Changing a Culture Is the Hardest Task of Leadership

Sooner or later, every organization will need to evolve its culture, not only to stay competitive but to keep progressing. That’s because the culture you have today is set up to deliver the results you are getting, which may no longer be strong enough for tomorrow’s economy and marketplace.

All too often, however, it takes a crisis to shake people from their routines and galvanize them to change. Changing a culture and making the change stick are perennial challenges for leaders.

During the 2008-09 U.S. financial crisis, The Hartford, a leading insurer that has been in business for more than 200 years, went through a near-death experience. Forced to confront a dire reality, employees came together to stabilize and strengthen the company. But once the immediate crisis passed, so did our sense of urgency for continuous and pervasive improvement. We needed to transform our culture to drive profitable growth and become a more focused, decisive, and competitive company.

Over the past three years, The Hartford has made significant progress on both. The company has undergone a financial turnaround as well as a cultural transformation, which continues. In the process, we have learned a great deal. Here are three of the principles we follow, which may be of value to those on a transformation journey.

Model the Behavior You Want to See

As Ralph Waldo Emerson put it, “What you do speaks so loudly that I cannot hear what you say.” The Harford had previously operated in silos: what mattered was how well an individual business or function performed. Employees made decisions based on what was good for their area rather than for the enterprise as a whole.

Our leadership team has reversed that orientation, emphasizing “One Hartford” behavior. We ask leaders to wear two hats—one for their business or function and another for the enterprise—and to avoid actions that would disadvantage the company. We also established enterprise objectives that the executive leadership team is jointly accountable for achieving, as well as leadership behaviors to model, such as delivering outcomes and operating as a team player. While most employees listen to what their leaders say, they pay close attention to what their leaders do.

Seek accountability for results—not activity

Ducking responsibility for misjudgments and missed goals, and blaming others or external factors for poor performance is human nature. This lack of accountability keeps companies from reaching their potential. It saps confidence and encourages a passive, excuse-based culture where no one feels in control of outcomes.

At The Hartford, we emphasize that accountability equals delivering results aligned to strategic goals, as opposed to good intentions and lots of activity. We are rapidly evolving to a culture where people are accountable for performance. Leaders submit quarterly scorecards that make clear to the board of directors and the management team how well their businesses and functions are performing across several dimensions.

We are also evaluating performance not only on what leaders achieve but also how they achieve. Hitting goals in a way that is inconsistent with The Hartford’s leadership behaviors is unacceptable. We want people to deliver strong results the right way—the “what” and the “how” matter equally.

For us, the strongest spur to accountability was sharpening the company’s operating focus, launching a new strategy for creating greater shareholder value, and developing a long-term vision. The strategy clarified for employees, customers, partners, and investors what businesses we are committed to and how we are driving profitable growth and shareholder value. The vision clarified the destination and set a new standard of excellence. Together, they strengthened employee engagement and created a shared commitment to execute.

Learn how to decide and deliver

One element of The Hartford’s culture that had been holding us back from achieving our goals was an inability to make good decisions quickly and routinely. It wasn’t a question of brainpower. Instead, we had a consensus culture where important decisions would be debated indefinitely. Too many meetings concluded without a decision being made. The polls never closed and back-channeling prevailed.

To instill decisiveness, we have been teaching the entire organization how to decide and execute the most important decisions, using a concept called RAPID®. This tool spells out the roles each person plays in every decision, and assigns a single point of accountability for decisions. That person commits the organization to action, and once a decision is made, everyone is expected to support it. We realize that learning how to decide and deliver is essential to achieving consistently good performance.

Occasionally I am asked by employees when all of this change will stop. My answer is never. I am gratified that more of my teammates have come to understand that great organizations respond to change by continually evolving, progressing, and learning, which is what The Hartford strives to do.

RAPID is a registered trademark of Bain & Company. To learn more about RAPID®, see “Who Has the D?How Clear Decision Roles Enhance Organizational Performance,” Harvard Business Review, January 2006 by Paul Rogers and Marcia Blenko.

Photo: Cartoonresource/ shutterstock

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