Corporate culture in the age of disruption
11/06/2018

Developing and nurturing a positive and productive corporate environment is a complex mission. True transformation must include a decisive plan for strengthening corporate culture, a plan that focuses on action and empowers everyone with the technology necessary to be an effective member of the team.

By Brian Fomby, Chief of Staff, Life Technology Solutions, Milliman.

Businesses in every sector face a potential tidal wave of disruption as digital technologies grow at a rapid pace, changing everything from internal operations to how organizations engage with customers.

Despite this rapid rate of technology innovation, other areas of business have been slower to keep up. One of the most glaring is corporate culture, particularly among those industries where change is traditionally slow and methodical, such as banking, finance, and, of course, insurance.

Insurance companies have felt pressure from all sides. There is the ever-present need to stay ahead of long-time competition, coupled now with keeping a watchful eye on digital-first startups that threaten to disrupt the status quo and become the new leaders of the digital economy. This level of competitive pressure necessitates disruption, and disruption requires significant change; change that can feel overwhelming or misguided to those who have successfully navigated the insurance landscape for so long.

It’s common for companies to feel an internal push and pull between the desire to innovate and adapt quickly versus a more reticent approach to changing what has always worked. For this reason, true transformation must include a decisive plan for strengthening corporate culture, a plan that focuses on action and empowers everyone with the technology necessary to be an effective member of the team.

Actions speak louder than words

One of the greatest examples of an effective culture change was the New United Motor Manufacturing Inc. (NUMMI) automobile manufacturing facility.* The facility, a joint venture between General Motors Co. (GM) and Toyota Motor Corp., had a less than auspicious start.

Originally owned by GM, the Fremont, California, plant was considered the worst among its manufacturing sites, with high absenteeism, a large number of workers going on strike or filing grievances, and some of the worst quality metrics in all of auto manufacturing. Toyota, for its part, was well known for its commitment to quality and teamwork. Yet it needed what GM had—insight and experience in the American market. From the outset, it seemed an unlikely venture to merge these two organizations with such vastly different cultures and expectations, and somehow find success.

The leadership of NUMMI took to heart the advice of corporate culture expert Edgar Schein, who said you don’t change company culture by trying to change company culture. Rather than focusing on changing the way employees thought, as was the norm, NUMMI instead focused on changing the way they behaved. They did this by redefining the assembly line—allowing workers to stop the line if a mistake was made rather than cover it up to avoid the inevitable fallout of a delayed assembly schedule. This simple step, though quite different from the status quo, empowered employees to be an active part of the company’s commitment to quality without the worry of failure or repercussion.

This profound change in behavior sparked a much faster and more positive culture alignment than any attempt to change the way employees thought of the company. This exercise proved team members are anxious to demonstrate their value and skills. Entrusting them to own their individual roles, as part of a broader team effort, will yield a stronger commitment to the vision and goals of the company.

The undeniable impact of technology

While technology can feel like a wedge between the old way of doing things and the new, in truth it can serve as a bridge toward building a stronger corporate culture, one that is ready, willing, and able to adapt and lead in an entirely new way.

Technology and resources have a profound impact on employee actions, and influencing action, as the NUMMI example demonstrates, can subsequently impact corporate culture. This is where technology becomes critically important, as companies consider how existing technology and processes are influencing current employee behavior, and how different technology might help nudge the culture in a desired direction.

For example, at insurance companies it’s common for chief financial officers (CFOs) to request more analysis from their actuaries, as well as more insight and new ideas. Technology is often the catalyst for such a request, as it offers a platform to better manage, organize, and visualize data and results quickly. When analysis is more seamless, easier to do, or even more fun, actuaries are more apt to do it. In this way, technology becomes an empowering agent in changing corporate culture by first driving new behavior, because culture follows action.

Technology cannot solve all problems and it will most likely not immediately change ingrained culture, but it should be considered an important element when attempting to transform from within.

Culture happens when you’re busy solving other problems

Without question, developing and nurturing a positive and productive corporate environment is a complex mission. There is no silver bullet answer, but redefining the way you approach change can have a profound impact. Rather than trying to change culture, allow the environment to change in a positive way and let that drive the desired effect.

Focusing on actions can yield a much faster and more positive response to change, rather than simply trying to motivate employees into thinking differently. Real-world experience helps employees to see that change in action, and without much effort a culture grows around the new shared experience. In addition, taking advantage of technology to help team members more effectively deliver results can drive a positive corporate culture.

As the NUMMI experiment demonstrated, a negative culture can be reversed with the right opportunity and investment. The best way to see results is to focus less on changing culture and more on empowering your team to succeed.

* GM pulled out of NUMMI and closed the plant doors in 2010. The closure was due to GM’s financial mismanagement in combination with a defective sales and marketing function. Toyota, however, continues to apply—with success—the NUMMI processes and culture to U.S. workers across four U.S. plants.

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