between

2002 and 2006.

After successfully leading the HVAC business transformation

in North America and Europe, Kuppler went on to head TI’s

entire operation in North America, with responsibility for the

brake and fuel business as well as the HVAC Division. He intro-

duced his leadership and teamwork ideas to this work unit as well.

In mid-2008, following the appointment of a new corporate CEO

and the implementation of a new global organizational structure,

Kuppler left TI. But looking back on his efforts, he reflected,

The most important factor in our success was the freedom given

to me and our leadership team by my boss, Rich Kolpasky.

He had confidence in me and my ideas. He trusted me to run

the businesses the way I thought best. After reading literally

hundreds of leadership and management books, I had ideas

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

Figure 5.4. Comparing 2004 to 2005 Culture Survey Results: HVAC Europe

& Intent Or

gan izatio

nal

Lea rning

G oals &

V isio

A gr

ee m

en t

E m

p o

w e rm

e n

O bjectives

C re

a ti

n g

C h

a n

g e

C us

to m

Fo cu

& I

n te

g ra

ti o

C o

o rd

in a ti

o n

Valu es

CoreDevelopment

Capability

O rien

tation

T eam

StrategicDirection

External Focus

Internal Focus

F le

x ib

S ta

b leBeliefs and

Assumptions

17 37

39 51

Salaried Employees 2004

& Intent Or

gan izatio

nal

Lea rning

G oals &

V isio

A gr

ee m

en t

E m

p o

w e rm

e n

O bjectives

C re

a ti

n g

C h

a n

g e

C us

to m

Fo cu

& I

n te

g ra

ti o

C o

o rd

in a ti

o n

Valu es

CoreDevelopment

Capability

O rien

tation

T eam

StrategicDirection

External Focus

Internal Focus

F le

x ib

S ta

b leBeliefs and

Assumptions

Salaried Employees 2005

2 0 1 2 . J o h n W

il e y &

S o n s , In

c o rp

o ra

te d . A

ll r

ig h ts

r e s e rv

e d .

EXPORTING CULTURE CHANGE 107

Table 5.3. Improved HVAC Culture = Improved Results

2002 2003–2006

Profit On plan 2003–2005: 10 percent

better than plan

2006: NA restructuring

Quality Thirty-seven parts per

million (PPM)

Single-digit PPM

New Business Wins Two non-GM wins in

prior five years

Over 20 non-GM wins

Globalization No Asia presence Four programs won in Asia

New plant established in

China

Global Leadership Eight leaders in five years One leader

Global Coordination None Leading TI business

Global strategies

Global teams

Global intranet

Global business processes

Global product designs

Global manufacturing

processes

I wanted to try out. He gave me the opportunity to follow my

instincts and knowledge. And the results were satisfying — a more

involved workforce and substantially improved performance when

we initially managed the culture change.

Lessons for Leaders

GT Automotive’s success, using a change process that was first

developed in the United States and then applied in Europe, came

as quite a surprise to the organization and to industry observers.

Isn’t national culture supposed to be a nearly insurmountable

barrier to creating a truly ‘‘organizational culture’’? Doesn’t each

national culture require its own independent approach to creating

the buy-in required for successful organizational change? Let’s

consider some of these questions as we look at lessons that we

can take away from this example.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

108 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

Do What You Know Best

Although it is clearly true that different national contexts may

require very different approaches to organizational change, this

case is a good reminder of the fact that doing what you know how

to do with honesty, openness, and integrity can go a long way.

Leading with curiosity, respect, and a clear set of principles that

you are trying to apply in the new context can be quite successful.

When we use an approach that is familiar to us, we are able

to more quickly create a structure that will apply some core prin-

ciples to have a large-scale impact. In the United States, Kuppler

created a structure of weekly business team meetings, monthly

business meetings, quarterly objective updates, quarterly global

strategy meetings, and twice a year an involvement meeting with

a social event in the evening. This set of activities reinforced the

change process and created a new level of teamwork. This archi-

tecture allowed the organizations in both locations to manage

the transition from the insights and dialogue of the involvement

meetings to the action orientation of the business teams.

The logic of this approach and the credibility that it had

based on the success in North America provided an irresistible

advantage to the change process. It didn’t take a lot of time to

gear up, and Kuppler and his colleagues were very familiar with

the key leverage points in the process as it unfolded. The integrity

of this structured approach seemed to outweigh the needs for a

more unique approach to each country and location.

But Adapt as You Go

On the other hand, it is very important to understand that the

lessons about ‘‘doing what you know best’’ were about expressing

the same set of principles in the new European context, and

not about enforcing adherence to TI’s practices on the ground.

There is a big difference between consistency and compliance.

One interesting example of this was the reaction to the ‘‘service

learning’’ component of the change process in the United States

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 109

and Europe. In the United States, spending a day together as

a team working on a charity was a big part of the process. It

built a commitment among the team members that they were a

force for good and that they were working together for a purpose

that went beyond their quarterly business targets. But in Europe,

for a number of reasons, this component of the process was not

as well received. So they changed this part of the process and

concentrated their efforts on other ways to build teamwork

and commitment.

It is also critically important to remember that expecting to

find a uniform approach to the change process is mostly wishful

thinking. Change almost always happens at different rates in

different places. As seductive as it may seem to roll out a global

change process with the expectation of a unified approach, it

almost never happens. Consistency in the change process is

often worth striving for, but it seldom happens. Change strategies

designed to create momentum will beat change strategies designed

to create uniformity every time.

Exporting Culture Change: Beyond GT Automotive

GT provides us with lots of good examples of the challenges of

exporting change across national boundaries. It is hard work, but

as this case shows, it is definitely possible. So despite the hard

work associated with leading global culture change, organizations

keep trying to overcome the realities of fragmented, disconnected

‘‘global’’ organizations to try to create better integration. Let’s

consider some other authors’ perspectives on this issue.

Which Is Stronger: National Culture or Organizational

Culture?

As many authors have noted, national cultures have a depth

that organizational cultures can never achieve.4 It takes hun-

dreds or even thousands of years to develop a national culture,

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

110 LEADING CULTURE CHANGE IN GLOBAL ORGANIZATIONS

and that process creates roots that go far deeper than any that

could ever be created by an organization.5 However, Freud

reminds us that ‘‘love and work are the cornerstones of human-

ity.’’ He didn’t mention anything about which passport we

carry!

There is no question that nationality has an influence on those

all-important work habits that are so central to our identities. But

our habits are also shaped by many other aspects of the context

that we work in: the organization we join, the industry we work

in, the profession we have chosen, and the work group we are

a part of. All of these factors have a strong influence on our

identities — as the following situation illustrates.

Two poets walk into a bar, followed by two engineers. One

of the poets is French and the other is English. Same with the

engineers. The four of them start talking. What do you think will

have the biggest influence on the approach that they take to the

issues they discuss: their nationality or their profession? What if

they are talking about building a bridge? Or writing a song? How

about EU fiscal policy?

The answer, of course, is that this depends on the issues they

are discussing. But when it comes to organizational culture, many

of the values, beliefs, and work practices that we develop are

quite specific to the organizational context that we work in.6

Occupational culture, for example, is also a strong influence. It is

always fascinating to see the reaction of a roomful of executives

from all over the world when they are grouped by function. There

is almost a sigh of relief that now auditors can talk to auditors,

pilots can talk to pilots, engineers can talk to engineers, and sales

guys can talk to sales guys. The influence of nationality on work

habits fades away fast.7

These connections of common organizational experience

provide a basis for creating a change process that spans national

boundaries. Lessons learned in one country can sometimes be

transferred across boundaries to build momentum for change.8

National culture has a strong influence on the way that we

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

EXPORTING CULTURE CHANGE 111

organize and the way that we lead. But it is certainly not the

only influence.

Clear Direction Makes All the Difference

The lessons from this chapter are also a good reminder that

setting a clear direction has a strong influence. A long debate

over the right or the wrong way to proceed is seldom a motivator.

Interestingly enough, setting a clear direction is so important to

a team, a group, or an organization that the energy and focus

can sometimes transcend the importance of the actual direction

itself. Scholar Karl Weick tells this story:

The young lieutenant of a small Hungarian detachment in the

Alps sent a reconnaissance unit into the icy wilderness. It began

to snow immediately, snowed for two days and the unit did not

return. The lieutenant suffered, fearing that he had dispatched

his own people to their death. The third day the unit came back.

Where had they been? How had they made their way?

Yes, they said, we considered ourselves lost and waited for the

end. And then one of us found a map in his pocket. That calmed

us down. We pitched camp, lasted out the snowstorm, and then

with the map, we discovered our bearings. And here we are.

The lieutenant borrowed this remarkable map and had a good

look at it. He discovered to his astonishment that it was not a

map of the Alps, but a map of the Pyrenees.9

Setting direction and building momentum are essential

to any change process. Momentum can build across national

boundaries if we follow those elements of the culture that we

share in common — and respect those elements of the culture

that we do not.

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .

C o

p y ri g

h t

0 1

2 .

J o

h n

W il e

y &

S o

n s ,

In c o

rp o

ra te

d . A

ll r

ig h

ts r

e s e

rv e

d .