Transforming Your Leadership Culture - a book review

You’re so busy grasping technology in one hand and science in the other, you have no hand left to grasp what’s really important. It’s the human spirit, that’s the challenge, that’s the voice, that’s the expedition.
—John Travolta as George Malley in the film Phenomenon

Book Summary
In spite of their allure and promise, change management practices regularly fail to achieve any significant results. Since the 1990s, as many as three-quarters of organizational change efforts have failed. Studies suggest that organization-wide failure rates range from 66 percent to 75 percent. One particular study revealed that only one-third of organization-wide change initiatives achieve any success at all.

It is no wonder that most leaders don’t want to spend a lot of money in organization change programs. Perhaps most change programs fail because they are primarily focused on external systems, structures and processes. What if the change your organization needs is in the leadership mindset?

According to John B McGuire and Gary B Rhodes, authors of Transforming Your Leadership Culture, too many change management initiatives, even after decades of advice and guidance, still fail to make an impact on their organisations. The net result is that leaders are left feeling frustrated, morale plummets and companies are trapped in the status quo, a dire situation that most organisations will not be able to afford in the best of times, let alone in today's volatile economic climate.

To create transformation change in an organization you need to change the culture. This may seem to go without saying, but we often try to make changes without changing the underlying belief systems. Belief systems drive behaviour and culture eats strategy. In Transforming Your Leadership Culture, authors John McGuire and Gary Rhodes write, “Organizational culture holds your organization’s aspirations and the spirit of the place. Its beliefs and values define the organization’s core.” To illustrate how endemic the force of belief is within a culture, they relate the following example:

Mike, a vice president at National Bank, a prestigious financial organization, tells the story of what came out of an all-day meeting of a group of vice presidents at headquarters: “We brought in VPs and directors from all our locations. We needed to use the largest conference room in the building and had to get special permission to do so.” At National Bank, “permission” wasn’t simply an issue of scheduling. The large conference room was located on the top floor of the building and used exclusively by senior executives, not by vice presidents. The vice president and director offices were on the floors below; lower-ranked employees were lower still, filling in the middle floors; the ground level housed administrative and support operations. The furnishings in the building changed by floor too. The top floor featured leather chairs, high-quality wood desks and tables, artwork, and attractive kitchen and washroom facilities. Below that level, floors housed progressively less expensive furnishings.

The night before the meeting, Mike was working late in his office finishing up his presentation: “A couple of guys from our maintenance staff kept walking past my office with chairs from the meeting room down the hall. I didn’t think much of it until the next morning when I arrived on the top floor for our big meeting. The maintenance staff had replaced all the leather chairs from our floor.”

Here the power of the culture reveals itself: no one had told the maintenance staff to switch the chairs. There was no policy or precedent for doing so. The maintenance crew made its own decision, based on its understanding that certain chairs went with certain levels of status. Without question, they simply followed the cultural norm. The cultural authority and trappings of status were so embedded in the organization that it didn’t even occur to them that vice presidents might sit in executive chairs while meeting on the executive floor.

This book is especially for the organizational leader who sees that change is necessary but has become sceptical that lasting, sustainable change—transformation—lies beyond reach. It argues that the heart of the problem is that senior management teams too often get fixated on changing an organisation's systems and forget that it is the people and culture that really makes it work. It is the beliefs and behaviours related to leadership and how workers respond to their leadership and management teams which play a key role in how engaged and productive an organisation is at any time. "When leaders take on and follow through on cultural transformation alongside their strategic and operational changes, they consistently succeed in reaching performance goals. They often just need help knowing how to change the culture," say McGuire. In short effective change management has to start from the top.

In Transforming Your Leadership Culture, McGuire and Rhodes of the well known Center for Creative Leadership, offer a new approach to organizational change. They describe the powerful role leadership culture has in organizational engagement, growth and adaptation to complex challenges. The book reveals the crucial role of a change-leading senior team, and provides processes, questionnaires and tools for engaging the senior team in culture change work. It then offers a path to successful transformation toward more interdependent, collaborative leadership cultures.

While the authors argue for the lofty goal of organizational transformation and provide big-picture concepts such as the culture development cycle, they provide practical guidance as well. The book provides a set of useful frameworks and tools to expand understanding of change, tap into a new approach, and create a plan of action for initiating change in your own leadership culture. Transforming Your Leadership Culture provides guidance and resources that help leaders decide what change is feasible, how to set practical incremental targets of change and development, and what tools are needed for navigating the turbulent waters of the change process. Executives must do this change work first by engaging with others and leading by example. Using developmental theory based on solid research, the authors show how this approach orients organizations toward a connected leadership in which everyone shares.

McGuire and Rhodes suggest that change comes when beliefs change. Altering organisational structures and systems is not enough, deeply held beliefs also need to change, as they will be what drive the decisions and behaviour in the organisation and which, in turn, will be the source of new and better leadership practices. Successful change, they argue, starts with the beliefs of the senior leadership culture and spreads into the middle of the organisation. From there, it is likely that momentum will build as successive levels of employees buy into change.

Every CEO wants fast, capable response to the challenge of change. But parochial mindsets only concerned with the immediate environment simply cannot deal with the complexity. Organizations seeking to grow and adapt during turbulent times cannot get there by purely technical approaches such as restructuring and reengineering. Many organizations are bad at effecting change because managers have so many "priority" projects on the go they can't tell what's important and what's not.

This book debunks the common myth that change in organizational culture is beyond the reach of mere mortals. It shows how leadership can be an emergent, creative, collective force for change. It provides good news by showing that when leaders take on and follow through on cultural transformation alongside their strategic and operational changes, they consistently succeed in terms of performance goals—while other organizations fail to change and struggle to survive. This book is a guide to successful change management. It suggests that organizations can evolve to face new challenges. Individuals, teams and entire organizations can transform their current mindsets into new ones. Agility, speed, execution, unification, readiness—all the things that CEOs dream about—are available when leaders transform their organization’s leadership culture.

In their client work and action research, the authors have seen this happen. They have studied leaders who grow together to develop “bigger minds.” They have facilitated processes that help senior leadership teams to evolve new mindsets that, in turn, allow the organization to anticipate and prepare for future challenges.

McGuire and Rhodes step offer three essential truths of successful cultural change:

1. Executives do the change work first and this involves personal change as well. Executives can’t delegate culture transformation work to others. What's more, culture change has to be a personal process first and foremost – by investing themselves in it, executives literally become instruments of change. Without first leading by engagement and example, senior leaders have an extremely poor chance (the odds are one in three or four) of achieving successful organizational transformation. The authors follow two simple principles: (1) Do not ask others to do what you are not willing to do yourself; and (2) if you want something different, then become something different. Culture change is a show-up, stand-up, participative, put-yourself-on-the-line, personal process.

2. The senior leaders becomes the change and takes change to the middle level of the organization. The key to successful transformation is doing the work in the senior leadership culture first before taking the change broadly and deeply in the organization. It requires senior leaders to be genuinely and seriously committed to the mutual risk of initiating, new leadership beliefs and practices that generate change. If the senior team is not ready, then substantial, lasting change isn’t likely. Ultimately, people in key roles must act and be the change they expect of others.

3. Everyone gets bigger minds. Transformation is serious work for serious people; it is about getting bigger minds to deal with bigger and more complex issues that will continue to confront the organization. The executive team must raise its leadership logic to the level required by the organization's vision and strategy. For example, if your strategy requires an independent leadership logic and your senior team has a conformer logic, then its collective mindset needs to grow. This may require some sizeable, serious cultural and development work for the team. The willingness to learn is the only requirement to getting a bigger mind.

KEY CONCEPTS
3 Levels of Leadership Culture

McGuire and Rhodes describe three levels of leadership culture, from simpler and developmentally “earlier” forms, to more complex and later developed forms. Each level of culture has its own characteristic way of how leaders engage the organization. The three cultures are Dependent-Conformer, Independent-Achiever and Interdependent-Collaborator.

1. Dependent-Conformer cultures are characterized by the assumption that only people in positions of authority are responsible for leadership. Authority and control are held at the top. Success depends on obedience to authority and loyalty. Mastery of work operates primarily at the level of technical expertise. Dependent cultures are also conservative in their approach to change, place emphasis on keeping things running smoothly, and have a tendency to publicly smooth-over mistakes.

2. Independent-Achiever cultures distribute authority and control through the ranks. They operate on the assumption that leadership emerges as needed from a variety of individuals based on knowledge and expertise. This leads to decentralized decision-making, high demand for individual responsibility, strong reliance on experts and expertise, and competition among experts. It focuses on success in a changing world and adapting faster and better than the competition. Success means mastery of systems that produce results in an individual’s own domain, and eventually contribute to the success of the organization. Mistakes are lessons to improve. Independent cultures include: individual performance as an important source of success and status, an emphasis on taking calculated risks, open disagreement, and independent actions within functions or workgroups.

3. Interdependent-Collaborator cultures are those in which authority and control are shared based on strategic competence for the whole organization. Leadership is viewed as a collective activity that requires mutual inquiry and learning. The mindset tends toward collaborating in a changing world so that new orders and structures can emerge through collective work. Mistakes are embraced as opportunities for individual, team, and organizational learning, and both positive and negative feedback are valued as essential tools for collective success. Other characteristics include: the ability to work effectively across organizational boundaries, openness and candour, multi-faceted standards of success, and synergies occurring across the whole enterprise.

None of these three leadership cultures is better than the other two in an absolute sense. Each has been and can be successful when the context is right. But there is an order of progression among the three. Interdependent-collaborator cultures are the only level that is able to achieve genuine intentional, sustained, system-level ways of engaging the organization for strategic change. Most senior leaders say they want a collective leadership working as a unified force for change. Their competitive situation and environment calls for this, but few leaders would say that have an interdependent-collaborative culture right now.

3 Frameworks for Transformation
Three frameworks are provided to guide effective cultural change: Inside-Out, Readiness and Headroom.

1. Inside-Out. The source of transformation is your internal, intuitive, emotional, creative, spirit realm of deepest experience of being—subjective territory. Beliefs and meaning come from within (Inside-Out”). In contrast, “Outside-In” is what operations is made of--the objective, empirical stuff. Inside-Out is the source of deep, sustainable change.

2. Readiness. This is your preparedness as a leader to face the challenge of change. Your degree of readiness depends on assumptions and beliefs that either enable or cripple your personal chance at transformation. There are three forces of Readiness, which include your assumptions about the nature and use of time; the degrees of your need for control over self, things and others; and your deepest intentions—how serious you really are. Your personal readiness for change will determine your ability to guide others through change.

3. Headroom. “Headroom” is the space and time created to allow systemic development of the leadership culture. Expanding Headroom assists everyone to acquire the “bigger minds” that meeting challenges requires. Headroom is about having genuine and creative multi-lateral, multi-level connections with others in the course of transformation. It depends on internal and group dialogue, authentic public engagement, and collective learning.

Feasibility of Changing the Organization

Many organizations are investing huge amounts of money, time and people resources in changes that are destined to fail. If good feasibility work is done on the culture at the outset, a lot of money and heartburn can be saved. Based on their experience the authors reveal five factors that indicate a senior team’s readiness to work on cultural change.
1. The executive team is engaged as both enabler and participant.
2. Leadership development is part of the organization’s cultural history.
3. In struggling to implement change, senior leaders know that the missing piece is change in the leadership culture.
4. The senior team is willing to engage in emergent work.
5. The senior team recognizes the need for cross-boundary work.

As the senior team goes through this process of learning, members need to continually ask to what extent they are willing to fully participate in and demonstrate. Not every senior leader may want to come along.

The Culture Development Cycle (CDC)
The CDC is an organizational learning and development model or framework devised to represent the research findings with many clients based on grounded theory. The cycle includes six “dimensions” or “phases.”

• The Inside-Out, Role Shifting Experience Phase
• The Readiness for Risk and Vulnerability Phase
• The Headroom and Widening Engagement Phase
• The Innovation Phase
• The Structure, Systems and Business Processes Phase
• The Leadership Transformation Phase

The cycle, however, is not a series of six steps. The cycle doesn’t begin at one place; you begin wherever you are right now. But inevitably, you must engage in all six phases in order to transform leadership culture.

The Outcomes of Leading: Direction, Alignment, and Commitment
McGuire and Rhodes define leadership in terms of outcomes: what leadership brings about and what is done to set direction, achieve alignment and get commitment.

• Setting direction usually implies some measure of change, be it incremental or major. For a senior leader, setting direction means charting a course for the organization. Strategy addresses where you are going and how you are going to get there, so setting direction is part of strategy. All significant enterprise-wide change emanates from vision and strategy. In organization transformation efforts, your leadership strategy is as important as your business (or organizational) strategy.

• Alignment produces the right configuration of beliefs and talent, in the systems, structure and processes that enable your organizational to head in the direction you have set. When leadership practices are jointly shared in by the collective of leadership, such alignment becomes a powerful force for change. One vital alignment is that between your business strategy and your leadership strategy.

• Commitment is first getting the leadership culture and then the whole organization on board, believing and devoted to the direction your strategy charts.

Leadership culture then is the mutually reinforcing “web” of leadership beliefs and practices, as they are held, tested, and evolved over time in an organization or other community. Followers as well as leaders are participants in the leadership culture, though with different roles. Together, the group advances the leadership culture and the organization to a stage of development capable of facing and dealing with greater complexity.

Practical Application
This book highlights and energises the need to work with and move the senior executive team to realise and live the true vision and values that the culture is striving for. It has convinced me that if that doesn’t happen in my own organization or in the organizations we work with, than there is little or no chance for the organization to be successful in the long term.

The cases, questionnaires and exercises in Chapter 11, page 255 – 286 are very useful and relevant. I used several questionnaires with the senior executive team of an energy company and they were very useful.

The authors provide some practical steps to consider:
• Start with the senior leadership. If you are a CEO or senior manager, then you can no longer just delegate, defer or demand development from others. The changing role of senior leaders absolutely requires your commitment to your own Inside-out development. Don’t ask anyone to do what you are not willing to do. If you are not in senior management, then you have to 5 find a way to influence your CEO and senior team or else the change will be synthetic, superficial and incomplete.

• Executing strategy while developing leadership talent. By choosing the right level of leadership culture that your organization absolutely requires for its future, your leadership talent as a collective can advance to new levels of organizational capability that secures success. Don’t develop individual competencies one leader at a time as they come through the pipeline. Put more work into the senior management seminars, retreats, discussions about values and vision and develop the team into an independent collaborative culture.

• Achieve a vibrant leadership culture capable of executing your strategy through developing your leadership talent. Create a self-perpetuating leadership collective by developing your middle level managers into the new collaborative culture. Mentoring, coaching, executive and middle level leadership team workshops are helpful with this.

• Balance Outside-in changes in organizational systems, structure and processes with Inside-out development of leadership beliefs. Business strategy drives the challenge; leadership strategy meets and imbeds it. The organization is where demand meets supply. Get the human system in alignment with the operational systems. Achieve the balance in the equation that really makes everything work.

• Get a bigger mind. Serious change requires serious people. An expanding, learning-capable leadership mind-set can successfully face bigger challenges. Collective learning is the key to the elusive, popular vision of the learning organization. Collective, bigger leadership minds can address not only this year’s business issues and goals but also the shifting strategic challenges that face the leadership culture in the future. Organize leadership development and coaching that leads to bigger minds (and smaller egos!)

• Three foundations of personal readiness—time sense, control source, and intentionality—are the keys to advancing your personal readiness for transformation. When leaders demonstrate through their decisions and actions willingness to counter traditional assumptions, they create the conditions for others to learn and advance, and they expand collaboration, learning and development. These people will together pursue multiple right answers and advance collaborative relationships, thereby addressing more complex emergent issues and build readiness together for leadership.

• Headroom is the primary development process for your leadership culture. Engaging fully in the Headroom process includes time and space of inside-out discovery, action development for new leadership beliefs and practices, and advancement of leadership logics and culture. Headroom generates a new level of organizational capability and talent. During an Interdependent-Collaborative stage of culture, no competitor voice of that capability will challenge your organization’s ability to thrive.

• Create a change leadership team (CLT) that is the practice zone for emergence, generation and launch of the new leadership beliefs and practices that are the seeds of change that you need. Over time, it becomes the generator and the carrier of the next-order leadership culture.

• Focus on the core. Developing your leadership culture is developing your leadership talent to the next level of leadership logic, and advancing the practices of leaders to the next level of capability. When the next level of leadership culture is aligned with strategy, performance will be exceptional. By focusing on the few core capabilities the organization needs, you can move the whole and expanding leadership culture forward as a unified force for change.

• Use the development law of 3 X 3. There are three steps of development in each of the three stages of development. This is true for individuals and organizations. The three-step language goes something like this: (1) awareness, (2) try to apply new stuff, and (3) consolidate learning into the new logic frame. These steps take courage, belief and a new idea that is better and bigger. You have to ride inspiration and gut it out at the same time. You can’t skip steps. Development is earned. If it was easy everyone would be doing it. The CEO and leadership team have to get on the development bus!

• Use the culture development cycle to advance to the next level of leadership logic and culture. Each dimension is an ongoing, self-contained entity. Your organization can and will go through the phases many times as they advance in capability and sophistication.

What is meant by this is having an organisation where teams and individuals are open to more than one right answer, where collaboration is valued and where there is headroom for colleagues to experiment and grow. The authors state; "Individuals, teams and entire organisations can change their belief systems, current mindsets and learn more collaborative behaviours. Bigger minds can be created to solve bigger problems".

Limitations
While this book is very comprehensive and well set out and includes very useful tools, processes and questionnaires, there are a few limitations that should be pointed out before jumping in and using the ideas in this book.

1. After reading this book you could come away with the impression that if the CEO and senior management team are not involved, change is hopeless and should not even be tried. There is several research studies that have shown bottom up change and cross department change can be successful before senior management picks up the change. Local bush fires can set other places alight. The environmental movement seems to be driven more from the grass roots than from political leaders.

2. The book doesn’t refer to, acknowledge or incorporate some of the very useful change frameworks, and methods such as Kotter’s eight stages, force field analysis, etc. which are well known and used in the change management and transformational fields. A chapter showing how these theories and tools fit in with the ideas covered in this book would have been helpful.

3. Senior team members are not all at the same ‘thinking logic’. The book seems to suggest the whole organisation or senior management team is at the same level but experience shows that within the same time managers often range from enlightened leaders to conforming leaders.

4. The ideas of this book come from Torbert’s Action Inquiry which is a developmental approach similar to Integral theory. It leaves out the Integral four quadrant approach of recognizing systems, behaviours, culture and individual consciousness. While it refers to mindsets and culture, the Integral 4 quadrant framework could help organise and present these areas better.

5. McGuire and Rhodes only used 3 out of the 8 or so levels used in Integral theory and Action Inquiry. These levels are the most common in American organizations but do not give the full picture of the unfolding levels of development. While these three levels are simple and clear and will resonate with most managers, they do not represent the full range of development. For example, a tribal culture can exist before the conforming stage in many organisations. There is also a unified state in which is not interdependent but is a stage of oneness or non-duality. These may be rarer stages but they are valid and important stages of development.

6. At a very fundamental level, transforming a leadership culture means leaders transcending their egos and connecting their sense of self with a higher purpose. Eckhart Tolle in ‘The New Earth’ states that all true transformation must come from a transformation and transcendence of the ego. Becoming involved in genuine transformation requires a degree of humility that many senior leaders will find a step too far. Too many egos and too much empire-building sink the opportunity before it gets started. A little more of the Tolle perspective into this book could be useful.

These limitations are not sufficient however to detract from the tremendous value and contribution this book has made in uncovering the major factors important to transformation and powerful tools and methods to achieve it.

Some Key Considerations and Questions
�� What did you most like about this book?
�� What did you have most difficulty understanding or not agree with in this book?
�� Which tools/questionnaires would you use?
�� What level of development is your leadership in your organisation?
�� How will they respond to the idea that they have to go through a personal transformation, they have to reach a higher level (and to the idea that they are not already at the highest level!)?
�� Ken Wilber says that meditation is the one of the most universal tools that leads to development to higher stages. Do you agree and would you recommend that everyone in your organisation meditate, starting with the leaders?