Why Building a Culture of Excellence is More Difficult than You Think

Let’s start with defining culture.  Edgar Schein, a guru of culture, defines culture as “A pattern of basic assumptions learned by a group as it solved its problems of external adaptation and internal integration (…) A product of joint learning.”  However, what we see on the surface, and what is often defined as culture, are visible artifacts and behaviors such as mission statements, office layout, what people wear, what holidays they celebrate and the speeches of the CEO. 

As seen below, Schein’s model of culture looks below the surface of visible artifacts to two additional levels. If we ask people what they value and what rules are important to follow, we get a bit deeper into the culture.  We are looking for “patterns,” which mean shared beliefs about what is important and what behaviors are proper versus improper.

Even deeper down are assumptions that are so basic that we take them for granted and cannot imagine why anyone would think any other way.  For example, America is the land of individual freedom, and it is difficult for Americans to understand a culture where individuals will sacrifice their personal rights and goals for the good of the collectivity. 

When Japanese management first became popular in the 1980s, Americans were hesitant to embrace what they viewed to be a robotic culture, where employees dressed alike, following every rule and standard procedure. These perceptions revealed much about American culture.  Beyond the lack of cultural sensitivity, it revealed a desperate need for individual freedom, often limited to the artifact level.   “We won’t dress alike because that means we might be alike.”

Recently, a colleague who was a senior vice president for Herman Miller and led the company’s transformation to lean, told me a great story.  He said he got fantastic support from the CEO, who lived in Japan and studied martial arts in his youth.  He was in a mixed class of Americans and Japanese.  He noticed that when the black belt instructor demonstrated a move, the Japanese would do it exactly as shown over and over until the instructor said it was enough.  The Americans would try it a few times, decide they had gotten it, and stop.  He understood that the lean journey would require a long-term process of teaching Herman Miller employees the value of a disciplined approach to improvement, and a commitment to cultural change. 

Twelve years later, Herman Miller is still diligently learning and practicing the Herman Miller Production System with outstanding business results.  The culture was already very people-focused, but with lean came a new focus on developing people to continuously improve processes for productivity, quality, timeliness and safety.  People were engaged in a way that they had never been before lean.  As a result, Herman Miller survived several major downturns in sales, including the Great Recession, without laying off people as a result of improvements, and without shifting manufacturing to low cost countries.

Unfortunately, not all lean transformation stories are so happy.  The tools of lean are used to “remove waste,” but the underlying culture remains the same.  Performance improvement experts, sometimes called lean “six sigma black belts,” complete projects to achieve targets, usually for cost reduction.  People working in the processes are expected to follow the new standard operating procedures determined by the black belts.  This smells a lot like Taylorism, the industrial engineering movement of the 20^th century that made people more efficient by expecting the experts to think and the workers to obey. 

When we analyze the culture of most organizations that adopt a lean six sigma program, it looks like the figure seen below.  On the surface we see all the tools of lean, but below the surface the values and basic assumptions reflect a top-down efficiency approach.  The main purpose of the organization is to please stockholders by beating earnings estimates quarter by quarter.  The focus of improvement is cost reduction done to the people, not by the people who do the work.  The result is changes to the work that are only sustainable as long as those in authority enforce the new way with rewards and punishments.

The origins of lean in Toyota reflected a very different culture, which is shown in the diagram below.  Toyota’s stated purpose has always been to benefit society.  The company almost went bankrupt when they began building automobiles in the wake of the Great Depression and World War II.  Thus, Toyota’s culture became one of self-reliance.  They needed to invest in the company and its people for the long term so that they could adapt to any challenges the environment threw at them.  Their basic assumptions were that engaged people that were trained to constantly improve based on an objective understanding of the challenges and the root causes of their weaknesses would lead to adaptability.  For long-term success they needed to continually make products customers value, reward all team members with stable employment, and take care of the local economies where they did business.  This drives intensive investment in developing people, a key factor missing from many organizational cultures.

The easy answer to this dilemma for companies that wish to pursue excellence, is to change their culture from the short-term pursuit of efficiency done by experts, to a long-term view of investing in a culture of engaged team members improving their own processes.  Unfortunately, Schein warns us that this type of radical change in culture will be anything but easy, saying it will be a “painful process and elicit strong resistance.” In fact he writes, “It may not even be possible without replacing large numbers of people.”  

Cultures are rooted in far deeper assumptions then we may realize.  Skimming the surface of changes in artifacts will not change the deeper culture holding us back from realizing our objectives, but changing the culture may be far more gut-wrenching than we are willing to accept.  The starting point is a deep commitment to change at the very top of the organization.  As seen with Herman Miller’s CEO, there needs to be a deep awareness of the actual culture and an unwavering pursuit of the new desired culture.  Cultural change is not easy, but it is possible.

Dr. Jeffrey Liker is professor of industrial and operations engineering at the University of Michigan and author of The Toyota Way.  He leads Liker Lean Advisors, LLC and his latest book (with Gary Convis) is The Toyota Way to Lean Leadership.