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The Five Ps is a model that depicts a system-wide view of an organization. You can use the Five Ps to understand your organizational culture and to use culture to manage change.
The Five Ps
Once you have defined the central three Ps of the Core Culture, you can bring change by aligning the Internal and External Practices and the Projections with the Core Culture attributes.
Alignment of the Five Ps
Merging two organizations is a complex process. And it’s the details that can bog you down. From the way you slice a lemon to the way you serve a drink, each practice must be evaluated to ensure that those with a Delta or a Northwest history will perform similarly. The details are significant because they are not only habit for the employee, but also practices that should reflect the culture.
Evaluating how employees do everything might be excruciating, but it might also be a valuable experience. It’s the details that communicate values and produce a consistent customer experience. Companies should take the time to consider how work is designed and the systems and processes for doing work because if these actions do not reflect and align with the principles and values of the organization’s core culture, then the customer experience might not convey the right message about the company.
So even if your company has not experienced a merger, stop and evaluate what you do in your work each day. Screen those actions against the values that are core to your organization and make changes so that every action consistently produces an experience that supports what your company says is important. It’s the little things that matter–yes, the details can make all the difference. Each Delta employee greeting, each pre-flight, in-flight and post-flight experience should consistently communicate a set of values that differentiate the company and express what’s important. Know the values of your culture and be sure all the little things you do at work reflect, reinforce and align with those prime principles.
Harvard Business School is revamping its M.B.A. program. According to a Wall Street Journal article, they are putting a greater emphasis on ethics and teamwork in response to a concern that the program has supported a money-focused culture that contributed to the financial crisis. The curriculum is changing with new classes, an internship program, and more time spent working in small groups.
But will these changes alter the attitudes of its students who are attracted to Harvard because they consider it a culture of entitlement? To create leaders of competence who want to lead solutions in health care, energy, and sustainability, the entire Harvard experience from selection to completion, must incorporate this new tone of change. Changing a culture is an intricate process that must begin at the core and be infused in all organizational practices. The curriculum and how students are structured is a start, but selecting applicants who are a fit is essential, too. A mindset is not easy to change. Defining the new culture must be a collective process for faculty, administration, and students. And aligning all practices with the new culture must be a shared goal.
Bob Dudley–the new chief executive of BP– stated he will move BP to having a greater safety culture.
In his September 2010 press release, he describes safety and risk management as BP’s most urgent priority. Dudley instituted a structural change–a new Safety & Operational Risk division headed by Mark Bly– to strengthen the safety focus.
In a press release dated Feb. 1, 2011, BP states:
BP’s immediate priority is to complete the process of embedding world-class safety and operational risk management at the heart of the group’s approach to all its activities and throughout all its operations.
Of course, if you are truly embedding safety into all aspects of your culture, the process never ends–it’s an ongoing focus where everyone continually thinks of new and better ways to improve the safety focus.
A Wall Street Journal article says that BP critics point to BP’s historical focus on deal-making and growth rather than on safety and operational excellence. The article sites major challenges that BP faces to changing the culture, including fixing aging infrastructure and changing staffing to reduce worker fatigue.
But the causes are more complex, according to a U.S. presidential commission report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.
The causes are described as systemic issues. Examples include:
Why is it that so many problems are due to a focus on profits over safety? Repeatedly, a focus on growth at the expense of safety or quality leads companies on a dangerous path that affects human lives. It’s not just BP that has taken this path. Look at the recent problems with Toyota. Companies like Toyota have been known in the past for having a quality and safety culture, yet they have moved in the wrong direction. When major quality or safety issues are exposed to the public, by either a disaster or a recall, the changes in the culture are often systemic–it’s not an isolated error but a change in values.
If a company like BP wants a safety culture, it must implement massive changes– throughout every aspect of the organization–that are guided by that safety focus. It must do more than just re-structuring or changing incentives and rewards.
The changes must start at the heart of the culture–at its core–where employees stop for a moment to reflect on the values that are important and together create a shared view. If safety is what’s valued over profits, then employees should not be over-worked, and faulty equipment and poor maintenance should not be allowed.
Leaders must be the #1 advocate for safety–in the case of BP, does Dudley talk about safety every day?
And all actions must be aligned with the safety philosophy. Employees should be applauded for reporting problems so they can be fixed and prevented throughout the company. Open communication–bottom/up as well as top/down– can be a great contributor to building a safety focus. Contractors must be held to the same high standards, and if they don’t meet the standards, they must be changed. Cuts in staffing and training can have significant impact on safety so those areas must be monitored so safety standards are not compromised. Employees should be hired not only for competency but also because they personally value safety. It should be the role of each employee to enhance the safety culture.
Changing a culture is a process. It takes time, but it must be more than just add-ons. It must be part of the company’s core–its DNA. Making safety #1 should be a decision that everyone participates in and owns. And if safety is the company’s prime principle, then it must come first before anything else–including profits and growth.
Another recall for Toyota. Now over 1.7 million vehicles world-wide including some Lexus models are being recalled for defective fuel devices or other faulty parts. What is happening to quality at Toyota?
It all goes back to knowing what’s core to your culture and never compromising on it. Every organization must define what values must be shared by everyone in the organization. These are the values that are never compromised. These are the values that each employee takes pride in and wants to live more effectively each and every day. You don’t want a lot of values–that important– so that there’s no excuses. These few values must be clearly understood. So, for example with Toyota, the focus should always be about quality. Quality should be the blood that runs through the veins of all who work for the company. Nothing moves quality second to anything.
So why do companies mess this up? It’s often a problem of not integrating the value throughout every aspect of the company. It’s about aligning all practices with the core principle. In the case of Toyota, as reported in the Wall Street Journal,
“Toyota has been using more common parts in its vehicles” in order to cut costs, said Koji Endo, an auto analyst at Tokyo-based independent auto industry boutique Advanced Research Japan.
Toyota should know better. The suppliers they use and the materials they buy must meet their high standards for quality. Anything less should not be qualified to be in a Toyota product–from the car to the key chain.
The article says Toyota has been taking actions to prevent recalls, such better reporting of safety issues, assigning engineers to focus on quality issues, and spot-checking vehicles for potential problems before launch. But maybe that’s just not comprehensive enough.
Every aspect of the company’s internal practices from how the organization is structured, how work is designed, systems for doing one’s work, hiring practices, orientation, training, performance management, internal communications and technology must reinforce the focus on quality.
And every aspect of the company’s external practices including its suppliers, vendors and partners must be screened to set quality as the number one requirement.
Also, the image the company projects should always be about quality. When I look at the Toyota website, I don’t see a dominant focus on quality. There seems to be a greater focus on selling more cars. Maybe the focus on growth has become more important.
If quality is the core value that captures the core essence of what Toyota is all about, then they must make it core to all they do. Costs or any other value cannot be a higher value than quality.
Successful organizations understand that they must define their core culture–the principles that are central to who they are that are never compromised. And employees must practice those few principles in everything that they do. That consistency is what makes organizations great.
On CNBC, there was a brief discussion of the Goldman Sachs culture and the possible changes it may be making to the culture. For example, the Goldman culture is known for putting client first, team second, and employee third. Thus, a partner’s business card is aligned with that core belief–with the Goldman Sachs name being most prominent. This is an example of aligning Projections (your image) with the core culture (the values at the heart of your organization).
Goldman historically has not been known for having a revolving door. If you left the firm, you did not return (although Edward Forst was an exception). This allowed those below to have opportunities to move up–a motivational tool to retain workers. If employees were allowed to leave and later return, then opportunities for promotion would be reduced. In a high pressure job with long work hours, this was a tool to keep valued employees. But now Noto a former Goldman partner and media stock analyst who left to serve as the NFL CFO is now returning in October to co-head the global media group. Although his departure from Goldman was not for a competitor, his re-hiring is not typical for this company. Will we start seeing more former Goldman employees coming back to the Goldman home? Will the change to a “bank” status continue to impact the organizational practices and with it the culture?
Companies must be aware of the impact small changes can have on their core culture. Although some changes may seem insignificant, if they are in conflict with the core culture values, these changes will imply a different set of principles that are more important. And if practices continue to change without a discussion of the core culture and its changes, then employees will be confused and with that confusion will potentially be less motivated. Practices–even a business card or an employment practice–must be aligned with the principles and values of the culture. And if the culture needs to change, that must be explicitly addressed and not left for employees to guess.
Organizational culture is an important thing. It’s the standards guiding all behavior in the organization–leaders and employees alike. So when you have a culture of uncompromising integrity, respect, and trust and your top leader–the CEO–demonstrates behaviors that are in conflict with those core values, what do you do? The answer is simple if your culture matters. The CEO must leave. And that’s what happened at H-P.
If you read the H-P Way, a key tenet of the culture is: “We conduct our business with uncompromising integrity.” It is explained this way:
We expect HP people to be open and honest in their dealings to earn the trust and loyalty of others. People at every level are expected to adhere to the highest standards of business ethics and must understand that anything less is unacceptable. As a practical matter, ethical conduct cannot be assured by written HP policies and codes; it must be an integral part of the organization, a deeply ingrained tradition that is passed from one generation of employees to another.
In the Five Ps model, the P of “Projections” refers to the images that an organization projects to the public and to the employees, as well. Those images are often influenced by marketing, PR and advertising, but they are also influenced by things like the company name, its logo and symbols, and even the image of the headquarters, offices and stores, and the company’s leader. These images must be aligned with the culture of the organization. Lack of alignment produces serious problems for the company–the public and the employees no longer believe those espoused values matter. How can the leader of a set of values not practice the values that he says are most important?
Leadership matters when it comes to organizational strategy and leadership matters when it comes to organizational culture. When the leader lives the values and talks about them each day, then everyone inside and outside the organization believes they are real. And that’s what it takes for a strong culture–a vital asset for any organization.
And when that leader no longer represents those core values, for the sake of the health of the organization, the leader must leave. Of course, selecting the next leader becomes a challenge, especially when the organization has had a history of selection issues as the WSJ labels as the H-P Curse.
An insider is usually the better choice if you seek to sustain the distinctive and enduring Philosophy of the organization–a vital part of the Core Culture. Insiders usually get it because they’ve been living it–assuming the culture is aligned and practiced. Outsiders need to be selected based on whether they have demonstrated leadership practices that are consistent with the company’s culture. The wrong selection can damage a culture.
Culture matters and leadership matters. They go hand-in-hand.
Are you thinking about doing more cost-cutting? If so, stop for a moment if you are considering an across-the-board reduction in spending. Instead, manage smarter by first considering two key questions:
The answers to these two questions will be the guide in how you move forward. The challenge is to allocate resources to enhance the capabilities that make you best-in-class and not get distracted by spending time, energy, and money in developing capabilities that really don’t contribute to your distinction. Once you have defined what the organization can do “the best,” be sure everyone in the organization has that shared view. Then, each day, employees will focus on enhancing the organization’s critical capabilities.
Read an interesting article, “The Coherence Premium” in the Harvard Business Review, June 2010 issue. Paul Leinwand and Cesare Mainardi provide an excellent discussion of these principles. As the authors state, “Sustainable, superior returns accrue to companies that focus on what they do best.”
Success can be achieved by aligning your core culture–guiding the “why” and the “how” of the organization–with your distinctive internal capabilities that make you best-in-class, and the right market position.
Sheila L. Margolis, PhD
President, Workplace Culture Institute
