```Lesson 14
Cultural Change
1
Purpose
• To provide a framework for understanding and
changing a culture
• To understand systems thinking, which
provides this framework
2
The Widget Department
Same Job
Same Place
New Project
New Project
Team
Project Fails
Reject
Project and
Team
Involvement
Fear of
Failure/Loss
of Position
Generalize
Project and
Team as a
Waste of
Resources
Focus on
Team Flaws
and Project
Challenges
2
How would you change the Widget
Department?
4
Systems Thinking
5
Systems Thinking
• All things are interconnected
• They are interconnected by systems
6
What is a system?
• A system is a collection of parts which interact
with each other to function as a whole.
7
Building Blocks
• All systems are comprised of two building blocks:
• Reinforcing Loops
– Change and growth
• Balancing Loops
– Stability, resistance, limits
8
Reinforcing Loops
Small Changes eventually result in exponential
growth.
9
A Penny A Day
On the first day of the month, I give you a penny.
On the second day, I give you two pennies.
On the third day, four pennies.
Day four, eight pennies.
Day five, sixteen pennies.
How many pennies do you have on day 15?
How many on day 30?
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Day
Pennies
Day
Pennies
1
1
16
32,768
2
2
17
65,536
3
4
18
131,072
4
8
19
262,144
5
12
20
524,288
6
32
21
1,048,576
7
64
22
2,097,152
8
128
23
4,194,304
9
256
24
8,388,608
10
512
25
16,777,216
11
1,024
26
33,554,432
12
2,048
27
67,108,864
13
4,096
28
134,217,728
14
8,192
29
268,435,456
15
16,384
30
536,870,912
11
Lilies in a Pond
There are 1,000,000 lilies in the pond. One-half of
the lilies die each day.
How many lilies are there on day 10?
How long until there are none remaining?
12
Lilies Remaining Each Day
Day
1
1,000,000
2
500,000
3
250,000
4
125,000
5
62,500
6
31,250
7
15,625
8
7,813
9
3,906
10
1,953
11
977
12
488
13
244
14
122
15
61
16
31
17
15
18
8
19
4
20
2
21
1
13
Reinforcing Loop
Condition
Growing
Action or
Contracting
Action
The condition will change – either growing or contracting
14
Balancing Loops
Attempts to change the current condition are
countered, returning you back to the beginning.
The larger the attempted change, the more severe
the counter measure.
15
Driving a Car
Speed
Pressure on
Gas Pedal
16
Target:
55 miles
per hour
Balancing Loop
Condition
Target:
55 miles
per hour
Corrects
Corrective
Action
17
Interconnected Systems
• Very often individual systems interconnect to
form larger more complex systems.
18
Is a Culture a System?
• A culture is an interconnected balancing
system.
• It is characterized by many balancing loops.
• It is stable even though the environment is
changing.
19
Cultural Change
• If cultures are stable –
how do we change them?
20
Cultural Change
Current Reality
Vision
Existing
Culture
New Culture
Tension
Action Steps
– Create reinforcing loops toward desired culture.
– Eliminate balancing loops that maintain current culture.
21
Widget Department
Possible Action Steps
• Actions with reinforcing loops:
– Explain benefits of job rotation
– Offer a financial incentive
• Actions which eliminate balancing loops:
– Let those with the greatest concern be the last to convert
– Offer job protection for an extended period
– Provide specialized training to better help those with the
greatest concerns.
22
23
• Assess the existing culture.
• If inadequate, create a shared vision of the desired culture.
• Understand the current reality of the existing culture.
• Take action:
– visualize a new culture
– understand the current status
– take action by adding reinforcing loops,
– or eliminating balancing loops.
• Once the desired culture is achieved, be vigilant in maintaining its status.
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Summary
• Systems thinking provides a framework for understanding
cultures
• Cultures are balancing systems
• This is good if we like what we have
• If we don’t we can –
–
–
–
–
Visualize a new culture
Understand the current status
Take action by adding reinforcing loops,
Or eliminating balancing loops
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This lesson is a modified excerpt from the book, Compass – Creating Exceptional Organizations: A Leader’s
Guide, written by William F. Brandt, Jr., cofounder and former CEO of American Woodmark Corporation –
the third largest producer of kitchen cabinets in America.
William F. Brandt, Jr.
This lesson may be copied, presented and/or distributed to up to five people. Distribution beyond five is
subject to a user fee as described in the website: CompassCEO.com
The book and related materials are also available from the website: CompassCEO.com
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