Today's post comes to us from board member John Frehse. In it he asks, do you need to fire everyone in order to achieve cultural transformation?
Competition is fierce, digital transformation is happening (whether we like it or not), and many organizations will be out of business if they donâ€™t change at an accelerated pace. This means people need to change, and we all know people often struggle with change. So, what should be done?
Is firing everyone and starting over a good option?
It may be tempting to consider drastic action when needing to change culture. If we fired everyone, would we miss the coworker who never has a positive thing to say, the one who never shows up on time, or the one who doesnâ€™t pull their own weight? We all know these people and they drive us crazy. However, does it ever make sense to do the unthinkable and remove everyone and start again?
The short answer is â€œNo! Do not fire everyone.â€
Removing everyone and allowing anyone interested to reapply for their job has been done before but it is incredibly risky, yielding heavily mixed results. Even those employees who don't fit in well with the culture of your organization or lack the agility to change have experience and knowledge that bring some value.
On the opposite end of the spectrum, high performers may be offended by the notion that they have to reapply and could search for other employment â€“ they are highly in demand, after all.
Companies requiring a major transformation know the road can be long and difficult. Employees are often set in their ways, comfortable with the status quo, and unwilling to entertain new ideas. There are many different ways to approach organizational change and all have their own challenges. The reality is that companies can be drastic without being destructive and irresponsible.
Flatten the Organization/Keep and Empower the People!
It is often the lack of decision rights that drives complacency, frustration, and disengagement. Layers of management slow down much needed change and are often too far away from the area impacted to even understand the value.
The Ankura Diialog survey, a cultural diagnostic often used to improve hiring, retention and labor performance, asks employees if â€œtoo many decisions are made higher up than they need to be.â€ When we see strong numbers for this question (4 or higher), we know there are significant issues surrounding culture and performance. The benchmark is 2.94 with a standard deviation indicating a wide range of responses, and we also see diverse responses from company to company. Gerry McDonough, the architect of this cultural diagnostic, says, â€œwithout decision rights, employees are often relegated to being button pushers, paper pushers, and culture killers.â€ By putting the power back in their hands, employees gain ownership and drive results.
This decentralization of power requires trust â€“ something management teams are often not great at doing (for valuable insight into the magic that occurs when you trust your people, read Kronos CEO Aron Ain's recent book, WorkInspired which includes an entire chapter on trust.). We hire people because we trust them and then we make them â€œearn the trust backâ€ after they join the team. This is illogical and stymies engagement, retention, and performance.
As it turns out, we do not need to start from scratch. We need to properly engage the people we already have. By getting it wrong, we are wasting our most valuable resources â€“ our people.
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